600353.SS WACC - Weighted Average Cost of Capital
The WACC of Chengdu Xuguang Electronics Co Ltd (600353.SS) is 9.8%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.7% | 10.05% |
| Tax rate | 8.7% - 11.0% | 9.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 11.4% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.94 | 1.12 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.7% |
| Tax rate | 8.7% | 11.0% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 11.4% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600353.SS | Chengdu Xuguang Electronics Co Ltd | 0.04 | 1.17 | 1.13 |
| 000020.SZ | Shenzhen Zhongheng Huafa Co Ltd | 0.04 | 0.89 | 0.87 |
| 002057.SZ | Sinosteel New Materials Co Ltd | 0.16 | 0.98 | 0.85 |
| 002655.SZ | Gettop Acoustic Co Ltd | 0.1 | 1.26 | 1.16 |
| 002885.SZ | Shenzhen JingQuanHua Electronics Co Ltd | 0.18 | 0.9 | 0.77 |
| 002902.SZ | Dongguan Mentech Optical & Magnetic Co Ltd | 0.2 | 1.41 | 1.19 |
| 300283.SZ | Wenzhou Hongfeng Electrical Alloy Co Ltd | 0.56 | 1.33 | 0.88 |
| 300691.SZ | Union Optech Co Ltd | 0.16 | 1.54 | 1.35 |
| 603829.SS | Jiangsu Luokai Mechanical & Electrical Co Ltd | 0.3 | 0.78 | 0.61 |
| 605218.SS | Ways Electron Co Ltd | 0.06 | 1.49 | 1.41 |
| Low | High | |
| Unlevered beta | 0.87 | 1.14 |
| Relevered beta | 0.91 | 1.18 |
| Adjusted relevered beta | 0.94 | 1.12 |
600353.SS's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for 600353.SS:
cost_of_equity (10.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.