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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
Zhongzhi Pharmaceutical HoldingsHKSE:03737 47 WACC % is 3.92% as of Sep. 02, 2026, which is 50% below its 10-year median of 7.88. GuruFocus rates HKSE:03737 with a GF Score™ of 47/100 and a GF Value™ of HK$0.89 (Modestly Undervalued). The stock has 7 warning signs investors should review. Among 1,020 Drug Manufacturers companies, Zhongzhi Pharmaceutical Holdings ranks better than 86.37% on this metric.
As of today (2026-09-02), Zhongzhi Pharmaceutical Holdings's weighted average cost of capital is 3.92%%. Zhongzhi Pharmaceutical Holdings's ROIC % is 1.38% (calculated using TTM income statement data).
Zhongzhi Pharmaceutical 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.
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, Zhongzhi Pharmaceutical Holdings's weighted average cost of capital is 3.92%%. Zhongzhi Pharmaceutical Holdings's ROIC % is 1.38% (calculated using TTM income statement data).
Zhongzhi Pharmaceutical 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
Zhongzhi Pharmaceutical 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.
For the Drug Manufacturers - Specialty & Generic subindustry, Zhongzhi Pharmaceutical 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.
Zhongzhi Pharmaceutical Holdings WACC % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Zhongzhi Pharmaceutical Holdings's WACC % distribution charts can be found below:
* The bar in red indicates where Zhongzhi Pharmaceutical Holdings'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, Zhongzhi Pharmaceutical Holdings's market capitalization (E) is HK$599.060 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, Zhongzhi Pharmaceutical Holdings's latest one-year semi-annual average Book Value of Debt (D) is HK$293.2763 Mil.
a) weight of equity = E / (E + D) = 599.060 / (599.060 + 293.2763) = 0.6713
b) weight of debt = D / (E + D) = 293.2763 / (599.060 + 293.2763) = 0.3287
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 4.796%. 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. Zhongzhi Pharmaceutical Holdings's beta is 0.0217.
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 = 4.796% + 0.0217 * 6% = 4.9262%
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, Zhongzhi Pharmaceutical Holdings's interest expense (positive number) was HK$5.907 Mil. Its total Book Value of Debt (D) is HK$293.2763 Mil.
Cost of Debt = 5.907 / 293.2763 = 2.0141%.
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 = 1.515 / 20.969 = 7.22%.
* 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.
Zhongzhi Pharmaceutical Holdings (HKSE:03737) has a WACC % of 3.92% as of Sep. 02, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Zhongzhi Pharmaceutical Holdings and its competitors. This is 50% below median its historical median of 7.88. Over the past decade, Zhongzhi Pharmaceutical Holdings' WACC % has ranged from 3.06 to 8.74. According to the industry distribution chart, Zhongzhi Pharmaceutical Holdings ranks #139 out of 1020 companies in the Drug Manufacturers industry, placing it in the top 13.6%.
Is Zhongzhi Pharmaceutical Holdings' WACC % too high?
Zhongzhi Pharmaceutical Holdings' current WACC % of 3.92% is 50% below median its 10-year median of 7.88. Over the past 10 years, this metric has ranged from a low of 3.06 to a high of 8.74. The Drug Manufacturers industry median WACC % is 8.85. Zhongzhi Pharmaceutical Holdings' value of 3.92% is 55.7% below this industry median. Based on the distribution chart, Zhongzhi Pharmaceutical Holdings ranks #139 out of 1020 companies in the Drug Manufacturers industry, which is in the top quartile — a strong position relative to peers. Overall, Zhongzhi Pharmaceutical Holdings has a GF Score™ of 47/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Zhongzhi Pharmaceutical Holdings' WACC % compare to ZTS?
According to the Drug Manufacturers industry distribution chart, Zhongzhi Pharmaceutical Holdings ranks #139 out of 1020 companies for WACC %. This places Zhongzhi Pharmaceutical Holdings in the top 14% of its industry — outperforming the majority of peers. The industry median WACC % is 8.85. Zhongzhi Pharmaceutical Holdings' value of 3.92% is 55.7% below this benchmark. Historically, Zhongzhi Pharmaceutical Holdings' own WACC % has ranged from 3.06 to 8.74 over the past decade. While the company's 10-year median is 7.88 vs. the industry median of 8.85, Zhongzhi Pharmaceutical 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 Drug Manufacturers company?
The median WACC % among Drug Manufacturers companies is 8.85, based on 1,020 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. Zhongzhi Pharmaceutical Holdings's current WACC % of 3.92% is 55.7% 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 Zhongzhi Pharmaceutical Holdings and its competitors. For the Drug Manufacturers industry, the median WACC % is 8.85 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zhongzhi Pharmaceutical Holdings's current WACC % is 3.92%, which is 50% below median its own 10-year median of 7.88. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zhongzhi Pharmaceutical Holdings stock overvalued right now?
Based on GuruFocus' analysis, Zhongzhi Pharmaceutical Holdings (HKSE:03737) is currently considered Modestly Undervalued. The stock's GF Value™ is HK$0.89, compared to a current price of HK$0.71 — trading 20.2% below its estimated fair value. The current WACC % is 3.92%, which is 50% below median its 10-year median of 7.88 and 55.7% below the Drug Manufacturers industry median of 8.85. Zhongzhi Pharmaceutical Holdings' overall GF Score™ is 47/100 with 7 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 Zhongzhi Pharmaceutical Holdings (HKSE:03737), the current WACC % is 3.92% as of Sep. 02, 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 Zhongzhi Pharmaceutical Holdings (HKSE:03737) Overvalued in 2026?
Based on GuruFocus' analysis, Zhongzhi Pharmaceutical Holdings stock appears to be undervalued.
The current stock price of HK$0.71 is trading 20.2% below its estimated GF Value™ of HK$0.89.
GuruFocus considers Zhongzhi Pharmaceutical Holdings to be Modestly Undervalued.
Key valuation signals for HKSE:03737:
WACC %: 3.92% (50% below median its 10-year median of 7.88)
GF Value™: HK$0.89 vs. price of HK$0.71 (20.2% below fair value)
Industry Position: 55.7% below the Drug Manufacturers median (#139 of 1020)
No single metric tells the full story. See the HKSE:03737 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zhongzhi Pharmaceutical Holdings Ltd is an investment holding company principally engaged in the manufacture and sale of pharmaceutical products in the PRC. The Group is a large industrial and trading enterprise group featuring researching, producing, and selling traditional Chinese medicine preparations, prepared slices of Chinese crude drugs, and foods. Its products include Shenqi Koufuye, Yinhuang Jiaonang, Yinhuang Keli, and others. Its segments are the pharmaceutical manufacturing segment, which generates maximum revenue, is engaged in the research and development, manufacturing, and sale of Chinese patent medicines and decoction pieces consisting of traditional decoction pieces and modern decoction pieces, and the operation of the chain pharmacies segment.
47GF Score
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