600363.SS WACC - Weighted Average Cost of Capital
The WACC of Jiangxi Lianchuang Opto Electronic Science &Technology Co Ltd (600363.SS) is 8.9%.
| Range | Selected | |
| Cost of equity | 7.9% - 10.6% | 9.25% |
| Tax rate | 1.6% - 1.8% | 1.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 10.2% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.86 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 10.6% |
| Tax rate | 1.6% | 1.8% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 10.2% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600363.SS | Jiangxi Lianchuang Opto Electronic Science &Technology Co Ltd | 0.08 | 1.49 | 1.39 |
| 002218.SZ | Shenzhen Topraysolar Co Ltd | 0.47 | 1.04 | 0.71 |
| 002610.SZ | Jiangsu Akcome Science & Technology Co Ltd | 3.38 | 1.75 | 0.41 |
| 1385.HK | Shanghai Fudan Microelectronics Group Co Ltd | 0 | 0.74 | 0.74 |
| 300219.SZ | Hongli Zhihui Group Co Ltd | 0.32 | 1.56 | 1.19 |
| 300301.SZ | Shenzhen Changfang Group Co Ltd | 0.22 | 0.98 | 0.8 |
| 300323.SZ | HC SemiTek Corp | 0.34 | 1.36 | 1.02 |
| 300393.SZ | Jolywood Suzhou Sunwatt Co Ltd | 1.25 | 1.46 | 0.65 |
| 600537.SS | EGing Photovoltaic Technology Co Ltd | 0.27 | 1.44 | 1.14 |
| 603421.SS | Qingdao Topscomm Communication Inc | 0.18 | 0.82 | 0.7 |
| Low | High | |
| Unlevered beta | 0.73 | 0.89 |
| Relevered beta | 0.79 | 0.96 |
| Adjusted relevered beta | 0.86 | 0.97 |
600363.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 600363.SS:
cost_of_equity (9.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.86) + 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.