Section 1: Company Overview and Fundamentals

1.1 Company Overview:

ACM Research, Inc. (NASDAQ: ACMR) develops, manufactures and sells semiconductor process equipment for single-wafer or batch wet cleaning, electroplating, polishing and thermal processes that are critical to advanced semiconductor device manufacturing, as well as wafer-level packaging. The Company offers two principal models of wet wafer cleaning equipment based on its Space Alternated Phase Shift (SAPS) technology, Ultra C SAPS II and Ultra C SAPS V.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 25% in the last three months, on the other hand return of 42.12% in past six months.
• The stock is in its higher band of its 52-week range of USD 34.40 and 52-week low price of USD 12.53. Post the announcement of Q2FY24 results the stock has given a return of approx. 10.12% with the current price near an important support zone of USD 15.00-USD 16.00.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 40.40.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~36.77% of the total shareholding, signifying diverse shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~6.78% and ~6.12%, respectively.

1.4 Key Metrics

Between 2019 and 2023, ACM Research, Inc. achieved substantial revenue growth, increasing from USD 107.5 million to USD 557.7 million. During this period, gross profit also saw a significant rise from USD 50.7 million to USD 276.2 million, highlighting the company's enhanced operational efficiency and effective cost management. Gross margin improved from 47.16% in 2019 to 49.52% in 2023, despite minor fluctuations, demonstrating ACM Research's ability to drive profitability through efficient operations and strategic pricing. In the first quarter of fiscal year 2024, ACM Research recorded an EBITDA margin of 18.2%, an operating margin of 16.6%, a pretax margin of 17.4%, and a net margin of 14.5%, all notably higher than the industry medians of 17.7%, 9.7%, 10.1%, and 7.1%, respectively. These strong financial metrics underscore the company’s competitive strength and its ability to sustain growth while maintaining sound financial health.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q2FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 25% in the last three months, on the other hand return of 42.12% in past six months.
• The stock is in its higher band of its 52-week range of USD 34.40 and 52-week low price of USD 12.53. Post the announcement of Q2FY24 results the stock has given a return of approx. 10.12% with the current price near an important support zone of USD 15.00-USD 16.00.
• The price is currently trading below both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 40.40.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 11, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.