603301.SS WACC - Weighted Average Cost of Capital
The WACC of Zhende Medical Co Ltd (603301.SS) is 10.6%.
| Range | Selected | |
| Cost of equity | 9.9% - 12.8% | 11.35% |
| Tax rate | 12.2% - 13.7% | 12.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.3% - 11.9% | 10.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.17 | 1.28 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.9% | 12.8% |
| Tax rate | 12.2% | 13.7% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.3% | 11.9% |
| Selected WACC | 10.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603301.SS | Zhende Medical Co Ltd | 0.11 | 1 | 0.91 |
| 1302.HK | LifeTech Scientific Corp | 0.08 | 1.05 | 0.98 |
| 1789.HK | AK Medical Holdings Ltd | 0.02 | 1.05 | 1.03 |
| 300171.SZ | Shanghai Tofflon Science and Technology Co Ltd | 0.01 | 1.87 | 1.86 |
| 300206.SZ | Edan Instruments Inc | 0 | 1.37 | 1.36 |
| 300298.SZ | Sinocare Inc | 0.07 | 1.31 | 1.23 |
| 300633.SZ | SonoScape Medical Corp | 0.03 | 1.71 | 1.67 |
| 688301.SS | iRay Technology Co Ltd | 0.2 | 1.44 | 1.22 |
| 688389.SS | Shenzhen Lifotronic Technology Co Ltd | 0.11 | 1.49 | 1.36 |
| 688617.SS | APT Medical Inc | 0 | 0.6 | 0.6 |
| Low | High | |
| Unlevered beta | 1.14 | 1.29 |
| Relevered beta | 1.25 | 1.42 |
| Adjusted relevered beta | 1.17 | 1.28 |
603301.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 603301.SS:
cost_of_equity (11.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.17) + 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.