631.HK WACC - Weighted Average Cost of Capital

The WACC of Sany Heavy Equipment International Holdings Company Ltd (631.HK) is 8.7%.

The Cost of Equity of Sany Heavy Equipment International Holdings Company Ltd (631.HK) is 10.65%.

The Cost of Debt of Sany Heavy Equipment International Holdings Company Ltd (631.HK) is 4.25%.

	Range	Selected
Cost of equity	9.20% - 12.10%	10.65%
Tax rate	12.50% - 15.30%	13.90%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.6% - 9.7%	8.7%

WACC

631.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.06	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.20%	12.10%

Tax rate	12.50%	15.30%
Debt/Equity ratio	0.4	0.4
Cost of debt	4.00%	4.50%

After-tax WACC	7.6%	9.7%


Selected WACC	8.7%

631.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 631.HK:

cost_of_equity (10.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.06) + 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.