981.HK WACC - Weighted Average Cost of Capital
The WACC of Semiconductor Manufacturing International Corp (981.HK) is 9.0%.
| Range | Selected | |
| Cost of equity | 8.4% - 11.3% | 9.85% |
| Tax rate | 4.6% - 6.9% | 5.75% |
| Cost of debt | 4.0% - 6.0% | 5% |
| WACC | 7.6% - 10.4% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.92 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.4% | 11.3% |
| Tax rate | 4.6% | 6.9% |
| Debt/Equity ratio | 0.19 | 0.19 |
| Cost of debt | 4.0% | 6.0% |
| After-tax WACC | 7.6% | 10.4% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 981.HK | Semiconductor Manufacturing International Corp | 0.19 | 1.42 | 1.2 |
| 002129.SZ | Tianjin Zhonghuan Semiconductor Ltd | 1.95 | 1.61 | 0.57 |
| 002459.SZ | JA Solar Technology Co Ltd | 1.51 | 1.46 | 0.6 |
| 1347.HK | Hua Hong Semiconductor Ltd | 0.46 | 1.07 | 0.74 |
| 300118.SZ | Risen Energy Co Ltd | 1.85 | 1.97 | 0.72 |
| 600703.SS | Sanan Optoelectronics Co Ltd | 0.23 | 1.29 | 1.06 |
| 601012.SS | LONGi Green Energy Technology Co Ltd | 0.41 | 1.59 | 1.15 |
| 603501.SS | Will Semiconductor Co Ltd Shanghai | 0.06 | 1.22 | 1.16 |
| 6415.TW | Silergy Corp | 0.01 | 0.77 | 0.76 |
| 688599.SS | Trina Solar Co Ltd | 1.74 | 1.58 | 0.6 |
| Low | High | |
| Unlevered beta | 0.73 | 0.88 |
| Relevered beta | 0.88 | 1.09 |
| Adjusted relevered beta | 0.92 | 1.06 |
981.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 981.HK:
cost_of_equity (9.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.92) + 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.