Low Net ProfitabilityA sub-2% net margin shows limited bottom-line conversion after costs, interest and tax. Persistently low profitability constrains retained earnings, weakens return on equity and leaves little cushion against commodity or demand shocks, challenging long-term capital accumulation.
Rising LeverageNear-1x debt-to-equity reflects meaningfully higher financial leverage versus prior levels. Elevated debt raises interest and refinancing risk, reducing financial flexibility to absorb cyclical auto volumes or fund program ramp-ups without additional capital or higher interest costs.
Negative Free Cash FlowNegative FCF driven by capex means operational cash is currently insufficient to cover growth investments. If capex does not yield higher returns quickly, the company may need more debt or equity, increasing dilution or leverage and pressuring credit metrics over the medium term.