993.HK WACC - Weighted Average Cost of Capital
The WACC of Huarong International Financial Holdings Ltd (993.HK) is 7.7%.
| Range | Selected | |
| Cost of equity | 5.4% - 8.2% | 6.8% |
| Tax rate | 1.0% - 2.1% | 1.55% |
| Cost of debt | 7.0% - 9.8% | 8.4% |
| WACC | 6.3% - 9.1% | 7.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.43 | 0.62 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 8.2% |
| Tax rate | 1.0% | 2.1% |
| Debt/Equity ratio | 1.57 | 1.57 |
| Cost of debt | 7.0% | 9.8% |
| After-tax WACC | 6.3% | 9.1% |
| Selected WACC | 7.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 993.HK | Huarong International Financial Holdings Ltd | 1.57 | 8.94 | 3.5 |
| 1428.HK | Bright Smart Securities & Commodities Group Ltd | 0.26 | 1.7 | 1.35 |
| 1469.HK | Get Nice Financial Group Ltd | 0.01 | 0.25 | 0.25 |
| 188.HK | Sunwah Kingsway Capital Holdings Ltd | 0.41 | 0.48 | 0.34 |
| 273.HK | Mason Group Holdings Ltd | 0.06 | -0.04 | -0.03 |
| 290.HK | China Fortune Financial Group Ltd | 0.04 | 0.03 | 0.03 |
| 6058.HK | China Industrial Securities International Financial Group Ltd | 5.69 | 1.83 | 0.28 |
| 619.HK | South China Financial Holdings Ltd | 5.52 | 0.45 | 0.07 |
| 8098.HK | CL Group (Holdings) Ltd | 0.14 | -0.03 | -0.03 |
| 812.HK | Southwest Securities International Securities Ltd | 1.26 | 0.27 | 0.12 |
| 8540.HK | Victory Securities (Holdings) Company Ltd | 0.15 | 0.05 | 0.04 |
| Low | High | |
| Unlevered beta | 0.07 | 0.25 |
| Relevered beta | 0.15 | 0.43 |
| Adjusted relevered beta | 0.43 | 0.62 |
993.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 993.HK:
cost_of_equity (6.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.43) + 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.