The rating on Hon Hai Precision Industry Co. Ltd. (Hon Hai) reflects the company's strong competitive position in the global electronics manufacturing services (EMS) industry, its low cost, unrivalled vertically integrated production model, and its consistently robust return on capital and low debt leverage. The rating is somewhat constrained by the high business risks associated with the global contract EMS industry. Hon Hai is the world's largest EMS provider. The company has built an entrenched market position over the years by expanding its vertically integrated production model and strengthening its component manufacturing capabilities. As a result, it has established a strong customer base with major global players in a wide range of electronics products, and this offsets the risk of
