The WACC of Gain Plus Holdings Ltd (9900.HK) is 5.7%.
Range | Selected | |
Cost of equity | 4.8% - 6.5% | 5.65% |
Tax rate | 14.2% - 15.0% | 14.6% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.8% - 6.5% | 5.7% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.33 | 0.37 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.8% | 6.5% |
Tax rate | 14.2% | 15.0% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.8% | 6.5% |
Selected WACC | 5.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
9900.HK | Gain Plus Holdings Ltd | 0 | -1.03 | -1.03 |
1559.HK | Kwan On Holdings Ltd | 0.04 | 0.83 | 0.8 |
1662.HK | Yee Hop Holdings Ltd | 0.37 | -0.01 | -0.01 |
1793.HK | Wecon Holdings Ltd | 0.05 | -0.04 | -0.04 |
2221.HK | New Concepts Holdings Ltd | 1.97 | 0.54 | 0.2 |
368.HK | Superland Group Holdings Ltd | 2.49 | 0.02 | 0.01 |
3728.HK | Ching Lee Holdings Ltd | 3.65 | 0.88 | 0.21 |
3789.HK | Royal Deluxe Holdings Ltd | 0.01 | 0.13 | 0.13 |
3822.HK | Sam Woo Construction Group Ltd | 3.51 | -0.43 | -0.11 |
896.HK | Hanison Construction Holdings Ltd | 6.81 | 0.11 | 0.02 |
Low | High | |
Unlevered beta | 0 | 0.06 |
Relevered beta | 0 | 0.06 |
Adjusted relevered beta | 0.33 | 0.37 |
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 9900.HK:
cost_of_equity (5.65%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.33) + 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.