603160.SS WACC - Weighted Average Cost of Capital
The WACC of Shenzhen Goodix Technology Co., Ltd. (603160.SS) is 9.4%.
| Range | Selected | |
| Cost of equity | 8.4% - 10.6% | 9.5% |
| Tax rate | 8.6% - 15.8% | 12.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 10.6% | 9.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.93 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 10.6% |
| Tax rate | 8.6% | 15.8% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 10.6% |
| Selected WACC | 9.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603160.SS | Shenzhen Goodix Technology Co., Ltd. | 0.01 | 1.24 | 1.22 |
| 002049.SZ | Unigroup Guoxin Microelectronics Co Ltd | 0.04 | 1.62 | 1.56 |
| 002156.SZ | TongFu Microelectronics Co Ltd | 0.4 | 1.33 | 0.98 |
| 002185.SZ | Tianshui Huatian Technology Co Ltd | 0.44 | 1.31 | 0.94 |
| 002506.SZ | GCL System Integration Technology Co Ltd | 0.73 | 1.46 | 0.88 |
| 002610.SZ | Jiangsu Akcome Science & Technology Co Ltd | 3.38 | 1.75 | 0.43 |
| 600206.SS | Grinm Advanced Materials Co Ltd | 0.09 | 0.7 | 0.65 |
| 601865.SS | Flat Glass Group Co Ltd | 0.46 | 1.26 | 0.9 |
| 6415.TW | Silergy Corp | 0.01 | 0.65 | 0.64 |
| 688099.SS | Amlogic Shanghai Co Ltd | 0 | 1.67 | 1.67 |
| Low | High | |
| Unlevered beta | 0.89 | 0.95 |
| Relevered beta | 0.9 | 0.97 |
| Adjusted relevered beta | 0.93 | 0.98 |
603160.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 603160.SS:
cost_of_equity (9.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.