$2.06
$8.94
bear $2.06
base $5.93
bull $8.94
margin of safety $2.40
market price* $53.10
ACM Research makes single-wafer cleaning, electroplating (ECP), furnace, Track and related equipment that chip factories use to manufacture semiconductors. It is a Delaware company with its corporate office in Fremont, California, but the operating business is almost entirely in China. Its principal subsidiary, ACM Shanghai, has traded on Shanghai's STAR Market since November 2021. Substantially all of the company's tools are built to order in Shanghai, and the company sold 99.6% of its 2025 revenue ($898.0 million of $901.3 million) to customers in mainland China. About 95% of long-lived assets ($321.7 million of $340.1 million) are in mainland China. The company's auditor is based in mainland China, which the company itself flags as a delisting risk if U.S. regulators were ever unable to inspect that auditor. The company is best understood as a China-exposed equipment maker, not a diversified U.S. one. What the shares are worth. Our cases are $2.06 (bear), $5.93 (base) and $8.94 (bull) per share. The margin-of-safety price is about $2.40, roughly 60% below the base case, because the business depends on a handful of Chinese customers and on U.S. export rules. How we measured earnings. Revenue grew from $75 million in 2018 to $901 million in 2025, and net income was about $491 million over those eight years. Yet cash from operations over the same years was slightly negative, about minus $33 million, including minus $10 million in 2025. The gap is working capital: the company builds tools to customer orders and carries large inventories and receivables. We took working capital swings out of the earnings figure, about $691 million over eight years, because they reflect growth timing rather than what the business earns. We treated the 2025 provisions for uncollectible receivables ($14.5 million) and inventory write-downs ($15.5 million) as real losses and deducted them, since they are working capital that will not convert to cash. We also deducted stock compensation ($33.6 million in 2025) as a genuine cost, and only the part of capital spending needed to maintain the business. The rest of capital spending was treated as growth spending in proportion to the rise in revenue. A cross-check of net income plus depreciation and other non-cash items against operating cash flow before working capital matched exactly in all eight years. Finally, ACM Shanghai is only 74.6% owned by ACM Research after a September 2025 private offering that raised about US $623 million for ACM Shanghai. Outside holders own the rest, so we count only ACM Research's share of earnings. On this basis, owner earnings per share were $0.09 (2018), $0.28 (2019), $0.22 (2020), $0.50 (2021), minus $0.23 (2022, a year of $91 million in property purchases, most of which our capital-spending rule treated as maintenance), $0.37 (2023), $1.01 (2024) and $0.65 (2025). Starting level. We used the median of 2023 to 2025, the years since the business passed $550 million of revenue. That median is $0.65 per share, and $0.63 once adjusted to today's 74.6% ownership of ACM Shanghai. Earlier years describe a much smaller company. Owner earnings fell 35% in 2025, from $1.01 to $0.65, because gross margin dropped from 50.1% to 44.4% on product mix and higher inventory write-downs, while research spending rose to 16.1% of revenue from 13.5%. Our base case starts at $0.63, about 3% below 2025's $0.65 and not above the trailing decline. We do not assume a rebound. 44.4% sits inside the 42% to 48% gross margin range that the company says it expects. Base case ($5.93). Earnings stay flat at $0.63 per share for ten years, then fade in a straight line to zero over the following ten years. We give no credit for growth. Revenue has grown every year, and the company attributes recent growth to Chinese chipmakers expanding capacity, but that depends on customer spending and market share, and the filing gives no order backlog. Customer advances also fell by $60.8 million in 2025. The fade after year ten rests on a demonstrated record: the company's lineup now includes ECP, furnace, PECVD and Track tools alongside cleaning, and its ECP, furnace and other line rose to $199.6 million in 2025 from $103.4 million in 2023. Without a named source of earnings past year twenty, we assign none. Bear case ($2.06). U.S. export restrictions that took effect on December 2, 2024 placed ACM Shanghai and its Korean subsidiary on the U.S. Commerce Department's Entity List. The company states that these rules may directly impact ACM Shanghai's ability to meet future production plans, and may limit its access to U.S. components, software and technology. Four customers made up 52% of 2025 revenue. In this case earnings drop to the 2023 level of $0.34 per share, then decline 5% a year for ten years, and nothing is credited afterward. ACM Shanghai has also sold shares to outside investors in 2021 and again in 2025, and further issuance would reduce ACM Research's share of earnings. Bull case ($8.94). Gross margin returns to the roughly 50% the company achieved in 2023 and 2024, and owner earnings return to the 2024 level of about $0.95 per share on today's ownership. That level is held for ten years and then fades to zero over the next ten. This still assumes no revenue growth. What could make this wrong. Our estimates could prove too high if tighter U.S. or Chinese trade restrictions cut off sales, if the working capital tied up in inventory and receivables from concentrated customers proves harder to collect than we assume, or if margins fall below the company's stated range. Cash held by ACM Shanghai, including the September 2025 offering proceeds, is not added separately. Interest it earns is already part of reported earnings, and a portion of the cash belongs to outside ACM Shanghai holders.