688656.SS WACC - Weighted Average Cost of Capital
The WACC of HOB Biotech Group Corp Ltd (688656.SS) is 10.0%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.9% | 10.15% |
| Tax rate | 12.0% - 13.0% | 12.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.3% - 11.8% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.93 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.9% |
| Tax rate | 12.0% | 13.0% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.3% | 11.8% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 688656.SS | HOB Biotech Group Corp Ltd | 0.02 | 2.92 | 2.87 |
| 000004.SZ | Shenzhen GuoHua Network Security Technology Co Ltd | 0.02 | 0.99 | 0.98 |
| 000518.SZ | Jiangsu Sihuan Bioengineering Co Ltd | 0.02 | 1.57 | 1.54 |
| 1672.HK | Ascletis Pharma Inc | 0 | 1.07 | 1.07 |
| 300204.SZ | Staidson Beijing BioPharmaceuticals Co Ltd | 0.01 | 1.44 | 1.43 |
| 300238.SZ | Guanhao Biotech Co Ltd | 0.01 | 1.68 | 1.66 |
| 300683.SZ | Wuhan Hiteck Biological Pharma Co Ltd | 0.01 | 1.44 | 1.42 |
| 688198.SS | Beijing Balance Medical Technology Co Ltd | 0 | 0.74 | 0.74 |
| 688278.SS | Xiamen Amoytop Biotech Co Ltd | 0 | 0.46 | 0.46 |
| 688336.SS | Sunshine Guojian Pharmaceutical Shanghai Co Ltd | 0 | 0.71 | 0.71 |
| 8247.HK | Biosino Bio-Technology and Science Inc | 1.87 | 0.63 | 0.24 |
| Low | High | |
| Unlevered beta | 0.98 | 1.42 |
| Relevered beta | 0.9 | 1.24 |
| Adjusted relevered beta | 0.93 | 1.16 |
688656.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 688656.SS:
cost_of_equity (10.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.