6189.HK WACC - Weighted Average Cost of Capital
The WACC of Guangdong Adway Construction Group Holdings Co Ltd (6189.HK) is 6.3%.
| Range | Selected | |
| Cost of equity | 14.6% - 49.4% | 32% |
| Tax rate | 7.2% - 11.7% | 9.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 7.4% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.97 | 6.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.6% | 49.4% |
| Tax rate | 7.2% | 11.7% |
| Debt/Equity ratio | 14.17 | 14.17 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 7.4% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 6189.HK | Guangdong Adway Construction Group Holdings Co Ltd | 14.17 | 1.13 | 0.08 |
| 002178.SZ | Shanghai Yanhua Smartech Group Co Ltd | 0.03 | 1.97 | 1.92 |
| 002811.SZ | Shenzhen Cheng Chung Design Co Ltd | 0.17 | 0.97 | 0.84 |
| 1599.HK | Beijing Urban Construction Design & Development Group Co Ltd | 4 | 0.82 | 0.18 |
| 2017.HK | Chanhigh Holdings Ltd | 3.47 | -0.22 | -0.05 |
| 300732.SZ | Henan Provincial Communications Planning & Design Institute Co Ltd | 0.64 | 1.48 | 0.93 |
| 603316.SS | Chengbang Eco-Environment Co Ltd | 0.5 | 0.92 | 0.63 |
| 603959.SS | Hunan Baili Engineering Sci & Tech Co Ltd | 0.31 | 0.22 | 0.17 |
| 605178.SS | Beijing New Space Technology Co Ltd | 0.07 | 0.76 | 0.71 |
| C06.SI | CSC Holdings Ltd | 3.23 | -0.2 | -0.05 |
| Low | High | |
| Unlevered beta | 0.18 | 0.66 |
| Relevered beta | 2.45 | 9.24 |
| Adjusted relevered beta | 1.97 | 6.52 |
6189.HK'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 6189.HK:
cost_of_equity (32.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.97) + 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.