603353.SS WACC - Weighted Average Cost of Capital
The WACC of Hunan Heshun Petroleum Co Ltd (603353.SS) is 7.2%.
| Range | Selected | |
| Cost of equity | 6.1% - 8.6% | 7.35% |
| Tax rate | 26.7% - 26.9% | 26.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.0% - 8.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.56 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.1% | 8.6% |
| Tax rate | 26.7% | 26.9% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.0% | 8.4% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603353.SS | Hunan Heshun Petroleum Co Ltd | 0.04 | 1.27 | 1.24 |
| 000753.SZ | Fujian Zhangzhou Development Co Ltd | 0.89 | 1.16 | 0.7 |
| 000996.SZ | China CIFCO Investment Co Ltd | 0.14 | 1.73 | 1.57 |
| 1771.HK | Sunfonda Group Holdings Ltd | 13.4 | 0.51 | 0.05 |
| 1959.HK | Centenary United Holdings Ltd | 1.22 | -0.43 | -0.23 |
| 2337.HK | United Strength Power Holdings Ltd | 1.27 | 0.42 | 0.22 |
| 3836.HK | China Harmony Auto Holding Ltd | 5.17 | 1.53 | 0.32 |
| 600327.SS | Wuxi Commercial Mansion Grand Orient Co Ltd | 0.28 | 0.48 | 0.4 |
| 600386.SS | Beijing Bashi Media Co Ltd | 0.58 | 1.51 | 1.06 |
| 601258.SS | Pang Da Automobile Trade Co Ltd | 1.79 | 0.77 | 0.33 |
| Low | High | |
| Unlevered beta | 0.33 | 0.52 |
| Relevered beta | 0.34 | 0.54 |
| Adjusted relevered beta | 0.56 | 0.69 |
603353.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 603353.SS:
cost_of_equity (7.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.56) + 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.