603976.SS WACC - Weighted Average Cost of Capital
The WACC of ChongQing Zhengchuan Pharmaceutical Packaging Co Ltd (603976.SS) is 8.5%.
| Range | Selected | |
| Cost of equity | 7.6% - 11.2% | 9.4% |
| Tax rate | 11.2% - 12.3% | 11.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.0% - 10.0% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.8 | 1.05 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.6% | 11.2% |
| Tax rate | 11.2% | 12.3% |
| Debt/Equity ratio | 0.21 | 0.21 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.0% | 10.0% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603976.SS | ChongQing Zhengchuan Pharmaceutical Packaging Co Ltd | 0.21 | 1.02 | 0.86 |
| 002382.SZ | Blue Sail Medical Co Ltd | 0.88 | 1.03 | 0.58 |
| 1501.HK | Shanghai Kindly Medical Instruments Co Ltd | 0.06 | -0.06 | -0.06 |
| 1763.HK | China Isotope & Radiation Corp | 0.69 | 0.72 | 0.45 |
| 2393.HK | Yestar Healthcare Holdings Co Ltd | 1.66 | 0.55 | 0.22 |
| 300453.SZ | Jiangxi Sanxin Medtec Co Ltd | 0.08 | 1.05 | 0.98 |
| 300642.SZ | Tellgen Corp | 0.04 | 1.28 | 1.23 |
| 605369.SS | Zhejiang Gongdong Medical Technology Co Ltd | 0.01 | 1.16 | 1.15 |
| 688026.SS | Guangzhou Jet Bio-Filtration Co Ltd | 0.17 | 1.46 | 1.28 |
| 9997.HK | Kangji Medical Holdings Ltd | 0 | 0.6 | 0.6 |
| Low | High | |
| Unlevered beta | 0.59 | 0.91 |
| Relevered beta | 0.7 | 1.07 |
| Adjusted relevered beta | 0.8 | 1.05 |
603976.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 603976.SS:
cost_of_equity (9.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.8) + 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.