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 07% in the last three months, similarly return of 32.49% in past six months.
• The stock is in its lower band of its 52-week range of USD 34.40 and 52-week low price of USD 13.87. Post the announcement of Q3FY24 results the stock has corrected by approx. 19.35% with the current price near an important support zone of USD 14.00-USD 15.00.
• 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 40.83.      

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

ACM Research has demonstrated consistent revenue growth from USD 107.5 million in 2019 to USD 557.7 million in 2023, with gross profit increasing from USD 50.7 million to USD 276.2 million during the same period. Gross margin has steadily improved from 47.16% in 2019 to 49.52% in 2023. For Q3FY24, the gross margin rose to 51.4% from 47.8% in Q2FY24, supported by enhanced operational efficiency. Margins also saw notable improvements, with EBITDA margin increasing from 19.7% to 22.8%, operating margin rising from 18.6% to 21.7%, and net margin expanding from 15.5% to 19.0%, reflecting stronger profitability across key metrics.

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 Q3FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 07% in the last three months, similarly return of 32.49% in past six months.
• The stock is in its lower band of its 52-week range of USD 34.40 and 52-week low price of USD 13.87. Post the announcement of Q3FY24 results the stock has corrected by approx. 19.35% with the current price near an important support zone of USD 14.00-USD 15.00.
• 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 40.83.

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 December 19, 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.