The WACC of Suzhou Secote Precision Electronic Co Ltd (603283.SS) is 10.5%.
Range | Selected | |
Cost of equity | 9.5% - 13.4% | 11.45% |
Tax rate | 8.3% - 9.8% | 9.05% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.9% - 12.2% | 10.5% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.12 | 1.36 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.5% | 13.4% |
Tax rate | 8.3% | 9.8% |
Debt/Equity ratio | 0.16 | 0.16 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.9% | 12.2% |
Selected WACC | 10.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
603283.SS | Suzhou Secote Precision Electronic Co Ltd | 0.16 | 1.72 | 1.51 |
000777.SZ | SUFA Technology Industry Co Ltd CNNC | 0.07 | 1.02 | 0.96 |
002270.SZ | Huaming Power Equipment Co Ltd | 0.04 | 0.99 | 0.95 |
300137.SZ | Hebei Sailhero Environmental Protection High-tech Co Ltd | 0.01 | 0.93 | 0.92 |
300420.SZ | Jiangsu Wuyang Parking Industry Group Co Ltd | 0.04 | 1.75 | 1.69 |
300435.SZ | Hangzhou Zhongtai Cryogenic Technology Corp | 0.02 | 1.1 | 1.08 |
300690.SZ | Shandong Shuangyi Technology Co Ltd | 0.03 | 1.37 | 1.32 |
601890.SS | Asian Star Anchor Chain Co Ltd Jiangsu | 0.08 | 0.99 | 0.92 |
688518.SS | Shenzhen United Winners Laser Co Ltd | 0.15 | 1.62 | 1.43 |
688559.SS | Shenzhen Hymson Laser Intelligent Equipments Co Ltd | 0.54 | 2.06 | 1.37 |
Low | High | |
Unlevered beta | 1.03 | 1.34 |
Relevered beta | 1.18 | 1.54 |
Adjusted relevered beta | 1.12 | 1.36 |
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 603283.SS:
cost_of_equity (11.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.12) + 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.