840.HK WACC - Weighted Average Cost of Capital
The WACC of Xinjiang Tianye Water Saving Irrigation System Co Ltd (840.HK) is 5.6%.
| Range | Selected | |
| Cost of equity | 6.2% - 9.6% | 7.9% |
| Tax rate | 9.2% - 38.7% | 23.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.2% - 5.9% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.55 | 0.82 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.2% | 9.6% |
| Tax rate | 9.2% | 38.7% |
| Debt/Equity ratio | 1.31 | 1.31 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.2% | 5.9% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 840.HK | Xinjiang Tianye Water Saving Irrigation System Co Ltd | 1.31 | 0.45 | 0.21 |
| 002890.SZ | Shandong Hongyu Agricultural Machinery Co Ltd | 0.02 | 0.86 | 0.84 |
| 050860.KQ | Asia Technology Co Ltd | 0.82 | 0.45 | 0.26 |
| 1527.HK | Zhejiang Tengy Environmental Technology Co Ltd | 0.5 | -0.05 | -0.03 |
| 1645.HK | Haina Intelligent Equipment International Holdings Ltd | 0.5 | -0.14 | -0.1 |
| 300159.SZ | Xinjiang Machinery Research Institute Co Ltd | 0.37 | 1.55 | 1.17 |
| 5GD.SI | Sunpower Group Ltd | 4.54 | 0.33 | 0.07 |
| 601038.SS | First Tractor Co Ltd | 0.21 | 0.55 | 0.46 |
| 603789.SS | Thinker Agricultural Machinery Co Ltd | 0.23 | 0.92 | 0.77 |
| B49.SI | World Precision Machinery Ltd | 0.62 | 0.05 | 0.03 |
| Low | High | |
| Unlevered beta | 0.15 | 0.34 |
| Relevered beta | 0.33 | 0.73 |
| Adjusted relevered beta | 0.55 | 0.82 |
840.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 840.HK:
cost_of_equity (7.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.