997.HK WACC - Weighted Average Cost of Capital

The WACC of Chinlink International Holdings Ltd (997.HK) is 9.9%.

The Cost of Equity of Chinlink International Holdings Ltd (997.HK) is 60.55%.

The Cost of Debt of Chinlink International Holdings Ltd (997.HK) is 9.90%.

	Range	Selected
Cost of equity	22.20% - 98.90%	60.55%
Tax rate	7.20% - 9.60%	8.40%
Cost of debt	8.40% - 11.40%	9.90%
WACC	8.0% - 11.8%	9.9%

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	3.23	13.61

Additional risk adjustments	0.0%	0.5%
Cost of equity	22.20%	98.90%

Tax rate	7.20%	9.60%
Debt/Equity ratio	58.1	58.1
Cost of debt	8.40%	11.40%

After-tax WACC	8.0%	11.8%


Selected WACC	9.9%

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 (60.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (3.23) + 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.