8106.HK WACC - Weighted Average Cost of Capital

The WACC of Shenghua Lande Scitech Ltd (8106.HK) is 9.9%.

The Cost of Equity of Shenghua Lande Scitech Ltd (8106.HK) is 10.55%.

The Cost of Debt of Shenghua Lande Scitech Ltd (8106.HK) is 9.35%.

	Range	Selected
Cost of equity	8.70% - 12.40%	10.55%
Tax rate	3.20% - 4.80%	4.00%
Cost of debt	7.00% - 11.70%	9.35%
WACC	7.9% - 11.9%	9.9%

WACC

8106.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.97	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.70%	12.40%

Tax rate	3.20%	4.80%
Debt/Equity ratio	0.76	0.76
Cost of debt	7.00%	11.70%

After-tax WACC	7.9%	11.9%


Selected WACC	9.9%

8106.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 8106.HK:

cost_of_equity (10.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.97) + 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.