688466.SS WACC - Weighted Average Cost of Capital
The WACC of GreenTech Environmental Co Ltd (688466.SS) is 6.5%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.6% | 7.1% |
| Tax rate | 12.4% - 13.1% | 12.75% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 7.7% | 6.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.48 | 0.69 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.6% |
| Tax rate | 12.4% | 13.1% |
| Debt/Equity ratio | 0.26 | 0.26 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 7.7% |
| Selected WACC | 6.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688466.SS | GreenTech Environmental Co Ltd | 0.26 | 1.11 | 0.9 |
| 000692.SZ | Shenyang Huitian Thermal Power Co Ltd | 1.24 | 0.86 | 0.41 |
| 1395.HK | ELL Environmental Holdings Ltd | 1.22 | 1.26 | 0.61 |
| 1542.HK | Taizhou Water Group Co Ltd | 52.32 | 0.15 | 0 |
| 300262.SZ | Safbon Water Service Holding Inc Shanghai | 2.72 | 0.53 | 0.16 |
| 600187.SS | Heilongjiang Interchina Water Treatment Co Ltd | 0.03 | 0.08 | 0.08 |
| 600283.SS | Qian Jiang Water Resources Development Co Ltd | 0.68 | 0.78 | 0.49 |
| 601199.SS | Jiangsu Jiangnan Water Co Ltd | 0.15 | 0.75 | 0.66 |
| 601368.SS | Guangxi Nanning Waterworks Co Ltd | 3.49 | 0.81 | 0.2 |
| U9E.SI | China Everbright Water Ltd | 3.98 | 0.23 | 0.05 |
| Low | High | |
| Unlevered beta | 0.18 | 0.44 |
| Relevered beta | 0.22 | 0.54 |
| Adjusted relevered beta | 0.48 | 0.69 |
688466.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 688466.SS:
cost_of_equity (7.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.48) + 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.