The WACC of Cinda Real Estate Co Ltd (600657.SS) is 3.8%.
Range | Selected | |
Cost of equity | 5.0% - 8.2% | 6.6% |
Tax rate | 37.9% - 42.6% | 40.25% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 3.5% - 4.0% | 3.8% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.38 | 0.63 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.0% | 8.2% |
Tax rate | 37.9% | 42.6% |
Debt/Equity ratio | 3.6 | 3.6 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 3.5% | 4.0% |
Selected WACC | 3.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600657.SS | Cinda Real Estate Co Ltd | 3.6 | 1.75 | 0.57 |
000732.SZ | Tahoe Group Co Ltd | 106.9 | 1.75 | 0.03 |
1107.HK | Modern Land (China) Co Ltd | 413.67 | 0.21 | 0 |
1862.HK | Jingrui Holdings Ltd | 1135.37 | 0.27 | 0 |
1902.HK | Yincheng International Holding Co Ltd | 178.95 | 0.42 | 0 |
2019.HK | Dexin China Holdings Company Ltd | 114.7 | 1.52 | 0.02 |
600266.SS | Beijing Urban Construction Investment & Development Co Ltd | 4.96 | 1.31 | 0.34 |
600565.SS | DIMA HOLDINGS Co Ltd | 10.55 | 1.51 | 0.21 |
600823.SS | Shanghai Shimao Co Ltd | 17.49 | 1.13 | 0.1 |
601588.SS | Beijing North Star Co Ltd | 4.2 | 1.17 | 0.34 |
Low | High | |
Unlevered beta | 0.03 | 0.15 |
Relevered beta | 0.07 | 0.45 |
Adjusted relevered beta | 0.38 | 0.63 |
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 600657.SS:
cost_of_equity (6.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.38) + 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.