Capex Pressures On Free Cash FlowNegative FCF growth driven by expansion capex reduces near-term distributable cash and raises execution risk if investments underperform. Over the next several quarters, elevated capex can limit flexibility for dividends, buybacks, or deleveraging until new capacity conversion materializes.
Customer Concentration RiskHeavy reliance on a few OEM programs concentrates volume and pricing risk: platform cancellations, order timing shifts, or tougher supplier negotiations could materially affect revenue. This structural dependence constrains predictability of medium-term cash flows and margins.
Suboptimal Asset UtilizationLower-than-ideal asset turnover suggests capacity or working capital inefficiencies that can cap scalable margin expansion. Without productivity or mix improvement, incremental sales may not translate proportionally into higher ROE, limiting durable earnings leverage from recent investments.