605123.SS WACC - Weighted Average Cost of Capital
The WACC of Wuxi Paike New Materials Technology Co Ltd (605123.SS) is 9.8%.
| Range | Selected | |
| Cost of equity | 9.5% - 12.2% | 10.85% |
| Tax rate | 11.3% - 11.9% | 11.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.7% - 11.0% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.11 | 1.19 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.5% | 12.2% |
| Tax rate | 11.3% | 11.9% |
| Debt/Equity ratio | 0.18 | 0.18 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.7% | 11.0% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 605123.SS | Wuxi Paike New Materials Technology Co Ltd | 0.18 | 1.31 | 1.12 |
| 000633.SZ | Xinjiang Hejin Holding Co Ltd | 0.09 | 1.18 | 1.09 |
| 000795.SZ | Innuovo Technology Co Ltd | 0.03 | 1.78 | 1.73 |
| 000962.SZ | Ningxia Orient Tantalum Industry Co Ltd | 0.02 | 0.84 | 0.82 |
| 002149.SZ | Western Metal Materials Co Ltd | 0.24 | 1.09 | 0.9 |
| 002428.SZ | Yunnan Lincang Xinyuan Germanium Industry Co Ltd | 0.07 | 1.71 | 1.6 |
| 002842.SZ | Guangdong Xianglu Tungsten Co Ltd | 0.43 | 1.15 | 0.83 |
| 300855.SZ | Jiangsu ToLand Alloy Co Ltd | 0.02 | 1.63 | 1.6 |
| 600338.SS | Tibet Summit Resources Co Ltd | 0.07 | 1.07 | 1.01 |
| 688379.SS | Hangzhou Huaguang Advanced Welding Materials Co Ltd | 0.37 | 1.31 | 0.98 |
| Low | High | |
| Unlevered beta | 1 | 1.1 |
| Relevered beta | 1.16 | 1.28 |
| Adjusted relevered beta | 1.11 | 1.19 |
605123.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 605123.SS:
cost_of_equity (10.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.11) + 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.