3339.HK WACC - Weighted Average Cost of Capital

The WACC of Lonking Holdings Ltd (3339.HK) is 10.5%.

The Cost of Equity of Lonking Holdings Ltd (3339.HK) is 10.55%.

The Cost of Debt of Lonking Holdings Ltd (3339.HK) is 4.25%.

	Range	Selected
Cost of equity	9.00% - 12.10%	10.55%
Tax rate	13.80% - 15.40%	14.60%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.9% - 12.0%	10.5%

WACC

3339.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	1.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.00%	12.10%

Tax rate	13.80%	15.40%
Debt/Equity ratio	0	0
Cost of debt	4.00%	4.50%

After-tax WACC	8.9%	12.0%


Selected WACC	10.5%

3339.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 3339.HK:

cost_of_equity (10.55%) = 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.