ACM Research Inc

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.

Recent Business and Financial Updates

• ACM Research to Announce Q2 2024 Financial Results: On July 17, 2024, ACM Research, Inc. announced that it will release its financial results for the second quarter of 2024 before the U.S. market opens on Wednesday, August 7, 2024. The company will also conduct a corresponding conference call at 8:00 a.m. U.S. Eastern Time (8:00 p.m. China Time) on the same day to discuss the results.
• Outlook: ACM Research is maintaining its revenue guidance range of USD 650 million to USD 725 million for fiscal year 2024. This projection is based on the management’s current assessment of ongoing impacts from international trade policies, expected spending scenarios of key customers, supply chain constraints, and the timing of acceptances for first tools under evaluation in the field, among other factors.
• Operating Highlights:
  • Shipments: Total shipments in the first quarter of 2024 amounted to USD 245 million, reflecting a 175% increase from the first quarter of 2023. These shipments include deliveries recognized as revenue in the quarter and deliveries of first tool systems awaiting customer acceptance for potential future revenue.
  • Expanded Advanced Packaging Portfolio: ACM introduced the Frame Wafer Cleaning Tool for advanced packaging, which effectively cleans semiconductor wafers during the post-debonding cleaning process. The tool also features an innovative solvent reclamation system that offers environmental and cost benefits. The first tool has been successfully installed and qualified with a major Chinese manufacturer.
• Financial Performance
  • Revenue: Revenue for the first quarter of 2024 was USD 152.2 million, up 105% from the same period in 2023. This increase was driven by higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, advanced packaging (excluding ECP), and services and spares.
  • Gross Margin: The gross margin for the first quarter was 52.0%, compared to 53.8% in the same period last year. Non-GAAP gross margin, which excludes stock-based compensation, was 52.5%, down from 54.0%. Despite this decrease, the gross margin exceeded ACM’s long-term business model range of 40% to 45%.
• Operating Expenses and Income:
  • Operating Expenses: Operating expenses for the first quarter of 2024 were USD 53.9 million, a 73.1% increase from the first quarter of 2023. As a percentage of revenue, operating expenses decreased to 35.4% from 41.9%. Non-GAAP operating expenses, which exclude stock-based compensation, were USD 40.1 million, up 37.4%. Non-GAAP operating expenses as a percentage of revenue decreased to 26.3% from 39.3%.
  • Operating Income: Operating income was USD 25.2 million, up from USD 8.9 million in the first quarter of 2023. The operating margin increased to 16.6% from 11.9%. Non-GAAP operating income, which excludes stock-based compensation, was USD 39.8 million, up from USD 10.9 million. Non-GAAP operating margin was 26.2%, compared to 14.7% in the prior year.
• Additional Financial Metrics:
  • Net Income and Earnings Per Share: Net income attributable to ACM Research, Inc. was USD 17.4 million, up from USD 7.1 million in the first quarter of 2023. Non-GAAP net income, excluding stock-based compensation and unrealized losses on short-term investments, was USD 34.6 million, up from USD 9.9 million. Net income per diluted share attributable to ACM Research, Inc. was USD 0.26, compared to USD 0.11. Non-GAAP net income per diluted share was USD 0.52, up from USD 0.15.
  • Cash Position: As of March 31, 2024, cash and cash equivalents, plus restricted cash and short-term and long-term time deposits, totaled USD 288.3 million, compared to USD 304.5 million as of December 31, 2023. The unrealized loss on short-term investments was USD 2.6 million, reflecting the change in market value of investments by ACM’s principal operating subsidiary, ACM Research (Shanghai), Inc. Income tax expense was USD 4.4 million, compared to USD 2.9 million in the prior year.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 30.22, downward trending nearing oversold zone, with expectations of an upward momentum in case the price sustains important support zone of USD 16.00-USD 17.00. Additionally, the stock's current positioning is below both 50-Day SMA and 200-Day SMA, which can act as a short to medium term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to ACM Research, Inc. (NASDAQ: ACMR) at the closing market price of USD 17.36 as of July 30, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

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

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

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 level is July 30, 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: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.s

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.