Even the stock market is weathering this Monday. While record heat is expected in France and Great Britain, the air conditioners are at full blast, with the result rise in energy prices: the Brent barrel regained 3%, gas – 4% in Rotterdam. Thermal power plants need energy to produce electricity. In general, oil and gas stocks stand out, and US President Joe Biden left the Middle East this weekend without taking with him any promises from Saudi Arabia to increase production of the black gold to lower prices. The European Stoxx index, on which the largest oil and gas companies of the Old Continent are listed, rose by 3%. TotalEnergies wins 2.5% in Paris, signing one of the best results in the Cac 40.
And on SRD, GTT outperformed with a jump of more than 6% to over €124, very close to its highs at the end of May, also supported by a buy recommendation from Societe Generale. The bank’s analytical division more than confirms its very favorable opinion on this French company, a key player in the LNG market, by significantly raising the target price (+50%): from 115 to 172 euros. In other words, Societe Generale sees GTT reaching new highs, surpassing the May 30 session gains (€133.9). The company becomes Societe Generale’s new favorite in the oil and gas services business, replacing Technip Energies.
To get rid of Russian gas, Europe is importing more and more liquefied natural gas (LNG). It is transported by LNG carriers, which, for all newly built ones, are equipped with GTT cryogenic membranes. For transportation by sea, the gas must be liquefied by extreme cooling (-160°); this is where GTT comes to the rescue. The Ile-de-France company equips LNG carriers built in South Korean and Chinese shipyards with cryogenic membranes to maintain very low temperatures. Its technology is so superior that it killed the competition. Today, GTT holds 100% of the market for LNG tankers and floating terminals (LNG tankers moored on the coast and connected to the distribution network). “This is not a monopoly situation, as there are competitors, but the latter do not sign no contracts GTT CEO Philippe Berterottier recently explained to us.
“Extremely strong” visibility
95% of GTT’s turnover is in Asia, which is not surprising since the Ile-de-France company, based in Saint-Rémy-les-Chevres, has a partnership with South Korea’s Hyundai Samho Heavy Industries, the world’s largest shipbuilder. world. GTT also cooperates with DSME, another Korean and Chinese shipyard. Its clients partly build for European shipowners working for charterers worldwide; Europeans account for approximately 60% of orders. In addition, the company announced last week that it had received a new order from Hyundai Heavy Industries to design the tanks of two new LNG carriers on behalf of a European shipowner. Delivery of the ships is scheduled for the second quarter of 2025.
Orders, which were very numerous in the first half of the year, will bring income only from 2024. Societe Generale talks about visibility after 2025 and even after 2030, “extremely strong”. For banking analysts, GTT is going to know “strongest and longest period of growth” its history. Societe Generale expects average annual revenue growth of 21.5% between 2021 and 2025, and an average increase in EBITDA of 24.3% each year, well above the figures recorded in the period 2014-2020.
In addition to equipping the hulls of LNG carriers with cryogenic membranesFor LNG transportation, GTT is also involved in floating regasification platform projects (approximately 10% of revenue).