603677.SS WACC - Weighted Average Cost of Capital
The WACC of Qijing Machinery Co Ltd (603677.SS) is 10.0%.
| Range | Selected | |
| Cost of equity | 9.1% - 12.3% | 10.7% |
| Tax rate | 5.2% - 6.7% | 5.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.6% - 11.4% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.04 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.1% | 12.3% |
| Tax rate | 5.2% | 6.7% |
| Debt/Equity ratio | 0.13 | 0.13 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.6% | 11.4% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603677.SS | Qijing Machinery Co Ltd | 0.13 | 1.07 | 0.95 |
| 002866.SZ | Jiangsu Transimage Technology Co Ltd | 0.24 | 1.15 | 0.94 |
| 002885.SZ | Shenzhen JingQuanHua Electronics Co Ltd | 0.19 | 0.93 | 0.79 |
| 002902.SZ | Dongguan Mentech Optical & Magnetic Co Ltd | 0.22 | 1.4 | 1.16 |
| 300283.SZ | Wenzhou Hongfeng Electrical Alloy Co Ltd | 0.67 | 1.29 | 0.79 |
| 300543.SZ | Shenzhen Longood Intelligent Electric Co Ltd | 0.16 | 1.69 | 1.48 |
| 300691.SZ | Union Optech Co Ltd | 0.17 | 1.56 | 1.35 |
| 600353.SS | Chengdu Xuguang Electronics Co Ltd | 0.06 | 1.24 | 1.17 |
| 605218.SS | Ways Electron Co Ltd | 0.06 | 1.56 | 1.47 |
| 6672.TW | Ventec International Group Co Ltd | 0.03 | 0.86 | 0.84 |
| Low | High | |
| Unlevered beta | 0.95 | 1.16 |
| Relevered beta | 1.06 | 1.31 |
| Adjusted relevered beta | 1.04 | 1.21 |
603677.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 603677.SS:
cost_of_equity (10.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.04) + 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.