1099.HK WACC - Weighted Average Cost of Capital

The WACC of Sinopharm Group Co Ltd (1099.HK) is 6.2%.

The Cost of Equity of Sinopharm Group Co Ltd (1099.HK) is 10.90%.

The Cost of Debt of Sinopharm Group Co Ltd (1099.HK) is 4.40%.

	Range	Selected
Cost of equity	8.90% - 12.90%	10.90%
Tax rate	23.10% - 24.10%	23.60%
Cost of debt	4.00% - 4.80%	4.40%
WACC	5.3% - 7.1%	6.2%

WACC

1099.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.02	1.29

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.90%	12.90%

Tax rate	23.10%	24.10%
Debt/Equity ratio	1.64	1.64
Cost of debt	4.00%	4.80%

After-tax WACC	5.3%	7.1%


Selected WACC	6.2%

1099.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 1099.HK:

cost_of_equity (10.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.