Thin Net Profit MarginA net margin near 3% leaves limited room to absorb raw-material inflation, warranty or quality costs, and weakens ability to self-fund strategic investments. Persistently thin net margins can compress free cash flow and make returns sensitive to modest adverse volume or pricing shifts.
Low Return On EquityROE around 5% signals the company is generating limited profit per unit of shareholder capital. Over the medium term this can constrain shareholder value creation and reduce the appeal for new equity funding if management cannot materially lift margins or asset efficiency.
Weak Free Cash Flow ConversionAlthough free cash flow recovered, low FCF-to-net-income indicates weak cash conversion from reported profits, possibly due to working capital or capex needs. Poor conversion limits ability to reduce debt, increase dividends, or invest in new programs without external financing.