601598.SS WACC - Weighted Average Cost of Capital
The WACC of Sinotrans Ltd (601598.SS) is 7.6%.
| Range | Selected | |
| Cost of equity | 7.6% - 9.9% | 8.75% |
| Tax rate | 17.8% - 18.6% | 18.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.4% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.81 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 9.9% |
| Tax rate | 17.8% | 18.6% |
| Debt/Equity ratio | 0.33 | 0.33 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.4% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 601598.SS | Sinotrans Ltd | 0.33 | 0.92 | 0.72 |
| 002120.SZ | YUNDA Holding Co Ltd | 0.6 | 0.81 | 0.54 |
| 002468.SZ | STO Express Co Ltd | 0.48 | 0.55 | 0.39 |
| 300240.SZ | Jiangsu Feiliks International Logistics Inc | 0.42 | 0.77 | 0.57 |
| 300873.SZ | Hichain Logistics Co Ltd | 0.13 | 1.28 | 1.15 |
| 3399.HK | Guangdong Yueyun Transportation Co Ltd | 3.13 | 0.47 | 0.13 |
| 600233.SS | YTO Express Group Co Ltd | 0.14 | 0.65 | 0.58 |
| 603056.SS | DEPPON LOGISTICS Co Ltd | 0.16 | 0.98 | 0.86 |
| 603128.SS | CTS International Logistics Corp Ltd | 0.19 | 1.07 | 0.93 |
| 603535.SS | Guangzhou Jiacheng International Logistics Co Ltd | 0.29 | 0.65 | 0.53 |
| Low | High | |
| Unlevered beta | 0.56 | 0.64 |
| Relevered beta | 0.72 | 0.81 |
| Adjusted relevered beta | 0.81 | 0.87 |
601598.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 601598.SS:
cost_of_equity (8.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.81) + 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.