Strong market position as the world's largest EMS provider in terms of market share. Strong operating efficiency backed by the company's unrivalled vertically integrated production model. Heightening industry risks due to increasing competition and persistent margin pressure. Increasing customer concentration. Relatively high cash balance with modest adjusted debt leverage. Strong operating cash flow. Strong liquidity. The stable outlook reflects our view that Hon Hai's strong competitive position will enable the company to maintain its profitability and cash flow protection measures with a ratio of adjusted debt to EBITDA below 1.5x over the next one to two years, despite continued margin pressures. The rating may come under pressure if Hon Hai faces increasing competition due to deteriorating cost and technology advantages
