Gaztransport (Euronext: GTT.PA) — the near-monopoly on global LNG shipping

GTT designs and patents the membrane tanks used to ship LNG by sea. It doesn't build ships or own shipyards — the Korean yards (Hanwha, HD KSOE, Samsung Heavy) build the tanks under licence and pay GTT a royalty per cubic metre of capacity. Basically every large LNG carrier built generates a fee, and GTT bears almost none of the cost.

Market share is \~90%+ of large membrane containment — a near-monopoly. The IP is patented and constantly refreshed, and because shipyards, classification societies and charterers all standardize on GTT-approved designs. A containment failure at sea is catastrophic, so nobody wants to be the buyer who experimented with an unproven alternative. Switching away is slow and risky, and almost nobody does.

Since GTT carries no construction cost or capital, the royalties drop through at roughly 95% gross / 67% EBITDA margins. FY2025: €803M revenue, €542M EBITDA, €414M net income, net cash, no real debt, and a return on capital that's almost silly given how little capital is employed. \~80% payout, dividend yields around 4.4% (ex-date June 17).

The catch is cyclicality. Revenue tracks LNG-carrier ordering, which is lumpy, and 2023–25 rode a Qatar + US super-cycle that's now cooling — management guided 2026 revenue down to €740–780M. The moat protects share and pricing, not the volume of orders themselves. A €1.6bn backlog gives a few years' visibility, and the next reorder wave (Qatar Phase III, Venture Global, Woodside) could reaccelerate things around 2028, but the timing isn't in management's hands.

Worth being clear: this isn't a beaten-down stock. It's near its 52-week high, up \~27% YTD, at about 18x earnings. You're paying for the quality. And the reinvestment story is weak by design — the business generates more cash than it can redeploy, so growth depends on the external LNG cycle plus some unproven side bets (Elogen hydrogen electrolysers, shipping software) that have mostly consumed capital so far.

What would actually break it, versus just dent a year: a structural peak in LNG demand, royalty erosion as Chinese yards take share, a rival tank technology getting class approval, or management pouring money into the hydrogen unit.

Great business, fortress balance sheet, fair-to-full price.

Disclosure: I hold some GTT shares