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China Environmental Technology and Bioenergy Holdings (HKSE:01237) 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 Environmental Technology and Bioenergy Holdings's weighted average cost of capital is 3.08%%. China Environmental Technology and Bioenergy Holdings's ROIC % is -1.02% (calculated using TTM income statement data).
China Environmental Technology and Bioenergy Holdings 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 semi-annual 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 semi-annual average debt to get the simplified cost of debt.
Related Terms
China Environmental Technology and Bioenergy Holdings WACC % Historical Data
* 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 Environmental Technology and Bioenergy Holdings WACC % Chart
China Environmental Technology and Bioenergy Holdings Annual Data
* 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 Environmental Technology and Bioenergy Holdings WACC % vs Furnishings, Fixtures & Appliances Industry
China Environmental Technology and Bioenergy Holdings WACC % Calculation
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 Environmental Technology and Bioenergy Holdings's market capitalization (E) is HK$65.305 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 semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Dec. 2025, China Environmental Technology and Bioenergy Holdings's latest one-year semi-annual average Book Value of Debt (D) is HK$247.5167 Mil.
a) weight of equity = E / (E + D) = 65.305 / (65.305 + 247.5167) = 0.2088
b) weight of debt = D / (E + D) = 247.5167 / (65.305 + 247.5167) = 0.7912
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 4.649%. 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 Environmental Technology and Bioenergy Holdings's beta is 0.0053.
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 = 4.649% + 0.0053 * 6% = 4.6808%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
As of Dec. 2025, China Environmental Technology and Bioenergy Holdings's interest expense (positive number) was HK$7.517 Mil. Its total Book Value of Debt (D) is HK$247.5167 Mil.
Cost of Debt = 7.517 / 247.5167 = 3.037%.
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 = 7.072 / 56.352 = 12.55%.
* 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 Environmental Technology and Bioenergy Holdings (HKSE:01237) has a WACC % of 3.08% as of Aug. 09, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on China Environmental Technology and Bioenergy Holdings and its competitors. This is 29% below median its historical median of 4.32. Over the past decade, China Environmental Technology and Bioenergy Holdings' WACC % has ranged from 1.06 to 10.74. According to the industry distribution chart, China Environmental Technology and Bioenergy Holdings ranks #46 out of 442 companies in the Furnishings, Fixtures & Appliances industry, placing it in the top 10.4%.
Is China Environmental Technology and Bioenergy Holdings' WACC % too high?
China Environmental Technology and Bioenergy Holdings' current WACC % of 3.08% is 29% below median its 10-year median of 4.32. Over the past 10 years, this metric has ranged from a low of 1.06 to a high of 10.74. The Furnishings, Fixtures & Appliances industry median WACC % is 8.59. China Environmental Technology and Bioenergy Holdings' value of 3.08% is 64.1% below this industry median. Based on the distribution chart, China Environmental Technology and Bioenergy Holdings ranks #46 out of 442 companies in the Furnishings, Fixtures & Appliances industry, which is in the top quartile — a strong position relative to peers. Overall, China Environmental Technology and Bioenergy Holdings has a GF Score™ of 27/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does China Environmental Technology and Bioenergy Holdings' WACC % compare to SN and SGI?
According to the Furnishings, Fixtures & Appliances industry distribution chart, China Environmental Technology and Bioenergy Holdings ranks #46 out of 442 companies for WACC %. This places China Environmental Technology and Bioenergy Holdings in the top 10% of its industry — outperforming the majority of peers. The industry median WACC % is 8.59. China Environmental Technology and Bioenergy Holdings' value of 3.08% is 64.1% below this benchmark. Historically, China Environmental Technology and Bioenergy Holdings' own WACC % has ranged from 1.06 to 10.74 over the past decade. While the company's 10-year median is 4.32 vs. the industry median of 8.59, China Environmental Technology and Bioenergy Holdings 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 Furnishings, Fixtures & Appliances company?
The median WACC % among Furnishings, Fixtures & Appliances companies is 8.59, based on 442 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 Environmental Technology and Bioenergy Holdings's current WACC % of 3.08% is 64.1% 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 Environmental Technology and Bioenergy Holdings and its competitors. For the Furnishings, Fixtures & Appliances industry, the median WACC % is 8.59 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Environmental Technology and Bioenergy Holdings's current WACC % is 3.08%, which is 29% below median its own 10-year median of 4.32. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Environmental Technology and Bioenergy Holdings stock overvalued right now?
Based on GuruFocus' analysis, China Environmental Technology and Bioenergy Holdings (HKSE:01237) is currently considered Significantly Overvalued. The stock's GF Value™ is HK$0.52, compared to a current price of HK$0.68 — trading 30.8% above its estimated fair value. The current WACC % is 3.08%, which is 29% below median its 10-year median of 4.32 and 64.1% below the Furnishings, Fixtures & Appliances industry median of 8.59. China Environmental Technology and Bioenergy Holdings' overall GF Score™ is 27/100 with 5 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 Environmental Technology and Bioenergy Holdings (HKSE:01237), the current WACC % is 3.08% as of Aug. 09, 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 Environmental Technology and Bioenergy Holdings (HKSE:01237) Overvalued in 2026?
Based on GuruFocus' analysis, China Environmental Technology and Bioenergy Holdings stock appears to be overvalued.
The current stock price of HK$0.68 is trading 30.8% above its estimated GF Value™ of HK$0.52.
GuruFocus considers China Environmental Technology and Bioenergy Holdings to be Significantly Overvalued.
Key valuation signals for HKSE:01237:
WACC %: 3.08% (29% below median its 10-year median of 4.32)
GF Value™: HK$0.52 vs. price of HK$0.68 (30.8% above fair value)
Industry Position: 64.1% below the Furnishings, Fixtures & Appliances median (#46 of 442)
No single metric tells the full story. See the HKSE:01237 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Environmental Technology and Bioenergy Holdings Ltd is engaged in manufacturing and sales of wooden products and manufacturing and sales of renewable energy products. Its renewable energy business focuses on the recycling of leftover sawdust from the production of wooden products into biomass pellet fuel. Its segments include the manufacturing and sales of outdoor wooden products, and manufacturing and sales of renewable energy products. It derives the majority of revenue from the manufacturing and sales of outdoor wooden products. Geographically, it operates in The People's Republic of China, Australasia, North America, Europe, and Asia Pacific (exclusive of the PRC) with majority of revenue deriving from Australasia.
27GF Score
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