The WACC of JDM JingDa Machine Ningbo Co Ltd (603088.SS) is 9.7%.
Range | Selected | |
Cost of equity | 8.5% - 11.1% | 9.8% |
Tax rate | 13.3% - 13.6% | 13.45% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.4% - 11.0% | 9.7% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.94 | 1.04 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.5% | 11.1% |
Tax rate | 13.3% | 13.6% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.4% | 11.0% |
Selected WACC | 9.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
603088.SS | JDM JingDa Machine Ningbo Co Ltd | 0.02 | 1.43 | 1.41 |
002667.SZ | AnShan Heavy Duty Mining Machinery Co Ltd | 0.21 | 0.81 | 0.68 |
002871.SZ | Qingdao Weflo Valve Co Ltd | 0.11 | 0.92 | 0.84 |
002943.SZ | Hunan Yujing Machinery Co Ltd | 0.24 | 1.18 | 0.98 |
300126.SZ | Ken Holding Co Ltd | 0.03 | 1.32 | 1.29 |
300275.SZ | Chongqing Mas Sci & Tech Co Ltd | 0.05 | 1.19 | 1.13 |
603090.SS | Wuxi Hongsheng Heat Exchanger Manufacturing Co Ltd | 0.05 | 0.98 | 0.94 |
603656.SS | Hefei Taihe Intelligent Technology Group Co Ltd | 0.01 | 0.84 | 0.83 |
603895.SS | Shanghai Tianyong Engineering Co Ltd | 0.18 | 0.93 | 0.8 |
688215.SS | Zhejiang Risun Intelligent Technology Co Ltd | 0.06 | 1.56 | 1.48 |
Low | High | |
Unlevered beta | 0.9 | 1.04 |
Relevered beta | 0.91 | 1.06 |
Adjusted relevered beta | 0.94 | 1.04 |
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 603088.SS:
cost_of_equity (9.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.94) + 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.