Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	1.29	1.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.6%	15.0%

Tax rate	5.0%	9.0%
Debt/Equity ratio	4.9	4.9
Cost of debt	5.0%	5.0%

After-tax WACC	5.7%	6.3%


Selected WACC	6.0%

600881.SS WACC - Detailed calculations of Beta

		Debt/Equity		Unlevered
Peers	Company Name	ratio	Beta	beta

600881.SS	Jilin Yatai Group Co Ltd	4.9	2.76	0.5
000012.SZ	CSG Holding Co Ltd	1.14	0.87	0.42
000789.SZ	Jiangxi Wannianqing Cement Co Ltd	0.6	1.28	0.82
000877.SZ	Xinjiang Tianshan Cement Co Ltd	4.27	1.35	0.27
002302.SZ	China West Construction Group Co Ltd	0.59	1.32	0.85
1252.HK	China Tianrui Group Cement Co Ltd	15.74	0.03	0
1847.HK	YCIH Green High Performance Concrete Co Ltd	14.66	0.08	0.01
2233.HK	West China Cement Ltd	1.17	0.66	0.32
691.HK	China Shanshui Cement Group Ltd	2.79	0.68	0.19
695.HK	Dongwu Cement International Ltd	0.23	0.29	0.24
743.HK	Asia Cement (China) Holdings Corp	0.42	0.52	0.37

	Low	High

Unlevered beta	0.27	0.37
Relevered beta	1.43	1.88
Adjusted relevered beta	1.29	1.59

600881.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 600881.SS:

cost_of_equity (12.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.29) + 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.