Shouldering the mission of localizing ceramic membranes and building a leading domestic membrane integration technology platform. The development of ceramic films in China started late and was monopolized by European and American companies for a long time. The “Ninth Five-Year Plan” scientific research project in the 90s successfully achieved breakthroughs. The technical team led by Academicians Xu Nanping and Shi Jun co-founded the company's predecessor to shoulder the historical mission of industrializing ceramic films. After more than 20 years of intensive cultivation, the company has developed into a leading integrated membrane technology solution provider in China. Its products cover ceramic films, organic films, lithium adsorbents and downstream systems, undertake national “973” and “863” projects, and is the setter of many domestic ceramic film standards. The company is a pioneer in high-end applications of membrane separation, achieving the first domestic project application in various fields such as full-membrane salt lake lithium extraction, and will continue to expand into high-value-added membrane separation applications in the future.
The market space for ceramic membranes is vast, and domestic and international demand for seawater desalination resonates in the context of the “Belt and Road”. High-performance membrane materials are an emerging industry with a national key development strategy. The total value of China's membrane industry is estimated to reach 500 billion yuan in 2025. Ceramic membranes have excellent mechanical properties, chemical resistance, and filtration accuracy. They were invented by Dr. Pall in Manhattan in the 40s of the last century. After more than 70 years of development, the application fields gradually moved from nuclear power, military use, aerospace to civilian fields such as semiconductors, new energy, and biomedicine. The global market size reached 6.83 billion US dollars in 2023. Water resources are scarce in the Middle East, and the total expenditure on seawater desalination projects planned or already underway in 2023 is as high as 39.3 billion US dollars. The future is expected to usher in a long-term period of rapid expansion. Traditional thermal seawater desalination consumes about 5 kWh per cubic meter, while the membrane method consumes only 2.5-3 kWh. In the context of the “Belt and Road”, it is expected that membrane replacement thermal methods will continue to open up demand space for domestic separation membrane exports.
Drawing on the development history of giant PALL, we focus on high-end application scenarios for membrane separation. Founded in 1946 by Dr. Pall, the inventor of ceramic membranes, PALL is now a global leader in filtration solutions, with revenue of US$2.79 billion in 2014. Domestic separation membrane products are mainly concentrated in the downstream of low-end water treatment, and there is broad scope for high-end penetration: semiconductors: advanced processes have greatly increased requirements for cleanliness, and increased filtration demand for etching, polishing, and special gas filtration; medicine & food: ceramic membranes can be used to filter and purify antibiotics, amino acids, vaccines, alcohol, juice, and milk; new energy: downstream radiated lithium electricity, photovoltaics, wind power.
Adsorbents helped develop salt lake resources in the Tibetan region, and the order was placed to open up a second growth curve. Lithium resources are an important cornerstone for ensuring the stable development of China's new energy industry chain. Currently, “adsorption+film” has become the leading route for lithium extraction processes in domestic salt lakes, and is more suitable for high-magnesium-lithium ratio salt lakes in China. Highly selective, low-loss adsorbents are the core link for efficient and low-cost operation of production lines. The company began research and development of lithium extraction technology in salt lakes in 2013. The company has also mastered the production process of aluminum and titanium adsorbents, which can fully cover the domestic resources of carbonic acid and Qinghai sulfuric acid salt lakes, and has built an adsorbent production capacity of 6,000 tons. In 2023, the company's salt lake lithium extraction project orders were implemented centrally, and the contract amount exceeded 700 million yuan, which is expected to bring new performance growth points.
Profit forecasting and valuation recommendations. We expect the company's revenue for 2023-2025 to be 690/11.46/1,643 billion yuan, respectively; net profit to mother 0.39/1.99/287 million yuan; corresponding PE is 87.6/17.1/11.9 times, respectively. First coverage, giving a “buy” rating.
Risk warning: Product prices fall short of expectations, project construction progress falls short of expectations, and calculation errors.