The WACC of TL Natural Gas Holdings Ltd (8536.HK) is 7.7%.
Range | Selected | |
Cost of equity | 5.4% - 10.1% | 7.75% |
Tax rate | 5.0% - 5.7% | 5.35% |
Cost of debt | 4.0% - 7.0% | 5.5% |
WACC | 5.4% - 10.0% | 7.7% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.43 | 0.89 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.4% | 10.1% |
Tax rate | 5.0% | 5.7% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 4.0% | 7.0% |
After-tax WACC | 5.4% | 10.0% |
Selected WACC | 7.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
8536.HK | TL Natural Gas Holdings Ltd | 0.02 | -0.11 | -0.11 |
000996.SZ | China CIFCO Investment Co Ltd | 0.14 | 1.73 | 1.53 |
1268.HK | China MeiDong Auto Holdings Ltd | 1.61 | 1.82 | 0.72 |
1759.HK | Sino Gas Holdings Group Ltd | 4.53 | 0.37 | 0.07 |
1959.HK | Centenary United Holdings Ltd | 1.03 | -0.21 | -0.11 |
2337.HK | United Strength Power Holdings Ltd | 1.04 | 0.38 | 0.19 |
600386.SS | Beijing Bashi Media Co Ltd | 0.61 | 1.56 | 0.99 |
603353.SS | Hunan Heshun Petroleum Co Ltd | 0.11 | 1.35 | 1.22 |
8123.HK | Sinofortune Financial Holdings Ltd | 0.37 | 1.33 | 0.98 |
8135.HK | ZMFY Automobile Glass Services Ltd | 0.05 | -0.06 | -0.06 |
Low | High | |
Unlevered beta | 0.14 | 0.83 |
Relevered beta | 0.15 | 0.84 |
Adjusted relevered beta | 0.43 | 0.89 |
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 8536.HK:
cost_of_equity (7.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.