The WACC of China-Singapore Suzhou Industrial Park Development Group Co Ltd (601512.SS) is 6.7%.
Range | Selected | |
Cost of equity | 8.3% - 10.7% | 9.5% |
Tax rate | 22.9% - 23.6% | 23.25% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 6.1% - 7.3% | 6.7% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.91 | 0.98 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.3% | 10.7% |
Tax rate | 22.9% | 23.6% |
Debt/Equity ratio | 0.97 | 0.97 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 6.1% | 7.3% |
Selected WACC | 6.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
601512.SS | China-Singapore Suzhou Industrial Park Development Group Co Ltd | 0.97 | 0.91 | 0.52 |
000718.SZ | Suning Universal Co Ltd | 0.28 | 1.58 | 1.3 |
000797.SZ | China Wuyi Co Ltd | 2.31 | 1.28 | 0.46 |
000918.SZ | China Calxon Group Co Ltd | 7.39 | 1.54 | 0.23 |
2923.TW | Sino Horizon Holdings Ltd | 1.28 | 1.18 | 0.6 |
59.HK | Skyfame Realty (Holdings) Ltd | 166.68 | 1.72 | 0.01 |
600064.SS | Nanjing Gaoke Co Ltd | 0.71 | 1.26 | 0.81 |
600162.SS | Shenzhen Heungkong Holding Co Ltd | 0.85 | 1.43 | 0.86 |
600185.SS | Gree Real Estate Co Ltd | 1.19 | 1.01 | 0.53 |
600639.SS | Shanghai Jinqiao Export Processing Zone Development Co Ltd | 1.77 | 0.92 | 0.39 |
Low | High | |
Unlevered beta | 0.5 | 0.56 |
Relevered beta | 0.87 | 0.97 |
Adjusted relevered beta | 0.91 | 0.98 |
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 601512.SS:
cost_of_equity (9.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.91) + 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.