ACM Research Write-up w/Mgmt Analysis (ACMR).

ACMR (deep dive): China semi equipment co grew FY25 rev 15.2% to $901M, guiding $1.08-$1.175B for FY26 (21-30% growth), but gross margin compressed to 44.4% from 50.1%, op margin fell to 12.2% from 19.3%, OCF negative despite positive NI. Expanding beyond cleaning (70% rev) into ECP, furnace, PECVD, track, advanced packaging w/ 1st horizontal panel-level plating tool delivered Q4. SPM cleaning breakthrough claims best-in-class sub-20 particle count at 3nm. International validation via Singapore foundry, N.America/Singapore OSAT packaging orders, Oregon facility H2'26. Entity List placement of ACM Shanghai/Korea Dec'24 creates supply-chain risk. Parent owns 73.7% of separately-listed ACM Shanghai (STAR); proposed H-share listing potential catalyst. Addressable WFE market $21B but 99.6% of rev still Mainland China. Inventory $703M (78% of rev), first tools at customers $146M, receivables concentration high. Needham Hold, cut 2026/2027 EPS to $1.87/$2.03 on elevated OpEx; JPM Overweight, $70 PT, sees 2H26 margin recovery, 2027 int'l rev inflection. Founder-CEO Wang controls 57.3% voting power, strong tech credentials (100+ patents) but governance/succession risk. Trades ~29x Needham 2026E EPS, ~27x JPM; path-dependent rerating story dependent on margin recovery, int'l traction, value unlock.

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