Co-owners,

We've spun the wheel for the Developed Asia-Pacific bucket. One quirk worth knowing: our index, FTSE All-World, counts South Korea as a developed market, while many other providers, MSCI among them, still file it under emerging markets. 

The ticker has landed in Seoul, on a company whose products you have almost certainly touched without ever seeing its name, and which quietly holds one of the strangest positions in global business.

Before we dive in, a reminder of what the index itself has delivered over time.

Every week, we pull one company at random from the FTSE All-World with ~4,200 companies representing 90% of global stock market wealth. We share the index's long-term returns since inception in 1986 as a reminder of why we're here: the long game. New to the newsletter? Start here.

Founded in 1977 in Seoul, South Korea. Listed on the Korea Exchange (KRX: 012330).

Think about the last time you climbed into a Hyundai, a Kia or a Genesis. The dashboard in front of you. The airbags tucked into the wheel and the doors. The brakes under your foot, the headlamps, the reversing camera. There is a good chance a single company designed and built almost all of it, delivered it to the assembly line as finished modules, and will sell you the replacement parts for the next fifteen years. Almost nobody outside the industry has heard of it.

That company is Hyundai Mobis, and it describes itself as the world's fifth-largest auto-parts supplier.

A few key facts:

We'll come back to how a company this large makes almost no money on most of what it sells.

Start with the visible half. Mobis assembles the three big building blocks of a car and ships them to the factory ready to bolt in: the chassis module (suspension, brakes and steering as one unit), the cockpit module (the entire dashboard and everything behind it) and the front-end module (the nose, lighting and cooling). Around those it makes the parts that keep you alive and comfortable: airbags, the integrated electronic brake, motor-driven steering, rear-wheel steering, headlamps, and the radars and cameras that let a car brake for you and slot itself into a parking space.

Then there is the electric half. As Hyundai and Kia went electric, Mobis built the guts: the drive unit that packs motor, reducer and inverter into a single housing, the battery system assembly, and the charging control unit. It is now developing its own automotive semiconductors, steer-by-wire and brake-by-wire systems, four-wheel independent steering, even components for robots and air taxis. The engineering is genuinely advanced.

And yet.

Here is the strange part. In 2025 Mobis sold ~KRW 47.8 trillion (~$33bn) of modules and manufactured parts, the enormous visible business above, and earned an operating profit on all of it of ~KRW 76 billion. That is a margin of roughly 0.2%. Building the car is, financially, almost charity.

The profit is somewhere else entirely. Mobis also runs the after-sales parts business: the genuine replacement parts sold through 1,065 dealerships at home and more than 11,600 Hyundai and Kia dealers abroad. That business turned over ~KRW 13.3 trillion (~$9.3bn) in 2025, about a fifth of total sales, and produced ~KRW 3.3 trillion of operating profit, at a margin close to 25%.

Read that again. Around 22% of the revenue generates almost all of the profit. The 78% that actually manufactures the cars barely breaks even.

The logic is the one we met at HEICO, the aviation-parts company from a few editions ago. Assembling components for your parent at cost-plus is a thin, dull, high-volume business. But once tens of millions of Hyundai and Kia cars are on the road, the wing mirrors and brake pads and headlamps they will need for the next fifteen years all flow back through one company, at whatever price it sets. The car is the razor. The spare part is the blade.

There is a second oddity, and it is even stranger. Hyundai Mobis is the quiet keystone of the entire Hyundai empire.

The group is held together by a loop. Mobis owns around a fifth of Hyundai Motor. Hyundai Motor owns about a third of Kia. And Kia owns 18.1% of Mobis, closing the circle. Control runs round and round, which lets the founding Chung family steer a group worth well over $150bn while chairman Chung Eui-sun personally holds just 0.3% of Mobis. Whoever controls Mobis controls the loop. Buy a world index fund, and you are quietly holding the single company that keeps one of the planet's largest carmakers standing.

For all that, Mobis has been a frustrating thing to own. At the end of 2019 it was the sixth most valuable company on the Korean market. By the end of 2025 it had drifted to eighteenth. A world-class business, a stock that went nowhere, weighed down by the "Korea discount" that markets apply to the country's tangled, family-run conglomerates.

That may be turning. Under Korea's national "value-up" push, Mobis has set itself hard targets (a return on equity above 10%, shareholder returns above 30% a year), added independent directors, and started handing cash back through dividends, share buybacks and cancellations. In 2025 it returned 32.8% to shareholders, against under 20% across the whole of the prior three years.

The risks are real and worth naming. Roughly nine in ten of its core-parts sales still go to Hyundai and Kia, though it is pushing hard to win outsiders, with non-group orders of ~$9bn in 2025. Nearly a third of revenue now comes from the Americas, which turned last year's US tariffs into a direct hit on profit. And its electric-parts sales are actually shrinking as the global EV boom cools.

Most of the companies we meet here hide in plain sight. Hyundai Mobis hides twice over: once inside the dashboard of a car you have been in, and once inside the ownership diagram of a company you have heard of. If you own a global or an Asian index fund, both are already yours: a slice of the parts that keep millions of cars running, and a slice of the strange little loop that holds Hyundai together.

Data and images sourced from the Hyundai Mobis 2025 Annual Report and the Hyundai Mobis 2026 Company Presentation. Share data as of mid July 2026.

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Next week, we'll be looking at a company from Emerging Markets.