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Hongli Group Inc. Class A Ordinary Shares (HLP) — WACC Analysis

WACC Breakdown

Hongli Group Inc. Class A Ordinary Shares (HLP) has a weighted average cost of capital (WACC) of 6.9%. The cost of equity is 7.5%, derived from a beta of 0.50 and a risk-free rate of 4.7%. The after-tax cost of debt is 1.6%. The capital structure is 89.3% equity and 10.7% debt.

Interpretation

A WACC of 6.9% suggests that the market views Hongli Group Inc. Class A Ordinary Shares as relatively low-risk, with a lower cost of financing.

Investors can compare HLP's WACC of 6.9% against industry peers to gauge its relative financing costs. A beta of 0.50 reflects the stock's volatility relative to the broader market.

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VALUATION

HLP WACC: 6.86% for Hongli Group Inc. Class A Ordinary Shares

Current inputs imply a 7.49% cost of equity and a 2.00% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Hongli Group Inc. Class A Ordinary Shares Common Stock (HLP) WACC Results
Weighted Average Cost of Capital
6.86%
Cost of Equity
7.49%
Risk-Free Rate4.67%
Beta0.50
Market Risk Premium4.23%
Cost of Debt
1.58%
Pre-Tax Cost of Debt2.00%
Tax Rate21.00%
Tax Shield0.42%
Capital Structure
Equity: 89.33%($96.41M)
Debt: 10.67%($11.52M)
Equity Component
6.69%
89.33% × 7.49%
Debt Component
0.17%
10.67% × 1.58%

Hongli Group Inc. Class A Ordinary Shares (HLP) WACC in context

Hongli Group Inc. Class A Ordinary Shares (HLP) currently screens with an estimated WACC of 6.86%. That blends a 7.49% cost of equity, a 2.00% pre-tax cost of debt, and a 89.33% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What HLP WACC implies

A 6.86% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates HLP

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.50 and equity accounts for 89.33% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.