Korean Parts

Strategic and commercial functions remain concentrated in a single individual — a structural key-person dependency characteristic of the company’s current stage. The client base is relatively concentrated, with several anchor buyers accounting for a significant share of revenue.

The Georgia project is a step-change in average transaction size and introduces electric vehicles as a new product category. Preliminary agreements have been concluded, and the contracts are expected to be finalised upon securing external financing. Given the three-month sea transit via the Cape of Good Hope and exposure to price fluctuations in the Korean used EV market during procurement, the liquidity buffer of approximately EUR 31,000 is sized as a minimum operational reserve rather than a comprehensive risk cushion; a material cost overrun beyond it would have to be absorbed from the cash flow of standard operations.

Capacity provides a 12-month warranty on all supplied vehicles, reflected in the contract pricing. The exposure is partly mitigated by the recent model years (2022–2024), within or close to the manufacturers’ original warranty periods — typically five years for Hyundai and Genesis, including the high-voltage battery and drivetrain.

The track record covers two completed fiscal years: 2024 (statutory accounts audited under Korean Standards on Auditing) and 2025 (management accounts, subject to final statutory closure). Total equity at the end of 2025 is EUR 174,275: registered capital (EUR 1,333), the owner’s additional contribution (EUR 78,000), retained earnings from 2024 (EUR 11,368) and net income for 2025 (EUR 83,574). The company has not used external debt financing to date.

Income statement, EUR

Margin and growth indicators

The 2024 figure reflects the first full operating year, focused on supplier onboarding and export workflow development; 2025 marks the transition to active scaling, with materially higher shipment volumes across multiple markets. Gross profit nearly doubled from EUR 148k to EUR 288k (+94.7%) as the COGS-to-revenue ratio declined from 78.4% to 76.1%, indicating improved procurement efficiency at higher volumes. Net margin improved from 1.7% to 7.0%. Financial expenses remained minimal (EUR 3.8k and EUR 5.3k), reflecting the absence of external debt.

The projections incorporate the Georgia EV contracts and interest on the planned EUR 550k facility — the company’s first external borrowing.

Projected income statement, EUR

Projected margin and growth indicators

Revenue of EUR 1.67m in 2026 is driven by the Georgia EV contracts (combined contract value EUR 800k) and continued expansion of the core export business; the 2027 projection of EUR 1.77m reflects moderation as the Georgia contracts move into final settlement. Operating leverage continues to strengthen: the OPEX-to-revenue ratio declines from 15.8% in 2025 to 14.2% in 2026 and 14.0% in 2027, and operating profit reaches EUR 177k and EUR 187k.

The most significant structural change is external debt. Interest expenses rise from EUR 5.3k in 2025 to EUR 45.9k in 2026 and EUR 40.5k in 2027 — an approximately 8.6× increase. Operating profit covers interest 3.9× in 2026 and 4.6× in 2027, well above the 1.5× minimum threshold for basic debt serviceability. Net profit is projected at EUR 118k in 2026 and EUR 131k in 2027; projected 2026 net income alone would add approximately 68% to the current equity base.

Beyond the core spare parts and used vehicle business across Central Asia and the Middle East, the 2026 growth plan centres on exporting Korean electric vehicles to Georgia under a two-contract arrangement with LLC Automoby (registration number 446977022, Georgia), an existing counterparty with prior transaction history. The end user is DW AUTO LLC, a Georgian vehicle rental operator expanding its fleet; Automoby acts as the procurement intermediary. The preliminary agreement was entered into in February 2026. The project uses the existing procurement channels and port infrastructure and deepens the company’s presence in an existing but underutilised export market.

The two contracts of ten vehicles each run sequentially, the second starting approximately two months after the first shipment is dispatched. Delivery is CIF Batumi — cost, insurance and freight borne by Capacity — from Busan to Batumi via the Cape of Good Hope rather than the Suez Canal, reflecting the ongoing disruption to Red Sea shipping; estimated sea transit is up to three months, with cargo insurance for the full period. Each contract runs approximately 11 months from finalisation to final payment: up to two months for financing, procurement, pre-sale preparation and export documentation, up to three months at sea, and six months of post-delivery instalments.

Cost and revenue structure, EUR

VAT refund and total margin, EUR

The trading margins of 21.5% and 20.4% sit within the company’s typical vehicle export range of 15–21%. The additional component is the Korean VAT refund: domestic prices include 10% VAT, recoverable on export, which lifts the effective margin to 28.3% and 27.1%. Three factors support the margin: part of the batch is to be sourced directly from fleet operators and leasing companies at volume prices below standard auction levels; import duties and excise on electric vehicles in Georgia are currently zero; and the VAT refund on EV exports is a standard fiscal instrument available to all qualifying exporters.

The combined contract value is EUR 800,400 against a total cost of EUR 632,000; the combined margin including the VAT refund is EUR 222,400, a blended ~27.8%. The majority of client payments are expected within 2026.

The automotive aftermarket — replacement parts and maintenance services after the original vehicle sale — is a large and structurally growing global market. Estimates for 2025 range from approximately $489bn (Grand View Research) to $860bn (Precedence Research), depending on methodology and scope, and most forecasts project 3–6% CAGR through the end of the decade. Demand is driven by a global light-vehicle fleet projected to reach approximately 1.7 billion units by 2033 (S&P Global Mobility), rising average vehicle age in mature markets (over 12.6 years in the US in 2024), and fast-growing vehicle ownership in developing economies that need affordable non-OEM and aftermarket components.

South Korea as a parts export hub

South Korean automotive parts exports reached $22.55bn in 2024 (KAICA), anchored by the Hyundai Motor Group ecosystem, including Hyundai Mobis and a network of independent OEM manufacturers. Hyundai Motor and Kia together sold 7.23 million vehicles globally in 2024, making the group the world’s third-largest automaker, and the automotive sector accounts for approximately 15% of total Korean exports. The US takes 36.5% of parts exports, the EU 17.3%, Mexico 9.5% and China 6.4%; the rest goes to the Middle East, Central Asia, Southeast Asia and Africa — the segment most relevant to Capacity.

Korean used vehicle exports

South Korea exported approximately 639,000 used vehicles in 2023 (+36% versus 2021). Korean vehicles are favoured in Middle Eastern and Central Asian markets over Japanese alternatives because they are configured for right-hand traffic, and a weaker won in 2024–2025 has further improved price competitiveness. Japan’s 2023 restrictions on used vehicle exports to Russia and South Korea’s own partial restrictions in 2024 have redirected trade flows through Central Asian intermediaries, particularly Kazakhstan and Kyrgyzstan.

Central Asia and the Middle East

Capacity’s principal markets share high Korean-brand fleet penetration, limited domestic parts manufacturing and established routes from Korean export ports. Kazakhstan, the largest automotive market in Central Asia, sold 234,852 new vehicles in 2025 (+14.4%); Hyundai holds a 21.9% share and Kia 10.0% — together approximately 32% — and the registered fleet exceeds five million units. The UAE is a regional distribution hub, with Jebel Ali port facilitating re-export across the Middle East and North Africa, while Turkey, Libya, Kyrgyzstan and Uzbekistan add structurally supported demand.

Challenges

• Competitive pressure from Chinese aftermarket manufacturers.
• Regulatory and tariff uncertainty in destination markets.
• Logistics disruption, such as the Red Sea shipping disruptions of 2024.
• The long-term transition to electric powertrains, though its timeline in the company’s emerging-market destinations remains extended.

The EUR 550,000 facility is secured by a two-layer structure combining existing company-owned operational assets and the 20 electric vehicles acquired under the Georgia contracts with loan proceeds. Collateral is valued at nominal and conservative liquidation values, with liquidation discounts of 20% for existing operational assets and 10% for contract vehicles.

• Existing operational assets — warehouse infrastructure, materials handling equipment, two vehicles (Hyundai Porter II and Hyundai Tucson, both 2021), CCTV, IT equipment and office furniture, at aggregate book value.
• Contract vehicles — ten Genesis G80 Electrified and ten Hyundai Ioniq 5, the principal layer. During procurement and transit they are pledged directly to the lender. After delivery in Batumi they pass to the buyer on instalment terms with a registered lien in favour of Capacity, recorded in the National Agency of Public Registry of Georgia, and the lender’s security becomes a claim on Capacity’s enforceable contractual rights, including the registered liens and the outstanding instalments.
• The 90% liquidation rate on contract vehicles reflects the active secondary market for Korean electric vehicles of the 2022–2024 model years.

Coverage is adequate but not excessive, consistent with the nature of the transaction: the primary repayment source is the contracted cash flow from the Georgia contracts and ongoing operations, with the collateral as tangible downside protection. As the buyer settles instalments, Capacity’s cash position improves and fully paid vehicles are released from encumbrance; in a buyer default, the registered liens give the lender priority enforcement rights over the remaining vehicles.

Executing both contracts costs EUR 632,000. Client advances total EUR 112,830 (EUR 47,250 under Contract 1 and EUR 65,580 under Contract 2), reducing the amount to be pre-financed to approximately EUR 519,000. The EUR 550,000 facility leaves a liquidity buffer of approximately EUR 31,000, ~4.9% of total cost.

Without external financing, executing the Georgia contracts would divert substantially all of the company’s available working capital and stop it from running standard spare parts and used vehicle orders in parallel. The facility therefore both funds the contracts and preserves the company’s ongoing operating capacity.

Capacity requests a short-term working capital facility of EUR 550,000 to finance the two Georgia EV export contracts, bridging upfront procurement and logistics costs and the staged client payments received over up to 11 months per contract. The facility is project-linked and is not intended to refinance historical obligations or cover operating losses.

Tranche structure

• Tranche 1 — EUR 350,000: procurement of the first batch (Genesis G80 Electrified), export logistics and part of the contingency buffer; drawn at the start of the project.
• Tranche 2 — EUR 200,000: procurement of the second batch (Hyundai Ioniq 5), export logistics and the rest of the buffer; drawn approximately two months after dispatch of the first shipment.

The staggered drawdown shortens the period during which the full amount is outstanding and aligns financing costs with actual capital deployment.

Repayment terms

Capacity Co., Ltd. is a South Korea–based B2B export trading company specialising in the wholesale export of Korean automotive spare parts — genuine, OEM and aftermarket components for Hyundai, Kia and Genesis vehicles — and used Korean-manufactured automobiles. It sources products from Korean manufacturers and authorised distributors, aggregates orders for overseas buyers, performs quality control and packaging, and coordinates export logistics through the ports of Pyeongtaek and Busan. The company is based in Pyeongtaek, Gyeonggi Province, in direct proximity to tier-one Korean parts suppliers and major export terminals.

Both lines serve the same B2B client base and use the same logistics infrastructure. The spare parts portfolio covers three sourcing tiers — genuine parts via Hyundai Mobis and official channels, OEM components and aftermarket alternatives — with gross margins of 20–28%. Used vehicles are sourced through Korean wholesale auctions and leasing companies, with margins of 15–21%. The blended gross margin across both lines is approximately 22–24%.

Corporate identifiers: Capacity Co., Ltd.; registration number 239-86-02819; established 27 November 2023; registered office Rm. 201, 28-11, Yeosul 4-gil, Poseung-eup, Pyeongtaek-si, Gyeonggi-do 17955, South Korea.

The operating model is order-driven and asset-light: procurement is performed against confirmed customer orders, which limits inventory risk. The cycle begins with a customer advance of typically 30–50% of order value, followed by procurement, inspection, packaging and export shipment. Suppliers are paid in full at procurement, while customers settle the balance after receiving the shipping documentation, creating a working capital gap of 20–60 days per transaction. Scalability is therefore linked primarily to working capital rather than to fixed infrastructure.

The start-up was funded with registered capital of EUR 1,333 plus a personal contribution of EUR 78,000 invested during 2023–2024, with no external debt. Besides the five principal markets, the company has secondary activity in Uzbekistan and Georgia. Client relationships develop through trial orders followed by increasing volumes; the company does not operate under long-term supply agreements.

Accounting, tax reporting and customs brokerage are outsourced, and the existing warehouse and logistics setup does not constrain moderate growth.

Capacity is solely owned and managed by Ten Andrey Vladimirovich (born 1978), director and sole shareholder. Before founding the company he spent over 15 years in the automotive industry: first as co-owner and operational manager of an automotive service centre, then in a senior management position at a dealership responsible for commercial operations, inventory management and supplier coordination — hands-on knowledge of vehicle sourcing, parts procurement, B2B pricing and logistics.

Within Capacity, the CEO is directly responsible for all strategic decisions, key client negotiations, vehicle procurement at Korean wholesale auctions and financial oversight. The procurement and client manager handles day-to-day order execution independently, and operational processes are documented.