6833.HK WACC - Weighted Average Cost of Capital

The WACC of Sinco Pharmaceuticals Holdings Ltd (6833.HK) is 8.1%.

The Cost of Equity of Sinco Pharmaceuticals Holdings Ltd (6833.HK) is 9.75%.

The Cost of Debt of Sinco Pharmaceuticals Holdings Ltd (6833.HK) is 7.95%.

	Range	Selected
Cost of equity	7.40% - 12.10%	9.75%
Tax rate	25.70% - 41.00%	33.35%
Cost of debt	4.00% - 11.90%	7.95%
WACC	5.9% - 10.3%	8.1%

WACC

6833.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.76	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.40%	12.10%

Tax rate	25.70%	41.00%
Debt/Equity ratio	0.52	0.52
Cost of debt	4.00%	11.90%

After-tax WACC	5.9%	10.3%


Selected WACC	8.1%

6833.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 6833.HK:

cost_of_equity (9.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.76) + 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.