China Merchants Bank CoCIHKY +0.67%69 WACC % is 10.47% as of Jun. 28, 2026, which is 6% below its 10-year median of 11.17. GuruFocus rates CIHKY with a GF Score™ of 69/100 and a GF Value™ of $30.90 (Fairly Valued). The stock has 2 warning signs investors should review. Among 1,543 Banks companies, China Merchants Bank Co ranks better than 50.29% on this metric.
As of today (2026-06-28), China Merchants Bank Co's weighted average cost of capital is 10.47%%. China Merchants Bank Co's ROIC % is 0.00% (calculated using TTM income statement data).
China Merchants Bank Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
China Merchants Bank Co (OTCPK:CIHKY) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, China Merchants Bank Co's weighted average cost of capital is 10.47%%. China Merchants Bank Co's ROIC % is 0.00% (calculated using TTM income statement data).
China Merchants Bank Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
China Merchants Bank Co WACC % Competitor Comparison
For the Banks - Regional subindustry, China Merchants Bank Co's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
China Merchants Bank Co WACC % vs Banks Industry
For the Banks industry and Financial Services sector, China Merchants Bank Co's WACC % distribution charts can be found below:
* The bar in red indicates where China Merchants Bank Co's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, China Merchants Bank Co's market capitalization (E) is $144711.499 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, China Merchants Bank Co's latest one-year quarterly average Book Value of Debt (D) is $59939.8938 Mil.
a) weight of equity = E / (E + D) = 144711.499 / (144711.499 + 59939.8938) = 0.7071
b) weight of debt = D / (E + D) = 59939.8938 / (144711.499 + 59939.8938) = 0.2929
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.376%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. China Merchants Bank Co's beta is -0.0548.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.376% + -0.0548 * 6% = 4.0472%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, China Merchants Bank Co's interest expense (positive number) was $18425.736 Mil. Its total Book Value of Debt (D) is $59939.8938 Mil.
Cost of Debt = 18425.736 / 59939.8938 = 30.7404%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 3933.361 / 25419.334 = 15.47%.
China Merchants Bank Co's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.7071
*
4.0472%
+
0.2929
*
30.7404%
*
(1 - 15.47%)
=
10.47%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
China Merchants Bank Co (CIHKY) has a WACC % of 10.47% as of Jun. 28, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on China Merchants Bank Co and its competitors. This is near median its historical median of 11.17. Over the past decade, China Merchants Bank Co's WACC % has ranged from 8.88 to 19.65. According to the industry distribution chart, China Merchants Bank Co ranks #767 out of 1543 companies in the Banks industry, placing it in the top 49.7%.
Is China Merchants Bank Co's WACC % too high?
China Merchants Bank Co's current WACC % of 10.47% is near median its 10-year median of 11.17. Over the past 10 years, this metric has ranged from a low of 8.88 to a high of 19.65. The Banks industry median WACC % is 13.20. China Merchants Bank Co's value of 10.47% is 20.7% below this industry median. Based on the distribution chart, China Merchants Bank Co ranks #767 out of 1543 companies in the Banks industry, which is above the industry midpoint. Overall, China Merchants Bank Co has a GF Score™ of 69/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does China Merchants Bank Co's WACC % compare to competitors?
According to the Banks industry distribution chart, China Merchants Bank Co ranks #767 out of 1543 companies for WACC %. This puts China Merchants Bank Co in the upper half of its industry. The industry median WACC % is 13.20. China Merchants Bank Co's value of 10.47% is 20.7% below this benchmark. Historically, China Merchants Bank Co's own WACC % has ranged from 8.88 to 19.65 over the past decade. While the company's 10-year median is 11.17 vs. the industry median of 13.20, China Merchants Bank Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Banks company?
The median WACC % among Banks companies is 13.20, based on 1,543 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. China Merchants Bank Co's current WACC % of 10.47% is 20.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on China Merchants Bank Co and its competitors. For the Banks industry, the median WACC % is 13.20 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Merchants Bank Co's current WACC % is 10.47%, which is near median its own 10-year median of 11.17. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Merchants Bank Co stock overvalued right now?
Based on GuruFocus' analysis, China Merchants Bank Co (CIHKY) is currently considered Fairly Valued. The stock's GF Value™ is $30.90, compared to a current price of $28.69 — trading 7.2% below its estimated fair value. The current WACC % is 10.47%, which is near median its 10-year median of 11.17 and 20.7% below the Banks industry median of 13.20. China Merchants Bank Co's overall GF Score™ is 69/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For China Merchants Bank Co (CIHKY), the current WACC % is 10.47% as of Jun. 28, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is China Merchants Bank Co (CIHKY) Overvalued in 2026?
Based on GuruFocus' analysis, China Merchants Bank Co stock appears to be undervalued.
The current stock price of $28.69 is trading 7.2% below its estimated GF Value™ of $30.90.
GuruFocus considers China Merchants Bank Co to be Fairly Valued.
Key valuation signals for CIHKY:
WACC %: 10.47% (near median its 10-year median of 11.17)
GF Value™: $30.90 vs. price of $28.69 (7.2% below fair value)
Industry Position: 20.7% below the Banks median (#767 of 1543)
No single metric tells the full story. See the CIHKY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Merchants Bank was founded in 1987 and is headquartered in Shenzhen. The bank is China's seventh-largest listed bank by assets, with the largest distribution network among China's joint-stock banks. CMB's network has been expanding rapidly. Its outlets are located mainly in China's more developed areas, including the Pearl River and Yangtze River deltas. The firm has 18% and 82% of its shares listed on the Hong Kong and Shanghai exchanges, respectively. It has no foreign strategic investors. China Merchants Group is its largest shareholder, with a 30% stake. Retail banking, corporate banking, and wholesale banking accounted for 49%, 51%, and 0% of total profit before tax, respectively, and 40%, 58%, and 2% of total revenue in 2024.
69GF Score
Get the complete analysis for CIHKY
WACC % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
CIHKY has been successfully added to your 
