The WACC of Suzhou Xingye Materials Technology Co Ltd (603928.SS) is 9.4%.
Range | Selected | |
Cost of equity | 8.3% - 10.5% | 9.4% |
Tax rate | 12.9% - 14.0% | 13.45% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.2% - 10.5% | 9.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.91 | 0.96 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.3% | 10.5% |
Tax rate | 12.9% | 14.0% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.2% | 10.5% |
Selected WACC | 9.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
603928.SS | Suzhou Xingye Materials Technology Co Ltd | 0.01 | 1.17 | 1.16 |
000920.SZ | South Huiton Co Ltd | 0.03 | 0.61 | 0.6 |
002211.SZ | Shanghai Hongda New Material Co Ltd | 0.21 | 0.92 | 0.78 |
002886.SZ | Shenzhen WOTE Advanced Materials Co Ltd | 0.32 | 1.21 | 0.95 |
600589.SS | Guangdong Rongtai Industry Co Ltd | 0.02 | 1.38 | 1.36 |
603192.SS | Shanghai Huide Science & Technology Co Ltd | 0.17 | 0.94 | 0.82 |
603217.SS | Yuanli Chemical Group Co Ltd | 0.22 | 1.06 | 0.89 |
603266.SS | Ningbo Tianlong Electronics Co Ltd | 0.06 | 1.01 | 0.96 |
603332.SS | Suzhou Longjie Special Fiber Co Ltd | 0.03 | 0.95 | 0.93 |
603822.SS | Zhejiang Jiaao Enprotech Stock Co Ltd | 0.77 | 0.27 | 0.16 |
Low | High | |
Unlevered beta | 0.86 | 0.94 |
Relevered beta | 0.87 | 0.94 |
Adjusted relevered beta | 0.91 | 0.96 |
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 603928.SS:
cost_of_equity (9.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.91) + 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.