1811.HK WACC - Weighted Average Cost of Capital

The WACC of CGN New Energy Holdings Co Ltd (1811.HK) is 5.2%.

The Cost of Equity of CGN New Energy Holdings Co Ltd (1811.HK) is 11.10%.

The Cost of Debt of CGN New Energy Holdings Co Ltd (1811.HK) is 5.00%.

	Range	Selected
Cost of equity	7.90% - 14.30%	11.10%
Tax rate	21.10% - 21.70%	21.40%
Cost of debt	4.00% - 6.00%	5.00%
WACC	4.0% - 6.4%	5.2%

WACC

1811.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.85	1.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.90%	14.30%

Tax rate	21.10%	21.70%
Debt/Equity ratio	4.48	4.48
Cost of debt	4.00%	6.00%

After-tax WACC	4.0%	6.4%


Selected WACC	5.2%

1811.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 1811.HK:

cost_of_equity (11.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.85) + 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.