Evaluate Pop Marts Investment Value Using the CAPM Model

Pop Mart International Group has e merged as a leading player in the global designer toy industry, driven by its innovative blind box strategy and popular intellectual properties. Despite its rapid growth and soaring valuation post-IPO, questions persist about whether its market price reflects fundamental value or speculative optimism. This study evaluates Pop Marts investment value using the Capital Asset Pricing Model (CAPM), calculating an expected return of 8.45% based on a beta of 1.05, a risk-free rate of 3.2% and a market risk premium of 5%. However, Pop Marts current valuation metricssuch as P/E ratio exceeding 100x and an EV/Sales multiple far above industry normssuggest a significant disconnect between its market price and CAPM-derived expectation. The divergence underscores CAPMs limitations in valuing companies where intangible assets, brand influence, and speculative sentiment drive pricing. The model quantifies systematic risk but neglects consumer culture and narrative-driven demand, which are key to Pop Marts market performance. A multi-dimensional valuation approach, incorporating behavioral finance and intangible capital metrics, is advocated for high-growth consumer brands. Investors should balance traditional models with broader market insights to mitigate overvaluation risks.