Electronics manufacturing services company Hon Hai has enhanced its profitability, free operating cash flow, and balance sheet, despite significant competitive pressure on margins. The Taiwan-based company's free operating cash flow could provide sufficient headroom for capital expenditures and acquisitions while still maintaining a significant net cash position if Hon Hai can withstand competitive pressure, sustain its profitability, and limit acquisitions. We are therefore revising our outlook on Hon Hai to positive from stable to reflect our view that the company can further strengthen its balance sheet to withstand risks from competition and product and customer concentration. We are affirming our 'A-' issuer credit rating on Hon Hai as well as the 'A-' issue rating on the senior notes that Hon
