8049.HK WACC - Weighted Average Cost of Capital

The WACC of Jilin Province Huinan Changlong Bio-pharmacy Co Ltd (8049.HK) is 9.2%.

The Cost of Equity of Jilin Province Huinan Changlong Bio-pharmacy Co Ltd (8049.HK) is 9.20%.

The Cost of Debt of Jilin Province Huinan Changlong Bio-pharmacy Co Ltd (8049.HK) is 17.40%.

	Range	Selected
Cost of equity	7.90% - 10.50%	9.20%
Tax rate	16.10% - 16.80%	16.45%
Cost of debt	4.00% - 30.80%	17.40%
WACC	7.9% - 10.5%	9.2%

WACC

8049.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.92	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	10.50%

Tax rate	16.10%	16.80%
Debt/Equity ratio	0	0
Cost of debt	4.00%	30.80%

After-tax WACC	7.9%	10.5%


Selected WACC	9.2%

8049.HK'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 8049.HK:

cost_of_equity (9.20%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.92) + 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.