603259.SS WACC - Weighted Average Cost of Capital
The WACC of WuXi AppTec Co Ltd (603259.SS) is 11.5%.
| Range | Selected | |
| Cost of equity | 10.3% - 13.5% | 11.9% |
| Tax rate | 15.5% - 16.5% | 16% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 10.0% - 13.1% | 11.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.24 | 1.38 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.3% | 13.5% |
| Tax rate | 15.5% | 16.5% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 10.0% | 13.1% |
| Selected WACC | 11.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603259.SS | WuXi AppTec Co Ltd | 0.04 | 1.4 | 1.35 |
| 1521.HK | Frontage Holdings Corp | 0.53 | 1.27 | 0.88 |
| 1548.HK | Genscript Biotech Corp | 0.09 | 0.83 | 0.78 |
| 2269.HK | WuXi Biologics (Cayman) Inc | 0.05 | 2.02 | 1.93 |
| 300347.SZ | Hangzhou Tigermed Consulting Co Ltd | 0.07 | 1.62 | 1.54 |
| 300463.SZ | Maccura Biotechnology Co Ltd | 0.11 | 1.35 | 1.24 |
| 300759.SZ | Pharmaron Beijing Co Ltd | 0.14 | 1.66 | 1.48 |
| 603127.SS | Joinn Laboratories China Co Ltd | 0 | 1.7 | 1.7 |
| 688222.SS | HitGen Inc | 0.03 | 1.65 | 1.61 |
| SYNGENE.NS | Syngene International Ltd | 0.02 | 0.69 | 0.67 |
| Low | High | |
| Unlevered beta | 1.31 | 1.51 |
| Relevered beta | 1.36 | 1.57 |
| Adjusted relevered beta | 1.24 | 1.38 |
603259.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 603259.SS:
cost_of_equity (11.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.24) + 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.