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  "documentTitle": "ACM Research, Inc. (ACMR)",
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  "authorName": "Kerrisdale Capital",
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  "presentationDate": "2025-01-29 00:00:00",
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  "notes": "The slide discusses specific M&A precedents (Applied Materials/Semitool, Lam Research/SEZ, Lam Research/Novellus) to justify the acquisition thesis.",
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      "text": "There are several ways through which management can attempt to unlock value in ACMR.",
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      "text": "companies will experience explosive growth either way. Worried about touching anything China? Sentiment will turn, sooner or later, and dirt-cheap Chinese companies will be valued based on the present value of their future discounted cash flows instead of meaningless geopolitical headlines.",
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      "text": "Unlocking Value. There are several ways through which management can attempt to unlock value in ACMR. The company could sell a modest amount of its ACMS shares and fund a similarly modest dividend or share buyback at ACMR. It could pursue a more sizeable ACMS share sale and dividend the entire value of ACMR back to shareholders. It could work with a private equity firm to take private ACMR in the United States at a 100% premium to the current share price, yet still a dramatic discount to the company’s value as implied by its ACMS holding. It could pursue a “homecoming” listing and dual list its shares in Hong Kong. There are several similarly structured companies listed in Hong Kong whose operations are based in China and whose chief Chinese operating subsidiary trades publicly in China. The discounts between the HK-listed holding companies and China-listed operating companies are far smaller than the massive disparity currently between ACMR and ACMS shares.",
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      "text": "ACM Research is also an attractive acquisition target for the two larger Chinese WFE players, AMEC and Naura. The Chinese WFE market has developed an oligopolistic structure similar to that of the global industry. M&A is a logical strategy in WFE to achieve product/process breadth. There are numerous precedent transactions around ACMR’s product areas that reinforce the industrial logic: Applied Materials / Semitool, Lam Research / SEZ, and Lam Research / Novellus Systems to name a few. Chinese WFE players AMEC and Naura have market values 3-5x larger than ACMS, suggesting it is a digestible target. In our view of how a transaction would play out, the strategic acquirer would purchase ACM Shanghai at a small premium, and 82% of proceeds would go to ACMR shareholders, triggering a 5x windfall for ACMR holders overnight.",
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