603133.SS WACC - Weighted Average Cost of Capital
The WACC of Tanyuan Technology Co Ltd (603133.SS) is 8.4%.
| Range | Selected | |
| Cost of equity | 14.1% - 18.4% | 16.25% |
| Tax rate | 8.7% - 11.6% | 10.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.8% - 9.1% | 8.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.87 | 2.07 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.1% | 18.4% |
| Tax rate | 8.7% | 11.6% |
| Debt/Equity ratio | 2 | 2 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.8% | 9.1% |
| Selected WACC | 8.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603133.SS | Tanyuan Technology Co Ltd | 2 | 1.07 | 0.39 |
| 000806.SZ | Galaxy Biomedical Investment Co Ltd | 0.86 | -0.12 | -0.07 |
| 002451.SZ | Shanghai Morn Electric Equipment Co Ltd | 0.24 | 0.94 | 0.78 |
| 002606.SZ | Dalian Insulator Group Co Ltd | 0.15 | 0.74 | 0.65 |
| 002927.SZ | Guizhou Taiyong Changzheng Technology Co Ltd | 0.04 | 0.9 | 0.87 |
| 300018.SZ | Wuhan Zhongyuan Huadian Science & Technology Co Ltd | 0 | 1.2 | 1.2 |
| 300112.SZ | Shenzhen Maxonic Automation Control Co Ltd | 0.09 | 1.34 | 1.24 |
| 300670.SZ | Jiangsu Daybright Intelligent Electric Co Ltd | 0.52 | 1.26 | 0.86 |
| 603633.SS | Shanghai Laimu Electronics Co Ltd | 0.37 | 1.35 | 1.01 |
| 603988.SS | SEC Electric Machinery Co Ltd | 0.03 | 1.43 | 1.4 |
| Low | High | |
| Unlevered beta | 0.82 | 0.93 |
| Relevered beta | 2.3 | 2.6 |
| Adjusted relevered beta | 1.87 | 2.07 |
603133.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 603133.SS:
cost_of_equity (16.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.87) + 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.