Rising LeverageAn increasing debt-to-equity trend raises fixed interest obligations and reduces financial flexibility. Higher leverage makes the business more vulnerable to demand downturns or input-cost shocks, constrains strategic choices, and can increase refinancing or covenant risk over the medium term.
Negative Free Cash Flow From High CapexSustained negative free cash flow driven by heavy capex consumes internal resources and forces reliance on external financing. Until capex translates into higher returns or operating cash, this structural cash drain limits ability to reduce leverage, pay dividends, or fund growth without raising additional capital.
Volatile Profitability / Inconsistent ROEFluctuating net margins and inconsistent return on equity reflect earnings sensitivity to product mix, input costs, and possibly pricing cycles. This volatility complicates long-term planning, undermines predictable cash returns, and raises execution risk for sustaining investments or shareholder payouts.