889.HK WACC - Weighted Average Cost of Capital
The WACC of Datronix Holdings Ltd (889.HK) is 5.5%.
| Range | Selected | |
| Cost of equity | 4.8% - 6.3% | 5.55% |
| Tax rate | 1.9% - 19.2% | 10.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 6.2% | 5.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.32 | 0.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 4.8% | 6.3% |
| Tax rate | 1.9% | 19.2% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 6.2% |
| Selected WACC | 5.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 889.HK | Datronix Holdings Ltd | 0.03 | 0.17 | 0.17 |
| 117.HK | Tianli Holdings Group Ltd | 7.97 | -0.26 | -0.03 |
| 2078.HK | Panasialum Holdings Co Ltd | 1.7 | -0.37 | -0.14 |
| 2363.HK | Tongda Hong Tai Holdings Ltd | 0.21 | -0.55 | -0.46 |
| 40.HK | Gold Peak Industries Holdings Ltd | 8.01 | 0.18 | 0.02 |
| 515.HK | China Silver Technology Holdings Ltd | 4.07 | 0.57 | 0.11 |
| 675.HK | K & P International Holdings Ltd | 0.03 | -0.19 | -0.19 |
| 8159.HK | Glory Mark Hi-Tech (Holdings) Ltd | 1.15 | -0.02 | -0.01 |
| 8375.HK | Vertical International Holdings Ltd | 0 | 0.84 | 0.84 |
| 894.HK | Man Yue Technology Holdings Ltd | 5.83 | 0.19 | 0.03 |
| Low | High | |
| Unlevered beta | -0.02 | 0.02 |
| Relevered beta | -0.01 | 0.03 |
| Adjusted relevered beta | 0.32 | 0.35 |
889.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 889.HK:
cost_of_equity (5.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.32) + 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.