Revenue plunges 40% but operating profit rises; inventory and debt remain burdensome

Q1 2026 sales: 40.4 billion KRW, down 39.5% YoY from 66.7 billion. CAT engine sales plummeted from 28.8B to 4.0B.
Operating profit: 1.3B KRW (vs 1.1B), net profit: 0.4B (vs 0.3B), slight improvement. Effective tax rate 33.9% (vs 64.4%).
Total assets: 249.2B, liabilities: 121.1B, equity: 128.1B. Net debt ratio 13.82% (FY end: 8.98%).
Short-term borrowings: 41.9B, cash: 21.3B. High reliance on debt.
Inventory: 105.8B (42.5% of assets), inventory valuation loss of 0.48B recognized.
Treasury shares: 2,914,991 shares (22.93%). Largest shareholder and related parties hold 19.8%.
Loan to CEO: 3.08B outstanding (interest rate 3%).
Pending lawsuits: 9 as plaintiff (0.73B), 1 as defendant (0.06B). No material impact.
R&D expense: 0.26B (14.2% of sales, up from 1.3% prior year).