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NVC International Holdings (HKSE:02222) WACC % :8.78% (As of Dec. 15, 2024)


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What is NVC International Holdings WACC %?

As of today (2024-12-15), NVC International Holdings's weighted average cost of capital is 8.78%%. NVC International Holdings's ROIC % is 0.41% (calculated using TTM income statement data). NVC International Holdings 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.


NVC International Holdings WACC % Historical Data

The historical data trend for NVC International Holdings's WACC % can be seen below:

* 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.

* Premium members only.

NVC International Holdings WACC % Chart

NVC International Holdings Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
WACC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.94 5.20 4.29 7.73 7.62

NVC International Holdings Semi-Annual Data
Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24
WACC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.63 7.73 7.01 7.62 8.56

Competitive Comparison of NVC International Holdings's WACC %

For the Furnishings, Fixtures & Appliances subindustry, NVC International Holdings'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.


NVC International Holdings's WACC % Distribution in the Furnishings, Fixtures & Appliances Industry

For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, NVC International Holdings's WACC % distribution charts can be found below:

* The bar in red indicates where NVC International Holdings's WACC % falls into.



NVC International 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, NVC International Holdings's market capitalization (E) is HK$476.837 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 Jun. 2024, NVC International Holdings's latest one-year semi-annual average Book Value of Debt (D) is HK$65.5983 Mil.
a) weight of equity = E / (E + D) = 476.837 / (476.837 + 65.5983) = 0.8791
b) weight of debt = D / (E + D) = 65.5983 / (476.837 + 65.5983) = 0.1209

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 4.395%. 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. NVC International Holdings's beta is 0.78.
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 = 4.395% + 0.78 * 6% = 9.075%

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 Jun. 2024, NVC International Holdings's interest expense (positive number) was HK$4.733 Mil. Its total Book Value of Debt (D) is HK$65.5983 Mil.
Cost of Debt = 4.733 / 65.5983 = 7.2151%.

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 = 29.506 / 378.457 = 7.8%.

NVC International Holdings'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)
=0.8791*9.075%+0.1209*7.2151%*(1 - 7.8%)
=8.78%

* 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.


NVC International Holdings  (HKSE:02222) 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, NVC International Holdings's weighted average cost of capital is 8.78%%. NVC International Holdings's ROIC % is 0.41% (calculated using TTM income statement data). NVC International 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

NVC International Holdings Business Description

Traded in Other Exchanges
N/A
Address
Phase 3, Hong Kong Science Park, Unit 705, 7th Floor, Building 20E, Pak Shek Kok, Hong Kong, HKG
NVC International Holdings Ltd is engaged in the lighting industry. Its segment includes NVC brand lighting products - international market, Non-NVC brand lighting products - domestic market, and Non-NVC brand lighting products - international market. Its brands are NVC Lighting, ETI Solid State Lighting INC, Dernier & Hamlyn, DH Lifelabs, and NVC Electric. The majority of the revenue of the company is generated from the United States.
Executives
Canopy Capital Limited 2101 Beneficial owner
Harker Hall Capital Ltd. 2201 Interest of corporation controlled by you
Leap Gain Limited 2201 Interest of corporation controlled by you
Oneworld Legend Limited (bvi)
Harbour Faith Enterprises Limited 2101 Beneficial owner
Chan Sin Wa Carrie 2201 Interest of corporation controlled by you
Gold Interact Investment Limited 2106 Person having a security interest in shares
Su Lixin 2101 Beneficial owner
Ye Yong
Oneworld Legend Limited 2201 Interest of corporation controlled by you
Wang Keven Dun 2201 Interest of corporation controlled by you
Elec-tech International (hk) Co Ltd 2101 Beneficial owner
An Hui De Hao Run Da Dian Qi Gu Fen You Xian Gong Si 2201 Interest of corporation controlled by you
Su Lixin 2101 Beneficial owner
Zhao Yu

NVC International Holdings Headlines

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