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China Merchants Securities Asset Management Co.,Ltd (STU:195H) 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 Securities Asset Management Co.,Ltd's weighted average cost of capital is 4.36%%. China Merchants Securities Asset Management Co.,Ltd's ROIC % is 0.00% (calculated using TTM income statement data).
China Merchants Securities Asset Management Co.,Ltd 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.
Related Terms
China Merchants Securities Asset Management Co.,Ltd 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 Merchants Securities Asset Management Co.,Ltd WACC % Chart
China Merchants Securities Asset Management Co.,Ltd 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 Merchants Securities Asset Management Co.,Ltd WACC % vs Capital Markets Industry
China Merchants Securities Asset Management Co.,Ltd 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 Merchants Securities Asset Management Co.,Ltd's market capitalization (E) is €18877.969 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 Securities Asset Management Co.,Ltd's latest one-year quarterly average Book Value of Debt (D) is €24420.3704 Mil.
a) weight of equity = E / (E + D) = 18877.969 / (18877.969 + 24420.3704) = 0.436
b) weight of debt = D / (E + D) = 24420.3704 / (18877.969 + 24420.3704) = 0.564
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 4.615%. 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 Securities Asset Management Co.,Ltd's beta is 0.2270.
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 = 4.615% + 0.2270 * 6% = 5.977%
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 Securities Asset Management Co.,Ltd's interest expense (positive number) was €882.935 Mil. Its total Book Value of Debt (D) is €24420.3704 Mil.
Cost of Debt = 882.935 / 24420.3704 = 3.6156%.
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 = 258.352 / 1875.038 = 13.78%.
* 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.
China Merchants Securities Asset Management Co.,Ltd (STU:195H) has a WACC % of 4.36% as of Aug. 04, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on China Merchants Securities Asset Management Co.,Ltd and its competitors. This is 44% below median its historical median of 7.85. Over the past decade, China Merchants Securities Asset Management Co.,Ltd's WACC % has ranged from 7.17 to 8.55. According to the industry distribution chart, China Merchants Securities Asset Management Co.,Ltd ranks #267 out of 826 companies in the Capital Markets industry, placing it in the top 32.3%.
Is China Merchants Securities Asset Management Co.,Ltd's WACC % too high?
China Merchants Securities Asset Management Co.,Ltd's current WACC % of 4.36% is 44% below median its 10-year median of 7.85. Over the past 10 years, this metric has ranged from a low of 7.17 to a high of 8.55. The Capital Markets industry median WACC % is 9.31. China Merchants Securities Asset Management Co.,Ltd's value of 4.36% is 53.1% below this industry median. Based on the distribution chart, China Merchants Securities Asset Management Co.,Ltd ranks #267 out of 826 companies in the Capital Markets industry, which is above the industry midpoint. Overall, China Merchants Securities Asset Management Co.,Ltd has a GF Score™ of 68/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does China Merchants Securities Asset Management Co.,Ltd's WACC % compare to MS and GS?
According to the Capital Markets industry distribution chart, China Merchants Securities Asset Management Co.,Ltd ranks #267 out of 826 companies for WACC %. This puts China Merchants Securities Asset Management Co.,Ltd in the upper half of its industry. The industry median WACC % is 9.31. China Merchants Securities Asset Management Co.,Ltd's value of 4.36% is 53.1% below this benchmark. Historically, China Merchants Securities Asset Management Co.,Ltd's own WACC % has ranged from 7.17 to 8.55 over the past decade. While the company's 10-year median is 7.85 vs. the industry median of 9.31, China Merchants Securities Asset Management Co.,Ltd 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 Capital Markets company?
The median WACC % among Capital Markets companies is 9.31, based on 826 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 Securities Asset Management Co.,Ltd's current WACC % of 4.36% is 53.1% 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 Merchants Securities Asset Management Co.,Ltd and its competitors. For the Capital Markets industry, the median WACC % is 9.31 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Merchants Securities Asset Management Co.,Ltd's current WACC % is 4.36%, which is 44% below median its own 10-year median of 7.85. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Merchants Securities Asset Management Co.,Ltd stock overvalued right now?
Based on GuruFocus' analysis, China Merchants Securities Asset Management Co.,Ltd (STU:195H) is currently considered Significantly Undervalued. The stock's GF Value™ is €2.31, compared to a current price of €1.56 — trading 32.5% below its estimated fair value. The current WACC % is 4.36%, which is 44% below median its 10-year median of 7.85 and 53.1% below the Capital Markets industry median of 9.31. China Merchants Securities Asset Management Co.,Ltd's overall GF Score™ is 68/100 with 3 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 Securities Asset Management Co.,Ltd (STU:195H), the current WACC % is 4.36% as of Aug. 04, 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 Securities Asset Management Co.,Ltd (STU:195H) Overvalued in 2026?
Based on GuruFocus' analysis, China Merchants Securities Asset Management Co.,Ltd stock appears to be undervalued.
The current stock price of €1.56 is trading 32.5% below its estimated GF Value™ of €2.31.
GuruFocus considers China Merchants Securities Asset Management Co.,Ltd to be Significantly Undervalued.
Key valuation signals for STU:195H:
WACC %: 4.36% (44% below median its 10-year median of 7.85)
GF Value™: €2.31 vs. price of €1.56 (32.5% below fair value)
Industry Position: 53.1% below the Capital Markets median (#267 of 826)
No single metric tells the full story. See the STU:195H stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Merchants Securities Asset Management Co.,Ltd is a financial service provider. The company provides services like investment banking, financial advisory, equity underwriting, asset management, investment advisory, and trading equity securities, among others. Its business is divided into four segments: Wealth management and institutional business; Investment banking; Investment management; and Investment and trading. The Wealth management and institutional business segment, which generates key revenue, engages in the trading of stocks and futures contracts on behalf of clients and includes margin financing, securities lending, and selling financial and other wealth management products.
68GF Score
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