997.HK WACC - Weighted Average Cost of Capital
The WACC of Chinlink International Holdings Ltd (997.HK) is 6.9%.
| Range | Selected | |
| Cost of equity | 5.2% - 16.0% | 10.6% |
| Tax rate | 7.2% - 9.6% | 8.4% |
| Cost of debt | 7.0% - 7.9% | 7.45% |
| WACC | 6.5% - 7.3% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.39 | 1.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.2% | 16.0% |
| Tax rate | 7.2% | 9.6% |
| Debt/Equity ratio | 71.11 | 71.11 |
| Cost of debt | 7.0% | 7.9% |
| After-tax WACC | 6.5% | 7.3% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 997.HK | Chinlink International Holdings Ltd | 71.11 | 1.51 | 0.02 |
| 2326.HK | New Provenance Everlasting Holdings Ltd | 0.02 | 0.95 | 0.93 |
| 377.HK | China Huajun Group Ltd | 110.41 | 0.15 | 0 |
| 380.HK | Softpower International Ltd | 0.89 | 1.08 | 0.6 |
| 599.HK | E.Bon Holdings Ltd | 0.97 | 0.09 | 0.05 |
| 645.HK | Ares Asia Ltd | 0.01 | -0.15 | -0.15 |
| 7.HK | Hong Kong Finance Investment Holding Group Ltd | 4.48 | -0.16 | -0.03 |
| 8009.HK | Chinese Energy Holdings Ltd | 0.02 | 0.64 | 0.63 |
| 8080.HK | North Asia Strategic Holdings Ltd | 0.59 | 0 | 0 |
| 8162.HK | Loco Hong Kong Holdings Ltd | 0.06 | -0.19 | -0.18 |
| Low | High | |
| Unlevered beta | 0 | 0.03 |
| Relevered beta | 0.09 | 2.1 |
| Adjusted relevered beta | 0.39 | 1.74 |
997.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 997.HK:
cost_of_equity (10.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.39) + 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.