688185.SS WACC - Weighted Average Cost of Capital
The WACC of CanSino Biologics Inc (688185.SS) is 8.1%.
| Range | Selected | |
| Cost of equity | 7.5% - 10.1% | 8.8% |
| Tax rate | 0.6% - 1.0% | 0.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.0% - 9.2% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.78 | 0.9 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.5% | 10.1% |
| Tax rate | 0.6% | 1.0% |
| Debt/Equity ratio | 0.2 | 0.2 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.0% | 9.2% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688185.SS | CanSino Biologics Inc | 0.2 | 1.29 | 1.08 |
| 000513.SZ | Livzon Pharmaceutical Group Inc | 0.13 | 0.62 | 0.55 |
| 002001.SZ | Zhejiang Nhu Co Ltd | 0.14 | 0.7 | 0.62 |
| 002294.SZ | Shenzhen Salubris Pharmaceuticals Co Ltd | 0 | 0.26 | 0.25 |
| 002653.SZ | Haisco Pharmaceutical Group Co Ltd | 0.04 | 0.2 | 0.2 |
| 002821.SZ | Asymchem Laboratories Tianjin Co Ltd | 0.01 | 1.42 | 1.41 |
| 2096.HK | Simcere Pharmaceutical Group Ltd | 0.04 | 0.59 | 0.57 |
| 2552.HK | Hua Medicine | 0.1 | 1.18 | 1.07 |
| 300558.SZ | Betta Pharmaceuticals Co Ltd | 0.09 | 0.92 | 0.85 |
| 300630.SZ | Hainan Poly Pharm Co Ltd | 4.96 | 1.87 | 0.32 |
| Low | High | |
| Unlevered beta | 0.56 | 0.71 |
| Relevered beta | 0.67 | 0.85 |
| Adjusted relevered beta | 0.78 | 0.9 |
688185.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 688185.SS:
cost_of_equity (8.80%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.78) + 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.