China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>ACMR reported C2Q23 top-line, non-GAAP EBIT, and non-GAAP net profit 22%, 130%, and 209% vs. our est., and 25%, 228%, and 248%, respectively. </li>
<li>As FY guidance was unchanged, we suggest that the revenue beat was due to tool delivery faster than expected (i.e., order pull-in).</li>
<li>We maintain our FY23 revenue estimate, but raise our net margin estimate to reflect the better-than-expected impact of USD appreciation on profitability. </li>
</ul>


ACMR reported C2Q23 top-line, non-GAAP EBIT, and non-GAAP net profit 22%, 130%, and 209% vs. our est., and 25%, 228%, and 248%, respectively. 
As FY guidance was unchanged, we suggest that the revenue beat was due to tool delivery faster than expected (i.e., order pull-in).
We maintain our FY23 revenue estimate, but raise our net margin estimate to reflect the better-than-expected impact of USD appreciation on profitability. 


[ACM Research (ACMR US, BUY, TP US$30) Review]: Beat on Order Pull-In and Favorable Foreign Exchange

<ul>
<li>We expect ACMR to report C2Q23 top-line and non-IFRS net profit in-line and 12.7% vs. consensus, respectively.</li>
<li>Peers guided that a major ACMR customer, CXMT, made purchase orders greater than they had previously anticipated. We raised our FY23 revenue estimate by 2% to US$ 574mn.</li>
<li>ACMR remains position to capture demand from export restricted local manufacturers. As a result, we maintain our BUY rating and US$ 30 TP.</li>
</ul>


We expect ACMR to report C2Q23 top-line and non-IFRS net profit in-line and 12.7% vs. consensus, respectively.
Peers guided that a major ACMR customer, CXMT, made purchase orders greater than they had previously anticipated. We raised our FY23 revenue estimate by 2% to US$ 574mn.
ACMR remains position to capture demand from export restricted local manufacturers. As a result, we maintain our BUY rating and US$ 30 TP.


[ACM Research (ACMR US, BUY, TP US$30) Preview]: CXMT Order Volume Could Be Ahead of Expectations

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

Thematic (Sector/Industry)

<ul>
<li>In the past four quarters, Chinese companies bought 65+ ArF (Argon Fluoride) Immersion lithography machines, some capable of overlay precision as fine as 1.5nm overlay for Self-Aligned Double/Quadruple/Octuple Patterning (SAD/Q/OP);</li>
<li>The race is between Chinese foundries to put these lithography machines to meet the raging demand of AI, which looks optimistic in the medium term, despite short-term challenges;</li>
<li>The race is also among the global semiconductor industry to meet the demand for testing the limit of AI's scaling law. So far the balance tips in <strong>disfavor</strong> of China. </li>
</ul>


In the past four quarters, Chinese companies bought 65+ ArF (Argon Fluoride) Immersion lithography machines, some capable of overlay precision as fine as 1.5nm overlay for Self-Aligned Double/Quadruple/Octuple Patterning (SAD/Q/OP);
The race is between Chinese foundries to put these lithography machines to meet the raging demand of AI, which looks optimistic in the medium term, despite short-term challenges;
The race is also among the global semiconductor industry to meet the demand for testing the limit of AI's scaling law. So far the balance tips in disfavor of China. 


China's Near-Term Semiconductor Bottleneck Isn't ASML

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

<ul><li>The year 2023 began with a significant downturn in the semiconductor market.</li><li>Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.</li><li>Supply outpaced demand, and the market turned into a period of oversupply.</li></ul>

The year 2023 began with a significant downturn in the semiconductor market.Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.Supply outpaced demand, and the market turned into a period of oversupply.

Semiconductor Outlook 2024: AI's Adolescence

<ul><li>Welcome to the Halloween Earnings Edition. It's a spooky time in markets.</li><li>So far, there’s been a lot of volatility this earnings season, specifically around the Magnificent 7. Let’s discuss.</li><li>I won’t discuss each company specifically, but I will focus on the high-level capex commentary.</li></ul>

Welcome to the Halloween Earnings Edition. It's a spooky time in markets.So far, there’s been a lot of volatility this earnings season, specifically around the Magnificent 7. Let’s discuss.I won’t discuss each company specifically, but I will focus on the high-level capex commentary.

Halloween Earnings Season 🎃 (Hyperscalers, TXN, VICR, SK Hynix, KLAC, MXL, INTC, AWE, ACMR, BESI)

United States

ACM Research, Inc. develops wet processing technology. The Company produces equipment for a range of applications in integrated circuits and wafer level packaging, as well as offers coating, developer, wet stripping, scrubber, and plating systems. ACM Research serves customers worldwide.

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ACM Research (ACMR US)