Mdevice: Operating Profit Up in Q1 2026, but Net Loss Due to Derivative Valuation Loss

Sales: KRW 20.46 billion (slight increase from prior quarter KRW 20.08 billion)
Operating profit: KRW 3.15 billion, maintaining profitability (estimated increase vs prior quarter)
Consolidated net loss: KRW 8.19 billion (vs net profit of KRW 1.77 billion in same period last year) due to derivative valuation loss of KRW 19.73 billion (related to 8th convertible bonds)
Operating cash flow: inflow of KRW 14.77 billion (vs outflow of KRW 4.47 billion in prior year) – significant improvement
Cash and cash equivalents: KRW 23.64 billion (up from KRW 10.27 billion at end of prior year)
Inventories decreased to KRW 32.36 billion; trade receivables also decreased
Debt ratio: 173% (total liabilities KRW 68.93 billion, equity KRW 39.82 billion)
Dependency on major customer (China H) at 81.33% (improved from 93.19% in prior year)
Derivative liabilities related to 8th CB: KRW 43.89 billion (conversion and early redemption options) – risk of valuation loss due to stock price fluctuations
Credit rating: BB+ (stable, from eCredible)
HBM manufacturing patent registered; developing Gen6 SSD and CXL 2.0
No dividends or share buyback/cancellation

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