600975.SS WACC - Weighted Average Cost of Capital
The WACC of Hunan New Wellful Co Ltd (600975.SS) is 8.6%.
| Range | Selected | |
| Cost of equity | 11.2% - 14.0% | 12.6% |
| Tax rate | 0.9% - 2.6% | 1.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.0% - 9.3% | 8.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.39 | 1.44 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.2% | 14.0% |
| Tax rate | 0.9% | 2.6% |
| Debt/Equity ratio | 1.05 | 1.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.0% | 9.3% |
| Selected WACC | 8.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600975.SS | Hunan New Wellful Co Ltd | 1.05 | 1.27 | 0.62 |
| 000735.SZ | Luoniushan Co Ltd | 0.25 | 1.26 | 1.01 |
| 002069.SZ | Zoneco Group Co Ltd | 0.7 | 1.29 | 0.76 |
| 002234.SZ | Shandong Minhe Animal Husbandry Co Ltd | 0.54 | 1.12 | 0.72 |
| 002746.SZ | Shandong Xiantan Co Ltd | 0.37 | 1.07 | 0.78 |
| 002772.SZ | Tianshui Zhongxing Bio-technology Co Ltd | 0.72 | 0.83 | 0.49 |
| 300094.SZ | Zhanjiang Guolian Aquatic Products Co Ltd | 0.41 | 1.83 | 1.3 |
| 600097.SS | Shanghai Kaichuang Marine International Co Ltd | 0.21 | 0.96 | 0.79 |
| 600257.SS | Dahu Aquaculture Co Ltd | 0.32 | 1.11 | 0.84 |
| 603336.SS | Great-Sun Foods Co Ltd | 0.23 | 1.07 | 0.87 |
| Low | High | |
| Unlevered beta | 0.77 | 0.81 |
| Relevered beta | 1.58 | 1.66 |
| Adjusted relevered beta | 1.39 | 1.44 |
600975.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 600975.SS:
cost_of_equity (12.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.39) + 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.