603679.SS WACC - Weighted Average Cost of Capital
The WACC of Sichuan Huati Lighting Technology Co Ltd (603679.SS) is 8.7%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.5% | 9.15% |
| Tax rate | 6.2% - 7.4% | 6.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.5% - 9.9% | 8.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.84 | 0.95 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.5% |
| Tax rate | 6.2% | 7.4% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.5% | 9.9% |
| Selected WACC | 8.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603679.SS | Sichuan Huati Lighting Technology Co Ltd | 0.12 | 1.55 | 1.4 |
| 000806.SZ | Galaxy Biomedical Investment Co Ltd | 0.86 | -0.12 | -0.07 |
| 002141.SZ | Infund Holding Co Ltd | 0.09 | -0.13 | -0.12 |
| 002451.SZ | Shanghai Morn Electric Equipment Co Ltd | 0.23 | 0.98 | 0.8 |
| 002606.SZ | Dalian Insulator Group Co Ltd | 0.15 | 0.78 | 0.68 |
| 002927.SZ | Guizhou Taiyong Changzheng Technology Co Ltd | 0.04 | 0.92 | 0.89 |
| 300112.SZ | Shenzhen Maxonic Automation Control Co Ltd | 0.09 | 1.36 | 1.26 |
| 600379.SS | Shaanxi Baoguang Vacuum Electronic Apparatus Co Ltd | 0.11 | 0.77 | 0.69 |
| 603133.SS | Tanyuan Technology Co Ltd | 2 | 1.07 | 0.38 |
| 603988.SS | SEC Electric Machinery Co Ltd | 0.03 | 1.4 | 1.37 |
| Low | High | |
| Unlevered beta | 0.69 | 0.84 |
| Relevered beta | 0.76 | 0.93 |
| Adjusted relevered beta | 0.84 | 0.95 |
603679.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 603679.SS:
cost_of_equity (9.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.84) + 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.