The weather is even in the stock market this Monday. While heat records are expected in France and the UK, air conditioners are running at full capacity, with the investigation rising energy prices: a barrel of Brent oil has risen in price by 3%, and gas by 4% in Rotterdam. Thermal power plants need energy to produce electricity. In general, shares of companies in the oil and gas sector stand out.
The corresponding European Stoxx index added 3%. Total Energy wins 2.5% in Paris, signing one of the best Cac 40 performances. And on the SRD, the GTT outperforms thanks to a jump of more than 6% to over 124 euros, very close to its all-time highs at the end of May, which is also confirmed by a buy recommendation from Societe Generale. The bank’s research division more than confirms the very favorable view of this French company, a key player in the LNG market, by significantly raising its target price (+50%) from 115 euros to 172 euros. In other words, Societe Generale sees the GTT reaching new heights, surpassing those reached in the May 30 session (€133.9). The company becomes Societe Generale’s new favorite in the oil and gas business, replacing Technip Energies.
To wean itself off Russian gas, Europe is importing more and more liquefied natural gas (LNG). It is transported by gas carriers, which are equipped with GTT cryogenic membranes on all newly built ones. The gas must be liquefied by extreme refrigeration (-160°) for transport by sea; This is where GTT comes to the rescue. Île-de-France equips gas carriers built in shipyards in South Korea and China with cryogenic membranes to maintain very low temperatures. Its technology is so superior that it has killed the competition. Today, GTT holds 100% of the market for gas carriers and floating terminals (gas carriers moored to shore and connected to the distribution network). “This is not a monopoly situation, since competitors exist, but the latter do not sign no contracts GTT CEO Philippe Berterottierre recently explained to us.
“Exceptionally strong” visibility
95% of GTT’s turnover is in Asia, which is not surprising since the Île-de-France-based Saint-Remy-le-Chevreuse company is partnering with South Korea’s Hyundai Samho Heavy Industries, the world’s largest shipbuilder. World. GTT also works with DSME and other Korean and Chinese shipyards. His clients build in part for European ship owners who work for charterers around the world; Europeans make up approximately 60% of orders. What’s more, the company announced last week that it had received a new order from Hyundai Heavy Industries to design tanks for two new LNG carriers on behalf of a European shipowner. Delivery of the vessels is scheduled for the second quarter of 2025.
Orders, which were very high in the first half of the year, will only generate revenue from 2024. Societe Generale talks about visibility after 2025 and even after 2030, “exceptionally strong”. For banking analysts, GTT is about to learn “the strongest and longest period of growth” its history. Societe Generale expects a CAGR of 21.5% in revenue from 2021 to 2025 and a CAGR of 24.3% in EBITDA, well above the pace recorded in the 2014-2020 period.
In addition to equipping gas carrier hulls with cryogenic membraness, for LNG transportation, GTT is also involved in floating regasification platform projects (approximately 10% of revenue).