Industrial Gases

Huate Gas is a leading Chinese domestic-substitution player in electronic specialty gases, supplying high-purity specialty gases and gas equipment for semiconductor and display manufacturing. The core thesis is that the company benefits from domestic substitution and fab/display capacity expansion, but 2025 revenue rose only 1.7%, net profit attributable to shareholders fell about 27% to RMB 135 million, the static P/E is about 163x, and margins plus capital returns are being eroded by price competition, capacity ramp-up, and depreciation. Report rating Watch: a capable domestic substitute in a promising niche, but the current valuation leaves little room for owner-oriented returns.

Air Liquide is one of the global leaders in industrial and medical gases, serving 4.3 million customers and patients across 59 countries, with oxygen, nitrogen, hydrogen, electronics specialty gases, and medical gases deeply embedded in customer production processes. In 2025, revenue reached EUR 26.94 billion, operating cash flow was EUR 6.52 billion, recurring ROCE stayed solid at 11.2%, and net debt continued to fall over five years to EUR 8.42 billion. Rating Watch: a classic infrastructure, consumables, and long-term service contract compounder with strong contract stickiness and a deep moat, yet the current share price of about EUR 183 implies roughly 30x P/E and already reflects much of its quality, leaving insufficient margin of safety.