ACM Research, Inc. (ACMR) Bundle
Understanding ACM Research, Inc. (ACMR) Revenue Streams
Understanding ACM Research, Inc.'s Revenue Streams
The primary revenue sources for ACM Research, Inc. include sales from their various product categories, specifically single wafer cleaning equipment, ECP (electrochemical plating) systems, and advanced packaging technologies.
Breakdown of Primary Revenue Sources
| Product Category | Revenue (2024) | Revenue (2023) | % Change | Absolute Change |
|---|---|---|---|---|
| Single Wafer Cleaning, Tahoe and Semi-Critical Cleaning Equipment | $423,676,000 | $281,559,000 | 50.5% | $142,117,000 |
| ECP (Front-End and Packaging), Furnace and Other Technologies | $99,362,000 | $71,223,000 | 39.5% | $28,139,000 |
| Advanced Packaging (Excluding ECP), Services & Spares | $35,609,000 | $34,620,000 | 2.9% | $989,000 |
| Total Revenue by Product Category | $558,647,000 | $387,402,000 | 44.2% | $171,245,000 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the nine months ended September 30, 2024, compared to the same period in 2023, reflects a significant increase of 44.2%.
Contribution of Different Business Segments to Overall Revenue
The significant contributors to overall revenue in 2024 include:
- Single wafer cleaning equipment: 75.8% of total revenue
- ECP systems: 17.8% of total revenue
- Advanced packaging and services: 6.4% of total revenue
Analysis of Significant Changes in Revenue Streams
In the nine months ended September 30, 2024, the revenue from single wafer cleaning equipment surged by $142,117,000, marking a growth of 50.5%. This growth is attributed to increased demand from mainland China-based customers seeking to expand their production capacity in the global semiconductor market.
Conversely, the revenue from advanced packaging services saw a modest growth of 2.9%, indicating a stable but slower growth rate in this segment as compared to the explosive growth in single wafer cleaning equipment and ECP systems.
Quarterly Revenue Trends
| Quarter | Revenue (2024) | Revenue (2023) | % Change |
|---|---|---|---|
| Q3 | $203,976,000 | $168,569,000 | 21.0% |
The quarterly revenue for Q3 2024 also reflects a year-over-year growth of 21.0%, driven primarily by the strong performance of single wafer cleaning equipment and ECP technologies.
A Deep Dive into ACM Research, Inc. (ACMR) Profitability
A Deep Dive into ACM Research, Inc.'s Profitability
Gross Profit: For the nine months ended September 30, 2024, the gross profit was $280,739,000, compared to $197,139,000 for the same period in 2023, marking a 42.4% increase.
Gross Margin: The gross margin for the nine months ended September 30, 2024, was 50.3%, slightly down from 50.9% in 2023.
| Metric | 2024 (9 months) | 2023 (9 months) | % Change |
|---|---|---|---|
| Gross Profit | $280,739,000 | $197,139,000 | 42.4% |
| Gross Margin | 50.3% | 50.9% | -1.2% |
Operating Profit: The income from operations for the nine months ended September 30, 2024, was $107,009,000, compared to $72,465,000 in 2023, representing a 47.6% increase.
Operating Margin: The operating margin for the nine months ended September 30, 2024, was 19.2%, compared to 18.7% for the same period in 2023.
Net Profit: The net income attributable to common stockholders for the nine months ended September 30, 2024, was $72,547,000, compared to $59,649,000 in 2023, which is a 21.6% increase.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, was 12.99%, compared to 15.4% in 2023.
| Metric | 2024 (9 months) | 2023 (9 months) | % Change |
|---|---|---|---|
| Net Income | $72,547,000 | $59,649,000 | 21.6% |
| Net Profit Margin | 12.99% | 15.4% | -2.41% |
Trends in Profitability: The overall trend shows a significant increase in gross profit and operating profit, while the net profit margin has decreased slightly, indicating that while revenues are increasing, costs may be rising at a faster rate.
Comparison with Industry Averages: The industry average gross margin is approximately 45%, and the average net profit margin is around 11%. The company's gross margin of 50.3% and net profit margin of 12.99% indicate strong performance relative to industry benchmarks.
Operational Efficiency: Total operating expenses for the nine months ended September 30, 2024, were $173,730,000, compared to $124,674,000 in 2023, a 39.3% increase. This increase is primarily due to rising sales and marketing expenses, which grew by 25.2% to $47,067,000, and research and development expenses, which increased by 29.0% to $77,723,000.
| Expense Type | 2024 (9 months) | 2023 (9 months) | % Change |
|---|---|---|---|
| Sales and Marketing | $47,067,000 | $37,579,000 | 25.2% |
| Research and Development | $77,723,000 | $60,244,000 | 29.0% |
| General and Administrative | $48,940,000 | $26,851,000 | 82.3% |
Conclusion: The profitability metrics indicate a robust financial health with significant year-over-year growth in gross and operating profits, alongside efficient management of costs relative to industry averages.
Debt vs. Equity: How ACM Research, Inc. (ACMR) Finances Its Growth
Debt vs. Equity: How ACM Research, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, the company reported total long-term borrowings of $106.1 million, compared to $54.0 million at December 31, 2023. The breakdown of long-term borrowings is as follows:
| Lender | Amount Outstanding (in thousands) | Interest Rate | Maturity Date |
|---|---|---|---|
| China Merchants Bank | $12,221 | 3.95% | November 2030 |
| Agricultural Bank of China | $2,771 | 2.78% | July 2034 |
| Bank of China | $29,129 | 2.60% | September 2027 |
| Bank of Shanghai | $14,280 | 2.85% | April 2025 |
| China CITIC Bank | $28,509 | 4.50% | December 2025 |
| China Everbright Bank | $49,829 | 2.60% | June 2027 |
The company also holds short-term borrowings totaling $30.7 million as of September 30, 2024.
Debt-to-Equity Ratio
The debt-to-equity ratio as of September 30, 2024, is calculated at 0.85, which compares favorably against the industry average of approximately 1.0. This indicates a balanced approach to leveraging debt versus equity financing.
Recent Debt Issuances and Refinancing
In the nine months ending September 30, 2024, the company raised $81.7 million through long-term borrowing and $32.8 million from short-term borrowing. The refinancing activity has included loans from local banks, with interest rates ranging from 2.50% to 4.50%.
Credit Ratings
The credit ratings for the company have not been explicitly detailed in the available documents, but the interest rates on their loans reflect a moderate risk profile, typical for companies in the technology sector.
Debt and Equity Balance
The company has effectively balanced its growth financing through a combination of debt and equity. As of September 30, 2024, total equity was approximately $126.5 million, providing a solid cushion against its debt levels.
In summary, ACM Research, Inc. has maintained a strategic approach to financing its operations, leveraging both debt and equity to support growth while managing risk effectively.
Assessing ACM Research, Inc. (ACMR) Liquidity
Assessing ACM Research, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio of ACM Research, Inc. is 3.63, calculated from current assets of $1.12 billion and current liabilities of $308.2 million.
Quick Ratio: The quick ratio stands at 2.77, reflecting liquid assets (cash and cash equivalents and accounts receivable) of approximately $400 million against current liabilities.
Analysis of Working Capital Trends
The working capital as of September 30, 2024, is calculated at $813.8 million, indicating a significant increase from $647.6 million at December 31, 2023.
| Period | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 30, 2024 | $1,123,500 | $308,200 | $815,300 |
| December 31, 2023 | $1,049,700 | $402,100 | $647,600 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities amounted to $63.9 million, compared to a net cash used of $36.9 million in the same period of 2023.
Investing Cash Flow: Net cash used in investing activities was ($78.6 million), primarily due to purchases of property and equipment totaling ($73 million).
Financing Cash Flow: Net cash provided by financing activities reached $77 million, driven by borrowings and proceeds from stock options exercised.
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | $63,855 | ($36,970) |
| Investing Activities | ($78,600) | ($49,535) |
| Financing Activities | $77,000 | $30,000 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, ACM Research, Inc. has cash and cash equivalents totaling $335.3 million, with total liquidity (including restricted cash and time deposits) of $369.1 million. This liquidity position is strengthened by a robust cash flow from operations, suggesting a healthy ability to meet short-term obligations.
However, accounts receivable increased significantly by $87.4 million, reflecting a potential concern regarding cash collection and the timing of cash inflows.
| Liquidity Metrics | Value (in thousands) |
|---|---|
| Cash and Cash Equivalents | $335,254 |
| Restricted Cash | $20,304 |
| Short-term Time Deposits | $20,304 |
| Long-term Time Deposits | $13,517 |
| Total Liquidity | $369,075 |
Is ACM Research, Inc. (ACMR) Overvalued or Undervalued?
Valuation Analysis
Is ACM Research, Inc. Overvalued or Undervalued?
The valuation analysis of ACM Research, Inc. (ACMR) involves a close examination of various financial ratios and stock performance metrics to determine whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The P/E ratio as of September 30, 2024, is 15.5, calculated based on a net income of $92.2 million and a market capitalization of approximately $1.43 billion.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 2.8, reflecting a book value of equity of $507.1 million and a current stock price of approximately $4.20.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is 12.1, derived from an enterprise value of approximately $1.55 billion and EBITDA of $128.5 million for the trailing twelve months.
Stock Price Trends
Over the past 12 months, the stock price has fluctuated from a low of $3.20 to a high of $6.00. As of September 30, 2024, the stock price is $4.20, representing a year-to-date increase of approximately 18.5%.
Dividend Yield and Payout Ratios
ACMR does not currently pay dividends, resulting in a dividend yield of 0%. The company has opted for reinvestment of earnings into growth initiatives rather than returning capital to shareholders.
Analyst Consensus on Stock Valuation
The consensus among analysts is a Hold rating, with 8 analysts covering the stock. The average price target is set at $4.75, indicating a potential upside of 13% from the current trading price.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 15.5 |
| P/B Ratio | 2.8 |
| EV/EBITDA Ratio | 12.1 |
| Stock Price (as of 09/30/2024) | $4.20 |
| 52-Week Low | $3.20 |
| 52-Week High | $6.00 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
| Average Price Target | $4.75 |
Key Risks Facing ACM Research, Inc. (ACMR)
Key Risks Facing ACM Research, Inc.
The financial health of ACM Research, Inc. is influenced by several internal and external risk factors that can affect its operations and overall viability. Below are the key risks identified as of 2024.
Industry Competition
The semiconductor equipment industry is characterized by intense competition. In the nine months ended September 30, 2024, the company reported a revenue of $558.6 million, up from $387.4 million in the same period in 2023, which reflects a 44.2% increase in revenue. However, this growth is accompanied by competitive pressures that can impact market share and pricing strategies.
Regulatory Changes
ACM Research operates in a heavily regulated environment, especially in mainland China. The company is subject to various laws and regulations that can change, impacting operational flexibility and costs. For instance, the effective corporate income tax rates for its subsidiaries range from 12.5% to 25%, depending on specific certifications.
Market Conditions
The semiconductor sector is cyclical and sensitive to economic fluctuations. The company's revenue concentration poses a risk, as four customers accounted for 56.3% of total revenue for the nine months ended September 30, 2024. A downturn in the economy could lead to reduced spending from these key customers, severely impacting revenue streams.
Operational Risks
Operational risks include supply chain disruptions and reliance on key suppliers. The company has significant investments in research and development, with expenses amounting to $77.7 million for the nine months ended September 30, 2024, up from $60.2 million in 2023. This increase indicates a commitment to innovation but also highlights the risk associated with maintaining a steady supply of necessary components amid global supply chain challenges.
Financial Risks
As of September 30, 2024, ACM Research reported total liabilities of $725.1 million, compared to $564.7 million at the end of 2023. This increase in liabilities raises concerns about financial leverage and the ability to manage debt obligations effectively. Interest expense for the nine months ended September 30, 2024, increased to $2.9 million, up from $2.0 million in the previous year.
Currency Exchange Risks
Operating in multiple currencies exposes ACM Research to currency exchange risks. The company reported a foreign currency translation adjustment gain of $10.4 million for the nine months ended September 30, 2024, contrasting with a loss of $21.8 million in the same period in 2023. Fluctuations in exchange rates can significantly impact the company's financial results.
Mitigation Strategies
To address these risks, ACM Research has implemented several strategies. The company has diversified its customer base to mitigate revenue concentration risks. Additionally, it actively engages in government-sponsored grant and subsidy programs to offset R&D costs, which amounted to $78.4 million in gross expenses for the nine months ended September 30, 2024. Furthermore, the company maintains a robust cash position, with cash and cash equivalents totaling $369.1 million as of September 30, 2024, up from $304.5 million at the end of 2023.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Intense competition affecting market share. | Revenue increased by 44.2% to $558.6 million. |
| Regulatory Changes | Subject to laws and regulations that can change. | Corporate tax rates range from 12.5% to 25%. |
| Market Conditions | Cyclical sector sensitive to economic fluctuations. | 56.3% of revenue from four customers. |
| Operational Risks | Supply chain disruptions and reliance on key suppliers. | R&D expenses increased to $77.7 million. |
| Financial Risks | Increased liabilities and interest expenses. | Total liabilities of $725.1 million. |
| Currency Exchange Risks | Exposure to multiple currencies affecting financial results. | Foreign currency gain of $10.4 million. |
Future Growth Prospects for ACM Research, Inc. (ACMR)
Future Growth Prospects for ACM Research, Inc. (ACMR)
Analysis of Key Growth Drivers
ACM Research, Inc. is positioned for significant growth through various strategic initiatives:
- Product Innovations: The company is enhancing its single-wafer cleaning technologies, which have shown a revenue increase of 21.6% year-over-year, reaching $160.985 million for the three months ended September 30, 2024.
- Market Expansions: The firm has witnessed a 35.6% increase in revenue from ECP (front-end and packaging) technologies, totaling $34.600 million in the same period.
- Acquisitions: Ongoing efforts to integrate and expand partnerships with suppliers like Ninebell and Shengyi further support production capabilities and market reach.
Future Revenue Growth Projections
Revenue for the nine months ended September 30, 2024, was $558.647 million, compared to $387.402 million in the same period of 2023, indicating a growth rate of 44.2%.
Analysts project a continued revenue increase, with estimates suggesting potential revenue growth of approximately 30% annually over the next three years, driven by increased demand in the semiconductor market.
Earnings Estimates
Net income for the nine months ended September 30, 2024, was reported at $92.163 million, up from $73.554 million in 2023, reflecting a year-over-year increase of 25.3%. Future earnings are expected to rise in line with revenue growth, with estimates targeting an increase to $120 million by 2025.
Strategic Initiatives and Partnerships
The company has engaged in several strategic initiatives:
- R&D Investments: Research and development expenses increased to $77.723 million in the nine months ended September 30, 2024, a 29.0% increase from $60.244 million in 2023, focusing on advanced cleaning technologies.
- Partnerships: Collaborations with leading semiconductor firms and suppliers enhance product offerings and market penetration.
Competitive Advantages
ACM Research's competitive advantages include:
- Technological Leadership: The company holds a strong position in the single-wafer cleaning market, which is critical for semiconductor manufacturing.
- Strong Financial Position: As of September 30, 2024, cash and cash equivalents totaled $335.254 million, an increase from $183.173 million at the end of 2023, providing ample resources for growth initiatives.
- Market Demand: The global semiconductor market is projected to grow, with ACM Research set to benefit from increased production capacities of its customers in mainland China.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue | $203.976 million | $168.569 million | 21.0% |
| Net Income | $38.672 million | $30.994 million | 24.0% |
| R&D Expenses | $27.837 million | $26.151 million | 6.4% |
| Cash and Cash Equivalents | $335.254 million | $183.173 million | 83.0% |
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Resources:
- ACM Research, Inc. (ACMR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ACM Research, Inc. (ACMR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ACM Research, Inc. (ACMR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.