The WACC of Sailun Group Co Ltd (601058.SS) is 7.9%.
Range | Selected | |
Cost of equity | 7.7% - 10.3% | 9% |
Tax rate | 8.0% - 9.8% | 8.9% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.9% - 8.9% | 7.9% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.82 | 0.93 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.7% | 10.3% |
Tax rate | 8.0% | 9.8% |
Debt/Equity ratio | 0.32 | 0.32 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.9% | 8.9% |
Selected WACC | 7.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
601058.SS | Sailun Group Co Ltd | 0.32 | 0.6 | 0.47 |
000589.SZ | Gui Zhou Tyre Co Ltd | 0.9 | 1.24 | 0.68 |
000599.SZ | Qingdao Doublestar Co Ltd | 1.36 | 0.98 | 0.44 |
000887.SZ | Anhui Zhongding Sealing Parts Co Ltd | 0.28 | 1.19 | 0.95 |
002984.SZ | Qingdao Sentury Tire Co Ltd | 0.11 | 0.79 | 0.72 |
1899.HK | Xingda International Holdings Ltd | 3.53 | 0.17 | 0.04 |
600182.SS | GITI Tire Corp | 0.22 | 0.67 | 0.56 |
600469.SS | Aeolus Tyre Co Ltd | 0.64 | 0.89 | 0.57 |
601163.SS | Triangle Tyre Co Ltd | 0.16 | 0.92 | 0.8 |
601500.SS | Jiangsu General Science Technology Co Ltd | 0.77 | 1.29 | 0.76 |
Low | High | |
Unlevered beta | 0.56 | 0.69 |
Relevered beta | 0.73 | 0.9 |
Adjusted relevered beta | 0.82 | 0.93 |
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 601058.SS:
cost_of_equity (9.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.