603555.SS WACC - Weighted Average Cost of Capital
The WACC of Guirenniao Co Ltd (603555.SS) is 6.9%.
| Range | Selected | |
| Cost of equity | 6.8% - 10.3% | 8.55% |
| Tax rate | 3.7% - 6.5% | 5.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 7.8% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.67 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 10.3% |
| Tax rate | 3.7% | 6.5% |
| Debt/Equity ratio | 0.79 | 0.79 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 7.8% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603555.SS | Guirenniao Co Ltd | 0.79 | 1.03 | 0.58 |
| 002098.SZ | Fujian SBS Zipper Science and Technology Co Ltd | 0.07 | 1.1 | 1.03 |
| 002569.SZ | Zhejiang Busen Garments Co Ltd | 0.02 | -0.02 | -0.02 |
| 002687.SZ | Zhejiang Giuseppe Garment Co Ltd | 0.04 | 1.22 | 1.18 |
| 1027.HK | China Jicheng Holdings Ltd | 0.22 | 0.07 | 0.06 |
| 1532.HK | China Partytime Culture Holdings Ltd | 0.12 | 0.12 | 0.11 |
| 1906.HK | Bonny International Holding Ltd | 0.33 | -0.41 | -0.31 |
| 600146.SS | Shangying Global Co Ltd | 2.51 | 1.4 | 0.41 |
| 603196.SS | Ribo Fashion Group Co Ltd | 0.05 | 1.94 | 1.85 |
| 8404.TW | Paiho Shih Holdings Corp | 1.11 | 0.95 | 0.46 |
| Low | High | |
| Unlevered beta | 0.29 | 0.51 |
| Relevered beta | 0.51 | 0.9 |
| Adjusted relevered beta | 0.67 | 0.93 |
603555.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 603555.SS:
cost_of_equity (8.55%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.67) + 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.