Q3 Earnings Outliers in Gas and Liquid Handling Stocks: A Contrarian Opportunity in a Volatile Market?

In the third quarter of 2025, the financial markets witnessed stark divergences between sectors, with fintech and gas/liquid handling industries presenting contrasting narratives. While Futu Holdings, a Hong Kong-based fintech giant, reported explosive growth driven by crypto trading and IPO momentum, gas/liquid handling stocks like Gorman-Rupp (GRC) and Chart (GTLS) struggled with operational headwinds. This analysis explores these outliers, dissecting structural and operational factors that define their trajectories-and whether the latter presents contrarian opportunities.

Futu Holdings: A Fintech Powerhouse's Momentum

Futu Holdings' Q3 2025 earnings report underscored its dominance in the digital trading space. Total revenues surged 86.3% year-over-year to HK$6,402.9 million (US$822.9 million), fueled by a 104.8% increase in trading volume to HK$3.90 trillion and a 78.9% rise in client assets to HK$1.24 trillion. These metrics highlight the company's ability to capitalize on global market volatility and its strategic expansion into localized products, such as Bursa derivatives and AI-driven tools.

The fintech sector's resilience stems from its low marginal cost structure and network effects. Futu's funded accounts grew by 42.6% year-over-year to 3.13 million, demonstrating its capacity to scale without proportional infrastructure costs. This contrasts sharply with capital-intensive industries like gas/liquid handling, where operational challenges often constrain growth.

Gas/Liquid Handling: A Sector at a Crossroads

The gas and liquid handling sector, however, told a different story. While Phoenix Energy (PHXE.P) reported a 220% revenue surge to $189 million, driven by energy demand recovery, underperformers like Gorman-Rupp and Chart lagged. Gorman-Rupp's Q3 revenue rose only 2.8% year-on-year to $172.8 million, missing analyst expectations by 1% and triggering an 8.7% stock decline. Chart, meanwhile, posted $1.10 billion in revenue-a 3.6% increase but a 6.3% miss relative to forecasts-highlighting sector-wide struggles with supply chain bottlenecks and shifting energy policies.

The root of these challenges lies in the sector's capital intensity and exposure to macroeconomic cycles. Unlike Futu's scalable digital model, gas/liquid handling firms face high fixed costs, regulatory hurdles, and cyclical demand. For instance, Graco and Phoenix Energy's contrasting performances illustrate how firms with diversified product lines or energy transition strategies can outperform peers.

Contrasting Structural Dynamics

The divergence between Futu and gas/liquid handling stocks underscores fundamental sectoral differences. Futu's growth is driven by network effects and product localization, enabling it to capture market share in volatile environments. Its AI tools and expanded derivatives offerings cater to a global client base, creating a flywheel effect where higher trading volumes attract more users.

Conversely, gas/liquid handling firms grapple with capital constraints and operational inflexibility. Gorman-Rupp's underperformance, for example, reflects its reliance on niche industrial markets and its inability to pivot quickly to emerging trends like green hydrogen or carbon capture. Chart's struggles further emphasize the sector's vulnerability to supply chain disruptions and regulatory shifts.

Contrarian Opportunities: A Cautionary Lens

While Futu's momentum appears self-reinforcing, the gas/liquid handling sector's underperformance raises questions about potential contrarian opportunities. However, such opportunities are not universal. Phoenix Energy's 220% revenue growth suggests that firms adapting to energy transition trends-such as investing in renewable infrastructure or diversifying into hybrid energy solutions-can thrive. Conversely, companies like Gorman-Rupp and Chart, which lack such agility, may remain exposed to cyclical downturns.

Investors must also consider the quality of earnings. Futu's net income surged 143.9% year-over-year to HK$3,217.2 million, reflecting strong margins and operational efficiency. In contrast, Chart's adjusted EBITDA of $56.2 million masked a $97.8 million net loss due to program adjustments. This disparity highlights the importance of scrutinizing non-GAAP metrics in capital-intensive sectors.

Conclusion: Divergence as a Strategic Signal

The Q3 2025 earnings season revealed a stark divide between fintech and gas/liquid handling stocks. Futu Holdings' success stems from its ability to leverage digital infrastructure and market localization, while underperforming gas/liquid firms face structural headwinds tied to capital intensity and regulatory uncertainty. For contrarian investors, the key lies in identifying gas/liquid handling companies with adaptive strategies-such as Phoenix Energy's energy transition focus-rather than those clinging to outdated models.

As markets remain volatile, the lesson is clear: sectoral dynamics, not just earnings numbers, define long-term value creation.