688500.SS WACC - Weighted Average Cost of Capital
The WACC of HCR Co Ltd (688500.SS) is 9.1%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.7% | 9.25% |
| Tax rate | 12.9% - 14.0% | 13.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.7% - 10.5% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.83 | 0.98 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.7% |
| Tax rate | 12.9% | 14.0% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.7% | 10.5% |
| Selected WACC | 9.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688500.SS | HCR Co Ltd | 0.02 | 0.81 | 0.79 |
| 003008.SZ | Xuchang KETOP Testing Research Institute Co Ltd | 0 | 0.88 | 0.88 |
| 300621.SZ | ShenZhen WeiYe Decoration Group Co Ltd | 0.85 | 1.14 | 0.65 |
| 300675.SZ | Shenzhen Institute of Building Research Co Ltd | 0.29 | 1.34 | 1.07 |
| 300688.SZ | Dark Horse Technology Group Co Ltd | 0 | 1.42 | 1.41 |
| 300778.SZ | Shenzhen New Land Tool Planning & Architectural Design Co Ltd | 0 | 1.39 | 1.38 |
| 300797.SZ | NCS Testing Technology Co Ltd | 0.04 | 1.19 | 1.16 |
| 3768.T | Riskmonster.com | 0.1 | 0.36 | 0.33 |
| 4346.T | Nexyz.Group Corp | 0.51 | 0.85 | 0.59 |
| 4490.T | VisasQ Inc | 0.39 | 0.66 | 0.49 |
| Low | High | |
| Unlevered beta | 0.74 | 0.95 |
| Relevered beta | 0.75 | 0.97 |
| Adjusted relevered beta | 0.83 | 0.98 |
688500.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 688500.SS:
cost_of_equity (9.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.83) + 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.