688396.SS WACC - Weighted Average Cost of Capital
The WACC of China Resources Microelectronics Ltd (688396.SS) is 10.4%.
| Range | Selected | |
| Cost of equity | 9.3% - 11.6% | 10.45% |
| Tax rate | 3.4% - 8.4% | 5.9% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 9.2% - 11.5% | 10.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.08 | 1.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 11.6% |
| Tax rate | 3.4% | 8.4% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 9.2% | 11.5% |
| Selected WACC | 10.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688396.SS | China Resources Microelectronics Ltd | 0.01 | 1.16 | 1.14 |
| 600703.SS | Sanan Optoelectronics Co Ltd | 0.23 | 1.28 | 1.05 |
| 601012.SS | LONGi Green Energy Technology Co Ltd | 0.38 | 1.56 | 1.14 |
| 603160.SS | Shenzhen Goodix Technology Co., Ltd. | 0.01 | 1.28 | 1.26 |
| 603501.SS | Will Semiconductor Co Ltd Shanghai | 0.06 | 1.22 | 1.15 |
| 603986.SS | GigaDevice Semiconductor Beijing Inc | 0.01 | 1.59 | 1.57 |
| 6415.TW | Silergy Corp | 0.02 | 0.69 | 0.68 |
| 688008.SS | Montage Technology Co Ltd | 0 | 1.48 | 1.48 |
| 688126.SS | National Silicon Industry Group Co Ltd | 0.13 | 1.17 | 1.05 |
| 688256.SS | Cambricon Technologies Corp Ltd | 0 | 0.97 | 0.97 |
| Low | High | |
| Unlevered beta | 1.1 | 1.15 |
| Relevered beta | 1.12 | 1.16 |
| Adjusted relevered beta | 1.08 | 1.11 |
688396.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 688396.SS:
cost_of_equity (10.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.08) + 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.