Chart(US:GTLS) Haitong Securities International·2025-07-30 12:47Investment Rating - The report assigns a rating of "Outperform" for Chart Industries, indicating an expected total return over the next 12-18 months that exceeds the relevant market benchmark by more than 10% [12]. Core Insights - Baker Hughes has proposed to acquire Chart Industries for $210 per share, totaling an enterprise value of $13.6 billion, and has terminated its merger agreement with Flowserve [2][3]. - Chart Industries reported adjusted net income of $76 million for Q2 2025, which was below market expectations of $108 million, with revenues of $1.082 billion, also falling short of the $1.103 billion consensus [2][5]. - The company has a record backlog of $5.536 billion, up from $5.14 billion in Q1 2025 and $4.85 billion in Q4 2024, with total orders for the quarter amounting to $1.5 billion [3]. Summary by Sections Financial Performance - Adjusted EBITDA for Q2 2025 was $245 million, below the expected $267 million, with a gross profit margin of 34% consistent with previous quarters [5]. - Free cash flow improved to $124 million compared to negative $80 million in Q1 2025 and $261 million in Q4 2024 [2][3]. Guidance and Outlook - The company has withdrawn its FY2025 guidance due to the proposed merger with Baker Hughes, which previously projected revenues of $4.65 billion to $4.85 billion and adjusted EBITDA of $1.175 billion to $1.225 billion [3]. - The net leverage ratio decreased to 2.85 times, down from 2.91 times in Q1 2025, with a target leverage ratio of 2.0 to 2.5 times [3].