603489.SS WACC - Weighted Average Cost of Capital
The WACC of Bafang Electric Suzhou Co Ltd (603489.SS) is 10.6%.
| Range | Selected | |
| Cost of equity | 9.2% - 12.3% | 10.75% |
| Tax rate | 13.7% - 14.2% | 13.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.1% - 12.1% | 10.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.06 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.2% | 12.3% |
| Tax rate | 13.7% | 14.2% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.1% | 12.1% |
| Selected WACC | 10.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603489.SS | Bafang Electric Suzhou Co Ltd | 0.02 | 1.87 | 1.84 |
| 002292.SZ | Alpha Group | 0.05 | 1.73 | 1.66 |
| 002489.SZ | Yotrio Group Co Ltd | 0.28 | 1.23 | 0.99 |
| 002614.SZ | Xiamen Comfort Science & Technology Group Co Ltd | 0.54 | 1.31 | 0.9 |
| 002678.SZ | Guangzhou Pearl River Piano Group Co Ltd | 0.04 | 1.39 | 1.34 |
| 300005.SZ | Toread Holdings Group Co Ltd | 0.01 | 1.29 | 1.29 |
| 300651.SZ | Jiangsu Jinling Sports Equipment Co Ltd | 0.12 | 1.42 | 1.29 |
| 600679.SS | Shanghai Phoenix Enterprise Group Co Ltd | 0.13 | 0.9 | 0.81 |
| 603129.SS | Zhejiang CFMoto Power Co Ltd | 0.15 | 0.31 | 0.27 |
| 603579.SS | Shanghai Rongtai Health Technology Corp Ltd | 0.26 | 1.4 | 1.14 |
| Low | High | |
| Unlevered beta | 1.08 | 1.29 |
| Relevered beta | 1.09 | 1.31 |
| Adjusted relevered beta | 1.06 | 1.21 |
603489.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 603489.SS:
cost_of_equity (10.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.