992.HK WACC - Weighted Average Cost of Capital
The WACC of Lenovo Group Ltd (992.HK) is 9.7%.
| Range | Selected | |
| Cost of equity | 9.7% - 12.1% | 10.9% |
| Tax rate | 21.2% - 21.8% | 21.5% |
| Cost of debt | 4.0% - 9.5% | 6.75% |
| WACC | 8.3% - 11.1% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.14 | 1.17 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.7% | 12.1% |
| Tax rate | 21.2% | 21.8% |
| Debt/Equity ratio | 0.27 | 0.27 |
| Cost of debt | 4.0% | 9.5% |
| After-tax WACC | 8.3% | 11.1% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 992.HK | Lenovo Group Ltd | 0.27 | 1.18 | 0.97 |
| 000021.SZ | Shenzhen Kaifa Technology Co Ltd | 0.35 | 1.29 | 1.01 |
| 000066.SZ | China Greatwall Technology Group Co Ltd | 0.26 | 1.29 | 1.08 |
| 000977.SZ | Inspur Electronic Information Industry Co Ltd | 0.18 | 1.65 | 1.45 |
| 002180.SZ | Ninestar Corp | 0.46 | 1.33 | 0.98 |
| 1810.HK | Xiaomi Corp | 0.02 | 0.98 | 0.96 |
| 300866.SZ | Anker Innovations Technology Co Ltd | 0.03 | 1.04 | 1.02 |
| 3396.HK | Legend Holdings Corp | 7.75 | 1.52 | 0.21 |
| 603019.SS | Dawning Information Industry Co Ltd | 0.02 | 1.65 | 1.63 |
| 688036.SS | Shenzhen Transsion Holdings Co Ltd | 0.09 | 1.32 | 1.24 |
| Low | High | |
| Unlevered beta | 1 | 1.04 |
| Relevered beta | 1.21 | 1.25 |
| Adjusted relevered beta | 1.14 | 1.17 |
992.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 992.HK:
cost_of_equity (10.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.14) + 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.