The WACC of Touchstone International Medical Science Co Ltd (688013.SS) is 9.3%.
Range | Selected | |
Cost of equity | 7.8% - 10.8% | 9.3% |
Tax rate | 8.6% - 11.4% | 10% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.8% - 10.7% | 9.3% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.83 | 0.99 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.8% | 10.8% |
Tax rate | 8.6% | 11.4% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.8% | 10.7% |
Selected WACC | 9.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
688013.SS | Touchstone International Medical Science Co Ltd | 0 | 1.32 | 1.32 |
1501.HK | Shanghai Kindly Medical Instruments Co Ltd | 0.06 | -0.05 | -0.05 |
1763.HK | China Isotope & Radiation Corp | 0.76 | 0.71 | 0.42 |
2393.HK | Yestar Healthcare Holdings Co Ltd | 1.84 | 0.49 | 0.18 |
300453.SZ | Jiangxi Sanxin Medtec Co Ltd | 0.08 | 1.06 | 0.99 |
603309.SS | Well Lead Medical Co Ltd | 0.14 | 1.11 | 0.99 |
603880.SS | Jiangsu Nanfang Medical Co Ltd | 0.32 | 1.13 | 0.87 |
605369.SS | Zhejiang Gongdong Medical Technology Co Ltd | 0.01 | 1.13 | 1.13 |
688338.SS | Beijing Succeeder Technology Inc | 0 | 1.4 | 1.4 |
9997.HK | Kangji Medical Holdings Ltd | 0 | 0.57 | 0.57 |
Low | High | |
Unlevered beta | 0.75 | 0.99 |
Relevered beta | 0.75 | 0.99 |
Adjusted relevered beta | 0.83 | 0.99 |
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 688013.SS:
cost_of_equity (9.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.83) + 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.