The WACC of Beijing Tianyishangjia New Material Corp Ltd (688033.SS) is 9.6%.
Range | Selected | |
Cost of equity | 9.6% - 13.9% | 11.75% |
Tax rate | 14.4% - 18.3% | 16.35% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.1% - 11.1% | 9.6% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.13 | 1.44 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.6% | 13.9% |
Tax rate | 14.4% | 18.3% |
Debt/Equity ratio | 0.4 | 0.4 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.1% | 11.1% |
Selected WACC | 9.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
688033.SS | Beijing Tianyishangjia New Material Corp Ltd | 0.4 | 1.89 | 1.42 |
002480.SZ | Chengdu Xinzhu Road&Bridge Machinery Co Ltd | 1.95 | 0.45 | 0.17 |
1301.HK | D&G Technology Holding Co Ltd | 0 | 0.31 | 0.31 |
1596.HK | Hebei Yichen Industrial Group Corp Ltd | 0.33 | -0.11 | -0.08 |
300099.SZ | Uroica Precision Information Engineering Co Ltd | 0 | 1.51 | 1.51 |
300455.SZ | Beijing Ctrowell Technology Corp Ltd | 0.03 | 1.72 | 1.68 |
300589.SZ | Jianglong Shipbuilding Co Ltd | 0.08 | 1.15 | 1.08 |
300816.SZ | ActBlue Co Ltd | 0.31 | 1.63 | 1.3 |
300837.SZ | Zhejiang ZheKuang Heavy Industry Co Ltd | 0.18 | 1.37 | 1.2 |
600495.SS | Jinxi Axle Co Ltd | 0.05 | 0.65 | 0.63 |
Low | High | |
Unlevered beta | 0.9 | 1.24 |
Relevered beta | 1.19 | 1.66 |
Adjusted relevered beta | 1.13 | 1.44 |
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 688033.SS:
cost_of_equity (11.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.13) + 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.