ACM Research (ACMR.OQ): Cleaning pioneer expanding footprint

We resume coverage of ACM Research (ACMR) with a Buy rating. Our target price of USD118.00 is based on 6.0x forward EV/sales and our 2027F sales revenue forecast. We believe the stock is now trading at a discount to local peers and deserves a higher valuation because: (1) ACMR has been trading at a discount relative to its A-share listed subsidiary ACM Shanghai (688082 CH, Not rated); (2) its faster-than-industry sales growth; (3) strong cleaning and electro-chemical plating (ECP) equipment capabilities among domestic vendors; and (4) China's memory and advanced process fab capacity expansion, as well as rising demand for advanced packaging. Currently, ACMR is the No.1 domestic supplier of wafer-cleaning equipment in China (~30% market share in China, by our estimate) and global No.4 in cleaning (~8% share, according to Gartner);