997.HK WACC - Weighted Average Cost of Capital

The WACC of Chinlink International Holdings Ltd (997.HK) is 6.9%.

The Cost of Equity of Chinlink International Holdings Ltd (997.HK) is 10.90%.

The Cost of Debt of Chinlink International Holdings Ltd (997.HK) is 7.45%.

	Range	Selected
Cost of equity	5.20% - 16.60%	10.90%
Tax rate	7.20% - 9.60%	8.40%
Cost of debt	7.00% - 7.90%	7.45%
WACC	6.5% - 7.3%	6.9%

WACC

997.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.4	1.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.20%	16.60%

Tax rate	7.20%	9.60%
Debt/Equity ratio	71.11	71.11
Cost of debt	7.00%	7.90%

After-tax WACC	6.5%	7.3%


Selected WACC	6.9%

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 (10.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.