The WACC of Swancor Advanced Materials Co Ltd (688585.SS) is 9.3%.
Range | Selected | |
Cost of equity | 8.6% - 11.1% | 9.85% |
Tax rate | 22.8% - 23.6% | 23.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.1% - 10.5% | 9.3% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.96 | 1.04 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.6% | 11.1% |
Tax rate | 22.8% | 23.6% |
Debt/Equity ratio | 0.1 | 0.1 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.1% | 10.5% |
Selected WACC | 9.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
688585.SS | Swancor Advanced Materials Co Ltd | 0.1 | 1.13 | 1.05 |
002361.SZ | Anhui Shenjian New Materials Co Ltd | 0.3 | 0.72 | 0.58 |
002381.SZ | Zhejiang Double Arrow Rubber Co Ltd | 0.31 | 1.05 | 0.85 |
002998.SZ | Elite Color Environmental Resources Science & Technology Co Ltd | 0.21 | 1 | 0.86 |
300041.SZ | Hubei Huitian New Materials Co Ltd | 0.57 | 1.39 | 0.96 |
300121.SZ | Shandong Yanggu Huatai Chemical Co Ltd | 0.08 | 1.56 | 1.46 |
600929.SS | Snowsky Salt Industry Group Co Ltd | 0.1 | 0.96 | 0.89 |
603002.SS | Epoxy Base Electronic Material Corp Ltd | 0.1 | 1.4 | 1.3 |
603823.SS | Lily Group Co Ltd | 0.08 | 1.1 | 1.03 |
605006.SS | Shandong Fiberglass Group Co Ltd | 0.64 | 1.08 | 0.72 |
Low | High | |
Unlevered beta | 0.88 | 0.99 |
Relevered beta | 0.94 | 1.06 |
Adjusted relevered beta | 0.96 | 1.04 |
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 688585.SS:
cost_of_equity (9.85%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.96) + 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.