YB new stock pitches (Mon, Dec 22)

Tasmea Limited (TEA.AX), an Australian specialized maintenance roll-up trading at A$4.09 with a A$1.09B market cap, is significantly undervalued at 13x forward earnings despite delivering 35%+ CAGR revenue, EBIT, and earnings growth with 95% recurring revenues. The company operates 26 specialized service businesses across electrical, mechanical, civil, water, and workforce recruitment, focusing on essential shutdown services and maintenance for blue-chip clients in remote locations with high barriers to entry. Their twin-pillar growth strategy combines organic growth and disciplined acquisitions, recently acquiring Workpac Group for A$60M (including A$27.5M in shares at A$5.50), which increased FY2026 EPS guidance from A$0.295 to A$0.328 despite minor dilution. Secular tailwinds include Australia's electrification mandate for net-zero emissions by 2050, robust iron ore demand from China and India, and aging mining infrastructure requiring increased maintenance. Management owns over 60% of shares with CEO Stephen Young and co-founders Mark Vartuli and Jason Pryde heavily reinvesting dividends back into the business, while Pryde's option incentives target A$160M EBIT by 2029. Key risks include commodity downturns affecting mining clients, potential China-Taiwan conflict disrupting Australian exports, and integration challenges from acquisitions, though the company maintains diversification across 30+ customers and a conservative 2.25x debt-to-EBIT leverage ratio. The stock declined from A$5.20 to current levels following the Workpac acquisition announcement due to dilution concerns, creating an attractive entry point with a one-year price target of A$7.80 representing 80% upside based on 25x earnings multiple applied to projected 50% earnings growth.

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ACM Research (ACMR), a semiconductor cleaning equipment company trading at $39.48 with a 32x P/E ratio, is benefiting from US sanctions that have banned competitors like Lam Research and Screen Holdings from selling to China, creating a state-sponsored monopoly for ACMR in the Chinese market. The company specializes in single-wafer wet cleaning equipment using proprietary SAPS and TEBO technologies critical for advanced AI chips and 3D NAND memory, serving key customers like SK Hynix and YMTC. Revenue is growing 30-40% CAGR as Chinese fabs replace banned Western equipment through 'domestic substitution,' with sales to blacklisted SMIC growing from $19M in 2020 to over $93M recently. At a 0.9 PEG ratio based on 35% growth, management targets $1B revenue near-term and $3B long-term, with gross margins of 40-50% and a net cash position. Price targets include $80-90 over 18-24 months, with a bull case of $160 based on hitting $3B revenue, 20% net margins generating ~$9 EPS, and a 20x multiple. The company owns 75% of ACM Shanghai (ticker: 688082) which trades at 40-50x P/E, creating a valuation arbitrage where the Shanghai stake alone has sometimes exceeded ACMR's total market cap. Key risks include potential US bans on citizens working for Chinese semiconductor companies (which would impact US citizen CEO David Wang), Chinese fab overcapacity, and historical short-seller accusations of fraud (though the company paid dividends and increased cash balances since the 2020 J Capital report).

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Gain Therapeutics (GANX), trading at $2.88 with a ~$155 million market cap and $8.8 million cash through year-end 2026, is a clinical-stage biotech developing GT-02287, an oral small-molecule therapy targeting Parkinson's disease by restoring GCase enzyme function using an AI-enabled precision drug discovery platform called Magellan™. The company's Phase 1b study (n=21) over 90 days showed 100% of participants with elevated baseline CSF GluSph demonstrated large reductions back toward healthy levels, representing the first reported reduction of this biomarker following a GCase modulator in Parkinson's patients, with the treatment being generally well-tolerated and 79% of participants continuing into the nine-month extension. The addressable market includes ~1 million US Parkinson's patients with no approved disease-modifying therapies, with GBA1-associated cases representing ~100,000 patients, and no FDA-approved therapies currently exist that directly restore GCase enzyme function. Key upcoming catalysts include full 90-day Phase 1b analysis in Q4 2025, IND submission to FDA by year-end 2025 enabling Phase 2 development, and Phase 1b extension readout in 2H 2026 providing up to 12-month data. Primary risks include early-stage biomarker data from small patient numbers that may not translate to clinical benefit at scale, potential capital constraints requiring additional funding beyond current runway for Phase 2 execution, and the inherent uncertainties of single-asset, micro-cap biotech development in the challenging CNS space.

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