688090.SS WACC - Weighted Average Cost of Capital
The WACC of Guangzhou Risong Intelligent Technology Holding Co Ltd (688090.SS) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.6% - 11.4% | 10% |
| Tax rate | 3.4% - 4.3% | 3.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.4% - 11.0% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.97 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.6% | 11.4% |
| Tax rate | 3.4% | 4.3% |
| Debt/Equity ratio | 0.07 | 0.07 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.4% | 11.0% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688090.SS | Guangzhou Risong Intelligent Technology Holding Co Ltd | 0.07 | 1.4 | 1.31 |
| 002514.SZ | Suzhou Boamax Technologies Group Co Ltd | 0.15 | 0.71 | 0.62 |
| 300499.SZ | Guangzhou Goaland Energy Conservation Tech Co Ltd | 0.01 | 1.96 | 1.93 |
| 300756.SZ | Guangdong Jinma Entertainment Corp Ltd | 0.03 | 1.2 | 1.16 |
| 603011.SS | Hefei Metalforming Intelligent Manufacturing Co Ltd | 0.13 | 1.05 | 0.93 |
| 603066.SS | Nanjing Inform Storage Equipment Group Co Ltd | 0.06 | 0.9 | 0.85 |
| 603289.SS | Tederic Machinery Co Ltd | 0.33 | 0.96 | 0.73 |
| 603321.SS | Zhejiang Meilun Elevator Co Ltd | 0.07 | 1.04 | 0.98 |
| 603617.SS | Junhe Pumps Holding Co Ltd | 0.15 | 0.76 | 0.67 |
| 688360.SS | Zhejiang Damon Technology Co Ltd | 0.09 | 1.4 | 1.29 |
| Low | High | |
| Unlevered beta | 0.9 | 1.05 |
| Relevered beta | 0.96 | 1.13 |
| Adjusted relevered beta | 0.97 | 1.09 |
688090.SS'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 688090.SS:
cost_of_equity (10.00%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.97) + 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.