8616.HK WACC - Weighted Average Cost of Capital
The WACC of Sunray Engineering Group Ltd (8616.HK) is 6.7%.
| Range | Selected | |
| Cost of equity | 5.0% - 7.9% | 6.45% |
| Tax rate | 27.5% - 32.0% | 29.75% |
| Cost of debt | 5.4% - 14.6% | 10% |
| WACC | 4.5% - 8.8% | 6.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.36 | 0.58 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 7.9% |
| Tax rate | 27.5% | 32.0% |
| Debt/Equity ratio | 0.73 | 0.73 |
| Cost of debt | 5.4% | 14.6% |
| After-tax WACC | 4.5% | 8.8% |
| Selected WACC | 6.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 8616.HK | Sunray Engineering Group Ltd | 0.73 | 0.6 | 0.4 |
| 1220.HK | Zhidao International (Holdings) Ltd | 0.11 | 0.45 | 0.41 |
| 2193.HK | Man King Holdings Ltd | 0.12 | 0.05 | 0.05 |
| 6182.HK | Twintek Investment Holdings Ltd | 0.22 | -0.38 | -0.33 |
| 8065.HK | KML Technology Group Ltd | 0.16 | 0 | 0 |
| 8305.HK | Tong Kee (Holding) Ltd | 0.02 | -0.21 | -0.21 |
| 8445.HK | Noble Engineering Group Holdings Ltd | 0.01 | -0.05 | -0.05 |
| 8532.HK | Polyfair Holdings Ltd | 7.41 | 0.91 | 0.15 |
| 9929.HK | Sem Holdings Ltd | 0.07 | 0.58 | 0.56 |
| C32.VN | CIC39 Corp | 0.62 | 0.65 | 0.45 |
| Low | High | |
| Unlevered beta | 0.03 | 0.25 |
| Relevered beta | 0.04 | 0.37 |
| Adjusted relevered beta | 0.36 | 0.58 |
8616.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 8616.HK:
cost_of_equity (6.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.