603806.SS WACC - Weighted Average Cost of Capital
The WACC of Hangzhou First Applied Material Co Ltd (603806.SS) is 10.8%.
| Range | Selected | |
| Cost of equity | 9.9% - 12.9% | 11.4% |
| Tax rate | 10.5% - 11.5% | 11% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.5% - 12.2% | 10.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.18 | 1.29 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.9% | 12.9% |
| Tax rate | 10.5% | 11.5% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.5% | 12.2% |
| Selected WACC | 10.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603806.SS | Hangzhou First Applied Material Co Ltd | 0.09 | 1.17 | 1.09 |
| 002371.SZ | NAURA Technology Group Co Ltd | 0.04 | 1.19 | 1.15 |
| 300316.SZ | Zhejiang Jingsheng Mechanical & Electrical Co Ltd | 0.07 | 1.83 | 1.72 |
| 300623.SZ | Jiangsu JieJie Microelectronics Co Ltd | 0.05 | 1.8 | 1.73 |
| 300861.SZ | Yangling Metron New Material Co Ltd | 0.02 | 1.78 | 1.74 |
| 603212.SS | Cybrid Technologies Inc | 0.21 | 1.43 | 1.2 |
| 605358.SS | Hangzhou Lion Electronics Co Ltd | 0.59 | 1.58 | 1.03 |
| 688012.SS | Advanced Micro-Fabrication Equipment Inc China | 0.01 | 1.43 | 1.42 |
| 688200.SS | Beijing Huafeng Test & Control Technology Co Ltd | 0 | 1.27 | 1.27 |
| 968.HK | Xinyi Solar Holdings Ltd | 0.47 | 1.24 | 0.87 |
| Low | High | |
| Unlevered beta | 1.18 | 1.33 |
| Relevered beta | 1.27 | 1.43 |
| Adjusted relevered beta | 1.18 | 1.29 |
603806.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 603806.SS:
cost_of_equity (11.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.18) + 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.