ACM Research posts 36% revenue growth but faces margin and cash flow challenges

ACM Research reported a 36% increase in Q2 revenue to $292.9 million, driven by growth in advanced packaging and ECP technologies, which helped diversify its customer base. Despite maintaining a gross margin of 46%, the company faces operational risks including inventory buildup and negative operating cash flow, indicating execution challenges. The current Hold rating reflects the need for ACM Research to achieve consistent mid-40% margins, better cash conversion, and reduced inventory risk before improving its outlook.