Investment Returns - The total return on the Fund's net asset value for the first half of 2025 was 2.3%, with dividends and capital gains reinvested [1] - The S&P Energy Sector and the S&P 500 Materials Sector had returns of 0.8% and 6.0%, respectively, while the benchmark (S&P 500 Energy Sector 80% and S&P 500 Materials Sector 20%) returned 1.8% [1] - The total return on the Fund's market price for the same period was 3.1% [1] Annualized Comparative Returns - For the 1-year period, the Fund's net asset value (NAV) decreased by 2.2%, while the market price increased by 1.7% [4] - Over 3 years, the NAV returned 10.7% and the market price returned 12.3% [4] - The 5-year returns were 21.2% for NAV and 22.1% for market price, while the 10-year returns were 6.1% for NAV and 6.8% for market price [4] Net Asset Value - As of June 30, 2025, the Fund's net assets were $634.74 million, down from $689.99 million a year earlier [6] - The number of shares outstanding increased to 26,888,697 from 25,453,641 [6] - The net asset value per share decreased to $23.61 from $27.11 [6] Largest Equity Portfolio Holdings - The top ten equity holdings accounted for 62.9% of net assets, with Exxon Mobil Corporation at 22.7% and Chevron Corporation at 11.5% [7] - Other significant holdings included ConocoPhilips (5.3%), Linde plc (4.7%), and EOG Resources, Inc. (3.8%) [7] Industry Weightings - The Fund's net assets were allocated primarily to the energy sector, with Integrated Oil & Gas at 35.1% and Exploration & Production at 19.8% [9] - Other allocations included Storage & Transportation (11.6%), Chemicals (13.6%), and Metals & Mining (3.6%) [10]

Group 1 - Seven German Fortune 500 companies, including BMW, Allianz, Siemens, and Linde Gas, participated in the China (Sichuan) - Bavaria Economic and Cultural Cooperation Exchange Conference held in Munich, Germany [1] - A total of 33 signed projects were reached, with a cumulative amount exceeding 9.082 billion yuan, including six key projects signed on-site [1][2] - The signed projects cover various fields such as goods trade, service trade, industrial investment, cultural tourism, and traditional Chinese medicine [1][2] Group 2 - The Chengdu High-tech Zone Management Committee signed an industrial gas investment cooperation agreement with Germany's Messer Group, which will provide purification and supply equipment for BOE's production line, supporting the development of Sichuan's electronic information industry [2] - Sichuan Runzhao Food Co., Ltd. reached a cooperation agreement with Germany's N25 Caviar Trading Company to promote Sichuan Runzhao's caviar products in high-end consumption scenarios in Europe, leveraging N25's established sales network [2] - In the first five months of this year, the trade import and export volume between Sichuan and Germany reached 10.42 billion yuan, with a year-on-year growth rate of 10.1%, making Germany an important trade partner and investment source for Sichuan in the EU [2]

Group 1 - Linde plc has entered a long-term agreement to supply industrial gases to Blue Point Number One, a joint venture for a low-carbon ammonia plant in Louisiana, which will produce 1.4 million metric tons of low-carbon ammonia annually [1][5] - Linde will invest over $400 million to build and operate a new air separation unit (ASU) for the Blue Point project, expected to be the largest along the Mississippi River corridor, with operations starting in 2029 [2][8] - The new ASU will be Linde's third advanced unit supporting an autothermal reforming ammonia plant, enhancing its industrial gas network in a region with increasing demand for decarbonization and clean energy [3] Group 2 - Stakeholders, including CF Industries' COO, emphasize Linde's critical role in establishing a reliable low-carbon ammonia supply chain, highlighting its expertise [4] - The Blue Point ammonia facility is positioned to significantly contribute to the global demand for clean ammonia, which is essential for decarbonizing energy and industrial sectors [5]

Group 1: Overview of Overseas Business in US Stocks - Approximately 30% of revenue for S&P 500 companies comes from overseas, while small companies (represented by Russell 2000) have about 20%[2] - Technology (51%), materials (38%), healthcare (35%), and communications (34%) have the highest exposure to overseas business[2] - S&P 500 companies generally have a higher overseas revenue share and profit margins compared to domestic operations, with Apple having 57% of its revenue from overseas and a profit margin of 42%[2] Group 2: Industry-Specific Insights - The technology sector has the largest overseas revenue share, exceeding 50%, while materials, healthcare, and communications also show significant overseas revenue contributions[4] - Major companies in the technology sector, such as Apple (57%) and Nvidia (56%), have overseas revenue shares above the industry average of 51%[5] - In the communications sector, companies like Alphabet (46%) and Meta (56%) also exceed the industry average of 34% for overseas revenue[5] Group 3: Growth and Profitability Trends - Non-US revenue growth for S&P 500 companies is generally higher than total revenue growth, indicating a reliance on overseas markets[10] - The communications sector shows the highest growth in overseas revenue, consistently outpacing total revenue growth since 2017[10] - Profit margins for overseas operations in certain sectors, such as consumer staples and technology, are higher than domestic margins, with an average overseas profit margin of 33% for technology[11] Group 4: China Market Dependency - Among S&P 500 companies disclosing Chinese revenue, technology and communications sectors have a higher dependency, with 25% of their revenue coming from China, above the overall average of 17%[4] - Recent trends show that revenue growth from China for these sectors has slowed compared to overall growth, potentially due to US restrictions on technology exports to China[4]

Core Insights - Linde (NASDAQ: LIN) is a global leader in the industrial gases sector, showcasing resilience amid challenging macroeconomic conditions such as tariffs and inflation [1]. Company Performance - The company has demonstrated strength against current macroeconomic trends that have negatively impacted many other firms [1]. Investment Strategy - The focus is on identifying sustainable growth stocks across various sectors, emphasizing valuation, management quality, and macroeconomic trends [1].

Core Viewpoint - Linde plc is expected to benefit from the construction of new manufacturing facilities in the U.S., particularly due to the impact of TSMC's Phoenix facility, leading to a positive outlook for the company's business growth [1]. Company Analysis - Linde plc has been reiterated with a Buy rating, indicating confidence in its growth potential and market position [1]. - The company is positioned well in niche markets, which are anticipated to experience strong growth [1]. Investment Strategy - The investment approach focuses on fundamental, bottom-up analysis with a long-term perspective, emphasizing quality growth-oriented companies [1]. - A target of achieving a 15% annual return is set, with a diversified portfolio of 15-20 stocks to manage risk effectively [1].

Core Insights - Linde plc reported first-quarter 2025 adjusted EPS of $3.95, exceeding the Zacks Consensus Estimate of $3.93 and improving from $3.75 in the previous year [1] - Total quarterly revenues were $8,112 million, slightly below the Zacks Consensus Estimate of $8,258 million, but up from $8,100 million year-over-year [1] - The strong earnings were driven by higher pricing and increased volumes in the Americas segment, though partially offset by lower contributions from the EMEA segment due to reduced volumes in certain end markets [1] Segmental Highlights - The Americas segment's operating profit rose 4.5% to $1,137 million, although it fell short of the Zacks Consensus Estimate of $1,160 million, supported by higher pricing and volume increases in electronics and chemicals & energy [2] - EMEA segment profit increased approximately 5.1% year-over-year to $722 million, surpassing the Zacks Consensus Estimate of $709 million, aided by higher pricing despite lower volumes in metals & mining and chemicals & energy [3] - The APAC segment's profit grew from $447 million to $451 million, meeting the Zacks Consensus Estimate, with stable pricing contributing to this growth [3] - Operating profit in the Engineering segment increased to $114 million from $100 million, exceeding the Zacks Consensus Estimate of $96 million [4] Backlogs - At the end of the first quarter, Linde's project backlog was $10.3 billion, including a sale-of-gas backlog of $7 billion [5] Capital Investment & Balance Sheet - Linde reported capital expenditures of $1.27 billion for the first quarter, with cash and cash equivalents of $5.29 billion and long-term debt of $17.6 billion [6] Guidance - For Q2 2025, Linde estimates adjusted EPS to be between $3.95 and $4.05, and for the full year 2025, adjusted EPS is expected to range from $16.20 to $16.50 [7] - The company reiterated its full-year capital expenditure guidance of $5 billion to $5.5 billion [7]

Core Insights - Linde reported $8.11 billion in revenue for Q1 2025, a year-over-year increase of 0.2%, with an EPS of $3.95 compared to $3.75 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $8.26 billion by 1.77%, while the EPS exceeded the consensus estimate of $3.93 by 0.51% [1] Financial Performance - Revenue by region: - Americas: $3.67 billion, a 3% increase year-over-year, below the average estimate of $3.73 billion [4] - EMEA: $2.03 billion, a 2.9% decrease year-over-year, below the average estimate of $2.14 billion [4] - Other: $311 million, a 2.5% decrease year-over-year, below the average estimate of $319.40 million [4] - Engineering: $565 million, a 4.8% increase year-over-year, slightly below the average estimate of $571.95 million [4] - APAC: $1.54 billion, a 3.3% decrease year-over-year, below the average estimate of $1.57 billion [4] Stock Performance - Linde's shares have returned -3.5% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - For Q1 2025, Linde's sales were $8,112 million, flat compared to Q1 2024, with a 2% increase from higher price attainment and a 1% increase from acquisitions [103]. - Adjusted operating profit for Q1 2025 was $2,438 million, a 4% increase from Q1 2024, driven by higher pricing and productivity initiatives [106]. - Reported net income for Linde plc increased by $46 million, or 3%, in Q1 2025 compared to Q1 2024, driven by higher operating profit [123]. - Diluted earnings per share rose to $3.51 in Q1 2025, a 5% increase from $3.35 in Q1 2024, attributed to higher net income and lower diluted shares outstanding [124]. - EBITDA for Q1 2025 was $3,132 million, up from $3,092 million in Q1 2024, reflecting higher operating profit [126]. - Reported operating profit for Q1 2025 was $2,184 million, a 4% increase from $2,095 million in Q1 2024 [163]. - Adjusted net income for Q1 2025 was $1,880 million, compared to $1,821 million in Q1 2024, reflecting a 3% increase [164]. - Adjusted diluted EPS for Q1 2025 was $3.95, up from $3.75 in Q1 2024, representing a 5% increase [165]. - EBITDA for Q1 2025 was $3,132 million, with an adjusted EBITDA of $3,213 million, reflecting 39.6% of sales [165]. Expenses and Cost Management - Selling, general and administrative expenses decreased by $74 million, or 9%, in Q1 2025, representing 9.7% of sales compared to 10.6% in Q1 2024 [111]. - Cost of sales, exclusive of depreciation and amortization, decreased by $59 million, or 1%, for Q1 2025, with costs representing 51.2% of sales [110]. - The number of employees decreased to 65,069 in Q1 2025, down by 1,126 from the previous year, primarily due to ongoing cost reduction programs [125]. Taxation - The effective tax rate for Q1 2025 was 23.4%, up from 22.3% in Q1 2024, primarily due to lower tax benefits from share-based compensation [105]. Cash Flow and Investments - Net cash provided by operating activities for the first quarter was $2,161 million, compared to $1,954 million in 2024 [152]. - Capital expenditures for the first quarter were $1,270 million, an increase from $1,048 million in 2024 [152]. - Cash provided by operations for Q1 2025 was $2,161 million, an increase of $207 million or 11% compared to Q1 2024 [153]. - Net cash used for investing activities was $1,369 million in Q1 2025, up $328 million from the previous year, primarily due to higher capital expenditures of $1,270 million [154]. - The company reported a net cash decrease from financing activities of $388 million, an improvement from a decrease of $668 million in 2024 [152]. - Cash used for financing activities decreased to $388 million in Q1 2025 from $668 million in Q1 2024, with cash provided by debt increasing to $1,493 million [157]. Segment Performance - The Americas segment reported sales of $3,666 million, up 3% from $3,560 million in 2024, with operating profit increasing by 5% to $1,137 million [131][132]. - EMEA segment sales decreased by 3% to $2,031 million, while operating profit increased by 5% to $722 million, driven by higher pricing [134][138]. - APAC segment sales fell by 3% to $1,539 million, with operating profit increasing by 1% to $451 million, primarily due to productivity initiatives [139][142]. - Engineering segment sales rose by 5% to $565 million, with operating profit increasing by 14% to $114 million, attributed to project timing [143][145]. - Other segment sales decreased by 3% to $311 million, with operating profit declining by 26% to $14 million, impacted by higher helium costs [146][149]. Comprehensive Income and Backlog - Other comprehensive income for Q1 2025 was $131 million, mainly from currency translation adjustments of $134 million [128]. - As of March 31, 2025, Linde's gas backlog for large projects under construction was approximately $7.0 billion [155]. - Acquisitions net of cash acquired totaled $112 million in Q1 2025, mainly in the Americas and APAC regions [156]. Balance Sheet Highlights - Current assets increased to $8,561 million at the end of March 2025, up from $7,827 million at the end of December 2024 [181]. - Long-term liabilities rose to $68,980 million at the end of March 2025, compared to $64,848 million at the end of December 2024 [181]. - The amount due from non-guarantor subsidiaries in current assets was $4,542 million as of March 31, 2025 [181]. - The amount due to non-guarantor subsidiaries in current liabilities was $1,888 million as of March 31, 2025 [181]. - Transactions with non-guarantor subsidiaries amounted to $833 million for the three months ended March 31, 2025, and $7,177 million for the twelve months ended December 31, 2024 [181]. Future Outlook - The company is expected to provide further discussions on market risk in its 2024 Annual Report on Form 10-K [182].

Financial Data and Key Metrics Changes - Earnings per share (EPS) increased by 5% year-over-year to $3.95, or 8% when excluding currency translation effects [17][22] - Operating profit rose by 4% to $2,400 million, resulting in an operating margin of 30.1%, which is 120 basis points higher than the previous year [17][22] - Sales remained flat at $8,100 million compared to the prior year, with a sequential decline of 2% [15][22] Business Line Data and Key Metrics Changes - In the Americas, packaged gases experienced weakness due to manufacturing uncertainty, while bulk volumes grew low to mid-single digits [12][22] - EMEA showed robust margin performance despite lower industrial activity, with margins improving due to management actions and pricing [34][62] - APAC saw stable trends in battery and electronics, but lower prices for rare gases and helium impacted overall performance [9][10] Market Data and Key Metrics Changes - The Americas segment had the highest price increase at 3%, reflecting inflationary pressures [12][22] - Industrial activity remains sluggish across most geographies, particularly in the U.S. and Western Europe, with expectations of continued softness in demand [71][72] - India is highlighted as a growth region, with ongoing investments and volume growth anticipated [73] Company Strategy and Development Direction - The company emphasizes a defensive operating model that has proven resilient during economic uncertainty, focusing on stable end markets such as healthcare and electronics [6][8] - Management is committed to maintaining a strong backlog of $10 billion, with over $7 billion in gas project sales under long-term contracts [13][22] - The company is actively pursuing clean energy projects, with expectations of $8 billion to $10 billion in opportunities over the next few years [39][40] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued volatility in end market trends due to global trade policy changes, but expresses confidence in navigating uncertainty [14][24] - The outlook for 2025 includes cautious guidance, with EPS expected to grow by 3% to 5%, factoring in recessionary conditions [22][23] - Management remains optimistic about long-term growth driven by secular trends in electronics and emerging markets like India [111] Other Important Information - The company raised its annual dividend by 8%, marking 32 consecutive years of dividend growth [21] - Capital expenditures (CapEx) for the quarter were $1,300 million, with a significant portion allocated to project backlog [18][20] Q&A Session Summary Question: Impact of Dow's Alberta project delay on Linde - Management confirmed that contractual protections are in place for delays, and they will work with Dow to explore alternatives while safeguarding Linde's interests [29][30] Question: EMEA margin performance and future expectations - Management indicated that EMEA margins are a result of consistent management actions and expect margins to grow as volumes improve [34] Question: Clean energy market opportunities - Management remains confident in the $50 billion clean energy opportunity, with a focus on low carbon hydrogen projects and a projected $8 billion to $10 billion in the near term [39][40] Question: Guidance on FX impact and manufacturing demand - Management noted that the FX headwind was primarily felt in the Americas, with manufacturing demand showing weakness in sectors like automotive and agriculture [47][54] Question: SG&A expense reduction - Management attributed the 9% reduction in SG&A to restructuring efforts and lower incentive compensation due to performance [80][87] Question: Drivers of operating margin improvement - Management highlighted that productivity and pricing actions contributed to the 120 basis point margin improvement, with ongoing initiatives to enhance efficiency [92][96]