The WACC of Guangdong JiaYuan Technology Shares Co Ltd (688388.SS) is 9.0%.
Range | Selected | |
Cost of equity | 10.5% - 13.4% | 11.95% |
Tax rate | 13.0% - 15.3% | 14.15% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.1% - 9.9% | 9.0% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.28 | 1.37 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.5% | 13.4% |
Tax rate | 13.0% | 15.3% |
Debt/Equity ratio | 0.63 | 0.63 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.1% | 9.9% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
688388.SS | Guangdong JiaYuan Technology Shares Co Ltd | 0.63 | 2.18 | 1.41 |
002484.SZ | Nantong Jianghai Capacitor Co Ltd | 0.04 | 1 | 0.97 |
002617.SZ | Roshow Technology Co Ltd | 0.21 | 1.82 | 1.54 |
300224.SZ | Yantai Zhenghai Magnetic Material Co Ltd | 0.33 | 1.07 | 0.83 |
300748.SZ | Jl Mag Rare-Earth Co Ltd | 0.15 | 1.55 | 1.37 |
300763.SZ | Ginlong Technologies Co Ltd | 0.55 | 1.43 | 0.97 |
601222.SS | Jiangsu Linyang Energy Co Ltd | 0.47 | 0.57 | 0.4 |
603063.SS | Shenzhen Hopewind Electric Co Ltd | 0.15 | 1.19 | 1.05 |
603606.SS | Ningbo Orient Wires & Cables Co Ltd | 0.08 | 0.54 | 0.5 |
688390.SS | Jiangsu Goodwe Power Supply Technology Co Ltd | 0.43 | 1.78 | 1.29 |
688408.SS | Arctech Solar Holding Co Ltd | 0.4 | 0.7 | 0.52 |
Low | High | |
Unlevered beta | 0.97 | 1.05 |
Relevered beta | 1.42 | 1.55 |
Adjusted relevered beta | 1.28 | 1.37 |
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 688388.SS:
cost_of_equity (11.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.28) + 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.