8328.HK WACC - Weighted Average Cost of Capital

The WACC of Xinyi Electric Storage Holdings Ltd (8328.HK) is 7.2%.

The Cost of Equity of Xinyi Electric Storage Holdings Ltd (8328.HK) is 6.95%.

The Cost of Debt of Xinyi Electric Storage Holdings Ltd (8328.HK) is 9.30%.

	Range	Selected
Cost of equity	5.90% - 8.00%	6.95%
Tax rate	16.60% - 19.70%	18.15%
Cost of debt	4.00% - 14.60%	9.30%
WACC	4.7% - 9.7%	7.2%

WACC

8328.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.5	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.90%	8.00%

Tax rate	16.60%	19.70%
Debt/Equity ratio	0.86	0.86
Cost of debt	4.00%	14.60%

After-tax WACC	4.7%	9.7%


Selected WACC	7.2%

8328.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 8328.HK:

cost_of_equity (6.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.5) + 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.