603996.SS WACC - Weighted Average Cost of Capital
The WACC of Chunghsin Technology Group Co Ltd (603996.SS) is 7.3%.
| Range | Selected | |
| Cost of equity | 29.7% - 50.5% | 40.1% |
| Tax rate | 0.7% - 4.3% | 2.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 8.0% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.4% | 6.4% |
| Adjusted beta | 4.95 | 7.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 29.7% | 50.5% |
| Tax rate | 0.7% | 4.3% |
| Debt/Equity ratio | 13.39 | 13.39 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 8.0% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 603996.SS | Chunghsin Technology Group Co Ltd | 13.39 | 2.33 | 0.16 |
| 225190.KQ | Samyang Optics Co Ltd | 0.09 | -0.44 | -0.4 |
| 2358.HK | Jiu Rong Holdings Ltd | 17.67 | 0.81 | 0.04 |
| 2488.TW | Hanpin Electron Co Ltd | 0.01 | 0.42 | 0.42 |
| 300083.SZ | Guangdong Create Century Intelligent Equipment Group Corp Ltd | 0.19 | 1.46 | 1.23 |
| 300155.SZ | Guangdong Anjubao Digital Technology Co Ltd | 0 | 2.13 | 2.13 |
| 300793.SZ | Cosonic Intelligent Technologies Co Ltd | 0.09 | 1.43 | 1.31 |
| 3882.HK | SKY Light Holdings Ltd | 0.03 | 0.4 | 0.39 |
| 600234.SS | Guanghe Landscape Culture Communication Co Ltd Shanxi | 0 | 0.46 | 0.46 |
| 600839.SS | Sichuan Changhong Electric Co Ltd | 0.84 | 1.13 | 0.62 |
| 8147.HK | Millennium Pacific Group Holdings Ltd | 0.29 | 0.01 | 0.01 |
| Low | High | |
| Unlevered beta | 0.39 | 0.46 |
| Relevered beta | 6.9 | 10.33 |
| Adjusted relevered beta | 4.95 | 7.25 |
603996.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 603996.SS:
cost_of_equity (40.10%) = risk_free_rate (3.05%) + equity_risk_premium (5.90%) * adjusted_beta (4.95) + 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.