Javier Echevarria of Invexcel Patrimonio presented his thesis on Tubacex (Spain: TUB) at Best Ideas 2026.
Thesis summary:
Tubacex is a vertically integrated provider of seamless stainless steel and special alloy tubular solutions, a premium niche that is about 13% of industry volume but a third of its value, at $8,000-15,000 per ton versus $800-1,200 for carbon steel. Javier highlights its shift from commodity manufacturer to global solutions provider: premium products are now 80% of sales, up from 30% a decade ago, and a backlog of over €1.2bn covers nearly two years of revenue.
High barriers to entry protect the niche: capital intensity and scale, metallurgical expertise, switching costs, a global footprint, and certifications that take years to obtain. The top three players, Alleima, Tubacex and Sumitomo, control about 70% of the market. Tubacex runs 25 plants, 14 service centers and two R&D centers in 30 countries. Its products are mission-critical yet average only 2% of project costs, so engineering firms prioritize quality and reliability over price.
Growth comes from rising global energy consumption and a needed recovery in oil and gas capex, still 20% below its 2014 peak although demand is 11% higher. The niche grew 4.6% a year over the last 15 years and should grow about 5% annually, helped by hydrogen and carbon capture, more complex remote wells, and chemical and petrochemical expansion in Asia-Pacific and the Middle East, the regions that lead demand and where Tubacex has built a manufacturing footprint.
Long-term deals add stability. A 2022 10-year ADNOC contract for 30,000 tons of corrosion-resistant alloy tubes reshaped the portfolio, and in November 2024 Mubadala paid $200m for 49% of the OCTG unit, which had only 18% of group sales, deleveraging the balance sheet. The Sentinel Prime connection, developed over eight years, breaks the Tenaris-Vallourec duopoly and is already licensed to ADNOC for $50m. Adjusted for working capital, with inventory pre-sold under take-or-pay agreements, Tubacex holds about €30m of net cash.
Javier believes the market wrongly treats Tubacex as an oil proxy and doubts management’s 2027 targets of over €200m EBITDA. He pushes them to 2029 and cuts sales and EBITDA by 20%, for about €65m of net profit and €160m of EBITDA. At 12x earnings or 7x EBITDA, his target is €6.2-6.4 versus €3.5 recently, about 80% upside over four years, a 16% IRR plus a 4% dividend yield; management’s targets imply over €8. Risks include macro softness and oil and gas exposure.
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