688390.SS WACC - Weighted Average Cost of Capital
The WACC of Jiangsu Goodwe Power Supply Technology Co Ltd (688390.SS) is 10.7%.
| Range | Selected | |
| Cost of equity | 11.8% - 14.7% | 13.25% |
| Tax rate | 11.3% - 14.0% | 12.65% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.7% - 11.6% | 10.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.49 | 1.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.8% | 14.7% |
| Tax rate | 11.3% | 14.0% |
| Debt/Equity ratio | 0.41 | 0.41 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.7% | 11.6% |
| Selected WACC | 10.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688390.SS | Jiangsu Goodwe Power Supply Technology Co Ltd | 0.41 | 1.73 | 1.28 |
| 002176.SZ | Jiangxi Special Electric Motor Co Ltd | 0.18 | 1.52 | 1.31 |
| 002484.SZ | Nantong Jianghai Capacitor Co Ltd | 0.03 | 1.03 | 1.01 |
| 002706.SZ | Shanghai Liangxin Electrical Co Ltd | 0.02 | 1.3 | 1.28 |
| 002851.SZ | Shenzhen Megmeet Electrical Co Ltd | 0.09 | 1.53 | 1.42 |
| 300748.SZ | Jl Mag Rare-Earth Co Ltd | 0.13 | 1.53 | 1.37 |
| 300751.SZ | Suzhou Maxwell Technologies Co Ltd | 0.21 | 1.62 | 1.37 |
| 300763.SZ | Ginlong Technologies Co Ltd | 0.49 | 1.36 | 0.95 |
| 688006.SS | Zhejiang HangKe Technology Incorporated Co | 0.08 | 1.61 | 1.5 |
| 688408.SS | Arctech Solar Holding Co Ltd | 0.36 | 0.73 | 0.56 |
| Low | High | |
| Unlevered beta | 1.28 | 1.33 |
| Relevered beta | 1.73 | 1.81 |
| Adjusted relevered beta | 1.49 | 1.54 |
688390.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 688390.SS:
cost_of_equity (13.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.49) + 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.