603042.SS WACC - Weighted Average Cost of Capital
The WACC of Nanjing Huamai Technology Co Ltd (603042.SS) is 6.8%.
| Range | Selected | |
| Cost of equity | 6.0% - 8.1% | 7.05% |
| Tax rate | 9.8% - 26.5% | 18.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 7.7% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.54 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.0% | 8.1% |
| Tax rate | 9.8% | 26.5% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 7.7% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603042.SS | Nanjing Huamai Technology Co Ltd | 0.08 | 1.53 | 1.43 |
| 000836.SZ | Tianjin Futong Information Science & Technology Co Ltd | 2.17 | 1.74 | 0.61 |
| 002052.SZ | Shenzhen Coship Electronics Co Ltd | 0 | 0.42 | 0.42 |
| 002417.SZ | SUNA Co Ltd | 0.06 | -1.07 | -1.01 |
| 1085.HK | Hengxin Technology Ltd | 1.92 | 0.48 | 0.18 |
| 1087.HK | InvesTech Holdings Ltd | 3.12 | 0.05 | 0.01 |
| 1202.HK | Chengdu PUTIAN Telecommunications Cable Co Ltd | 0.02 | 0.35 | 0.34 |
| 2000.HK | SIM Technology Group Ltd | 0.05 | 0.4 | 0.39 |
| 200468.SZ | Nanjing Putian Telecommunications Co Ltd | 0.35 | 0.28 | 0.21 |
| 300514.SZ | Shenzhen Friendcom Technology Development Co Ltd | 0.06 | 1.48 | 1.4 |
| Low | High | |
| Unlevered beta | 0.29 | 0.4 |
| Relevered beta | 0.31 | 0.43 |
| Adjusted relevered beta | 0.54 | 0.62 |
603042.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 603042.SS:
cost_of_equity (7.05%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.54) + 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.