In addition to parking lot management and consulting, since 2006 the company has been operating ski resorts. It has three segments: Parking Lot, Theme Park, and Ski Resort.
Commercial Services & SuppliesHotels, Restaurants & LeisureDiversified Consumer Services
Executive summary
Business overview
Business outline: In addition to parking lot management and consulting, Nippon Parking Development (NPD) has operated ski resorts since 2006 and theme parks since 2016. As of FY07/21, it operated three main segments: Parking Lot, Ski Resort, and Theme Park. The company focuses on businesses with little competition that also have issues with asset utilization, such as occupancy rates, and specializes in improving profitability through the effective utilization of assets. All three of the company’s business segments have these attributes.
Parking Lot business: In FY07/21, sales were JPY14.3bn (+2.3% YoY) and operating profit was JPY3.2bn (+9.2% YoY). In Japan, its main target is downtown building parking garages built as “legally mandated parking lots.” The business is subdivided into directly managed facilities and outsourced management. As the business is centered on the monthly and monthly/hourly rental of parking spaces to specified customers, there is less competition compared with coin parking. The spread of COVID-19 had no particular effect on monthly parking. In hourly parking, although the pandemic led to a decrease in utilization rates in shopping districts, there were no substantial effects because of the large volume of business usage overall. The company expanded the business overseas in FY07/11. In FY07/21, the domestic parking lot business accounted for 88.4% of sales and the overseas parking lot business for the remaining 11.6%. As of FY07/21, the company operated parking lots in Thailand, China, South Korea, Indonesia, and Taiwan. However, given the significant economic impact of the COVID-19 pandemic and the fact that an end is still not in sight, NPD re-examined its parking lot locations in FY07/22 and decided to suspend business or close its parking lots in Indonesia and Taiwan, and sold shares in its subsidiary in China (Shanghai). The company noted that it plans to concentrate management resources in Thailand and South Korea for the foreseeable future.
Ski Resort business: In FY07/21, sales were JPY4.5bn (-25.0% YoY) and the operating loss was JPY429mn (operating profit of JPY317mn in FY07/20). The segment comprises subsidiary Nippon Ski Resort Development (TSE Mothers: 6040), which owns eight ski resorts in Nagano, Gifu, and Gunma prefectures. The ski resorts of the NPD group not only provide ski slopes for skiers and snowboarders in the winter season, but also beautiful landscapes and scenery that can be observed from mountain tops in the summer season. In FY07/21, these ski resorts attracted 979,000 visitors in the winter season (-33.7% YoY) and 412,000 in the summer season (+10.5% YoY). The company’s policy is to increase the ratio of summer season sales to 30% in the medium term, from just over 20% before the pandemic. In FY07/21, summer season operations contributed 28.1% of sales, but in FY07/21, business was impacted by a state of emergency declared due to the pandemic during the peak winter season (January to March).
Theme Park business: In FY07/21, sales were JPY4.4bn (+75.0% YoY) and operating profit was JPY761mn (operating loss of JPY218mn in FY07/20). Theme park sales in FY07/21 were JPY2.5bn (JPY1.3bn in FY07/20), while hotel and resort sales were JPY1.9bn (JPY1.2bn in FY07/20). In the Theme Park business, the company operates Nasu Highland Park (Nasu, Tochigi Prefecture), leisure facility Nasu Kogen Rindoh-ko Family Farm (acquired in May 2020), and rental villa and accommodation facilities in the surrounding area. In FY07/21, the park attracted 705,000 visitors (+89.0% YoY). While winter is the peak season for the Ski Resort business, the peak seasons for the Theme Park business are the extended Golden Week holiday from late April through early May and the summer vacation season in July and August.
Earnings trends
FY07/21 results: Sales were JPY23.8bn (+3.5% YoY), operating profit JPY3.3bn (+22.1% YoY), recurring profit JPY3.5bn (+26.2% YoY), and net income attributable to owners of the parent JPY2.3bn (+94.3% YoY). Sales and profit rose YoY. In the Ski Resort business, sales and profit fell YoY. Visitor numbers were down sharply YoY, primarily in winter, amid requests that people refrain from non-essential, non-urgent outings and stay at home during the pandemic. Sales and profit rose YoY in the Parking Lot and Theme Park businesses, driving companywide growth. Sales and profit increased in the Parking Lot business due to steady growth in new contracts for monthly parking facilities in Japan, despite the impact of voluntary suspension of operations and shortened business hours for hourly parking lots due to the declaration of a state of emergency. The Theme Park business benefited from higher sales at Nasu Kogen Rindoh-ko Family Farm (acquired in May 2020), school excursions from the Tohoku area to Nasu Highland Park (roughly 60,000 visitors), and an increase in customers staying at rental villas. There was also a rebound from the previous year, when the business curtailed sales activities during the extended Golden Week holiday from late April through early May 2020 due to the pandemic.
FY07/22 forecast: On September 3, 2021, the company announced its full-year FY07/22 forecast that calls for sales of JPY25.4bn (+6.8% YoY), operating profit of JPY4.5bn (+37.9% YoY), recurring profit of JPY4.4bn (+27.1% YoY), net income attributable to owners of the parent JPY2.9bn (+24.2% YoY), and EPS of JPY8.91. The company expects dividend per share of JPY5, marking an increase over 12 consecutive years. The company expects sales and profit growth for all businesses. For the Parking Lot business, it forecasts sales of JPY14.6bn (+2.8% YoY) and operating profit of JPY3.2bn (+12.8% YoY). For the Ski Resort business, it forecasts sales of JPY5.2bn (+13.3% YoY) and operating profit of JPY350mn (operating loss of JPY428mn in FY07/21). For the Theme Park business, it forecasts sales of JPY5.0bn (+13.7% YoY) and operating profit of JPY880mn (+15.6% YoY). For 1H FY07/22, the company expects sales of JPY12.6bn (+4.7% YoY), operating profit of JPY2.3bn (+31.4% YoY), recurring profit of JPY2.3bn (+26.2% YoY), net income attributable to owners of the parent of JPY1.6bn (+24.9% YoY), and EPS of JPY4.92.
Longer-term outlook: In the announcement of FY07/21 results, NPD did not announce a longer-term outlook. This was because the pandemic had not yet abated, and highly unpredictable conditions continued, making it difficult to present a highly reliable forecast, with the exception of the domestic parking lot business.
Strengths and weaknesses
Strengths: Shared Research thinks that NPD’s strengths are: 1) the ability to obtain more favorable rent terms than prices for neighboring lots due to first mover advantage for legally mandated parking lots, 2) the ability to improve profitability by controlling demand for corporate vehicle parking and monitoring usage, and 3) the ability to match up an excess and shortage of parking lots.
Weaknesses: Shared Research thinks the company’s weaknesses are 1) overseas challenges in applying successful domestic business model, 2) Ski Resort and Theme Park businesses are prone to weather impact, and 3) low staff retention.
Key financial data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Starting in FY07/15, interest-bearing debt includes lease liabilities.
Recent updates
Share buyback plan
On March 4, 2022, Nippon Parking Development Co., Ltd. announced a share buyback plan.
The company decided on March 4, 2022, to carry out a share buyback.
Details of share buyback
Trends and outlook
Quarterly trends and results
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Segment sales figures include internal sales.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Sales per leased space for directly managed facilities is determined by dividing directly managed facilities sales by the number of leased spaces in those facilities; sales per managed space for outsourced management facilities is calculated by dividing outsourced management facilities sales by the number of parking spaces in those facilities.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Sales per leased space for directly managed facilities is determined by dividing directly managed facilities sales by the number of leased spaces in those facilities; sales per managed space for outsourced management facilities is calculated by dividing outsourced management facilities sales by the number of parking spaces in those facilities
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Sales per leased space for directly managed facilities is determined by dividing directly managed facilities sales by the number of leased spaces in those facilities; sales per managed space for outsourced management facilities is calculated by dividing outsourced management facilities sales by the number of parking spaces in those facilities
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures may differ from company materials due to differences in rounding methods.