Weisaber: the leader of membrane separation technology in China. The company was established in 2001, the main products include composite pressure tanks, membrane components pressure vessels, reverse osmosis membrane and membrane components and nanofiltration membrane and membrane elements, in the upper reaches of the membrane separation technology industry chain, mainly used in material concentration and separation, traditional water treatment fields. Since 2019, the company has entered the field of lithium extraction from salt lake by enlightening Qingyuan to carry out business cooperation.

In 2021, the company achieved revenue of 379 million yuan, an increase of 20.92% over the same period last year, and a net profit of 50 million yuan, an increase of 7.96% over the same period last year.

The supply and demand of lithium resources industry is booming, the technology of extracting lithium from salt lake may evolve to membrane separation, and the market demand of nanofiltration membrane and reverse osmosis membrane is broad. The application of lithium electricity leads to the increase of demand, and the prosperous trend of supply and demand of lithium resources is expected to continue. Domestic salt lake lithium resources account for more than 80%, which is the main source of metal lithium extraction. The membrane salt lake lithium extraction process with wide applicability and low cost is expected to be popular. At present, the membrane materials such as nanofiltration membrane and reverse osmosis membrane used in salt lake mainly rely on imports, and most of the imported membrane materials are standardized products, and the resource endowments of different salt lakes are different. among them, the salt lake in Tibet has high lithium ion concentration and relatively low magnesium-lithium ratio, but it is difficult to exploit under poor environmental conditions. Compared with overseas manufacturers, local enterprises are close to the downstream market, convenient for research and development, and have more regional advantages; in the future, local enterprises that make customized development of membrane materials according to the characteristics of domestic salt lakes are expected to fully benefit. It is estimated that the annual output of lithium extraction from salt lake is expected to increase from 53000 tons to 250000 tons, and the market demand for nanofiltration membrane and reverse osmosis membrane is broad.

Under the development trend of sewage resources, the membrane industry is growing steadily, and local enterprises are expected to be replaced by domestic enterprises. The demand for water resources continues to rise, driving the development of sewage resource treatment, and the demand for membrane materials is expected to continue to increase.

According to the statistics of the China membrane Industry Association, the total output value of China's membrane industry is expected to increase from 277.3 billion yuan to 360 billion yuan from 2019 to 2022, with an average annual compound growth rate of 9%. Among them, in the fields of human settlement water treatment, sewage treatment, municipal water supply and seawater desalination, only the market scale of cyber products is expected to grow, with CAGR of about 11% to 15% from 2022 to 2025.

The core product technology is leading in the industry, and the membrane lithium extraction process is expected to open the second growth curve. The company's core technologies are all self-developed, the key parameters of the company's products are industry-leading, and have obtained authoritative qualification certification. In the field of traditional water treatment, the company has long cooperated with leading customers such as Besch, Suez, Conligan and Clark Group, which has gradually eroded the overseas product market. According to the statistics of the China membrane Industry Association, the company has a market share of 3% in the field of 8-inch reverse osmosis membrane in 2019, ranking second among local enterprises, and 20.61% in the field of membrane components and pressure vessels, ranking second in the domestic market.

In the field of membrane lithium extraction, the company has directed the development of low temperature pretreatment nanofiltration membrane and membrane system for Tibet Salt Lake. The membrane system covers the whole business of the membrane end of the salt lake lithium extraction process. At present, it has entered the pilot stage and is expected to realize engineering production and application in the future. We estimate that the average income of 10,000 tons of salt lake lithium extraction project is expected to reach 500 million yuan, of which the membrane end income is expected to reach 200 million yuan, and the application of membrane system is expected to become a new growth point for the company's performance; in addition, only Seiber develops the technology of extracting lithium from ores and batteries, and the technology of extracting lithium by membrane may become the company's second growth curve.

Profit forecast and rating: only Cyber is one of the few domestic enterprises that simultaneously carry out research and development of three major types of products and large-scale production, and has developed low-temperature pretreatment nanofiltration membrane and membrane system equipment in the field of membrane lithium extraction. In the future, the salt lake lithium extraction technology is expected to evolve to the membrane process; at the same time, the traditional water treatment field will develop to the trend of sewage resources, but Saber is expected to fully benefit. We estimate that the company's return net profit from 2022 to 2024 is 0.52 RMB 1.18 / 160 million respectively, corresponding to 160 million times the PE from 2022 to 2024, maintaining the "overweight" rating.

Risk hints: the progress of research and development is lower than expected, the epidemic situation of COVID-19 is repeated, the expansion of the lower reaches of the industrial chain is not as expected, the risk of unstable company performance, the uncertainty of domestic substitution process, the uncertainty of technological progress, the competition between membrane separation technology and other water treatment technology routes intensifies, the company's nanofiltration membrane and membrane system technology is still in the pilot stage, there is a certain degree of uncertainty in the future, and the measurement is subjective for reference only.