Expanding TPS Sales Driving Sustainable Growth for Park 24

CFA Research Challenge, Team L

Team L

Sustainable Growth of Park 24
Agenda
■Investment Summary & Company Overview
■Reasons
Expected High Growth of TPS Sales
Diversification
Strong Balance Sheet
■Valuation
■Risks
■Conclusion
1

Park 24 Co., Ltd. Investment Summary & Company Overview

Recommendation
Market Price
BUY
As of September 28
1,278

Target Price 1,673
31%
Upside Potential

2000
Target Price
1600

1200

800

400

0 (the past half decade)
Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12

Summary Reasons Valuation Risks Conclusion
3


Top Coin Parking Company in Japan
Competitor Comparison (Sales)
Park24
Mitsui Fudosan Realty 42,198 124,080
NIHON PARKING CORPORATION
NIPPON PARKING DEVELOPMENT
TRUST PARK
Paraca
Parking Management Organization Millions of JPY
Competitor Comparison (Number of Parking Spaces)
Park24
Mitsui Fudosan Realty 133,039 473,261
NIHON PARKING CORPORATION
NIPPON PARKING DEVELOPMENT
TRUST PARK
Paraca
Parking Management Organization

4


Why they are top in Japan ?

• Scale Merits
• Strong Business Model
• Marketing Power

5


Business Portfolio(2011)
Parking Business,102,700 （Million of

OTHER RENT-A-CAR
BUSINESS, 3,800 SERVICE, 20,400
MANAGEMENT
OF Mobility
PARKING, 981,0 business, 22,000
CAR SHARING
0
SERVICE, 1,600

Parking Business Mobility business
・Standard Times(ST) ・RENT-A-CAR SERVICE
・Times Partner Service(TPS) ・CAR SHARING SERVICE（TIMES
PLUS）
6


Business Performance
（Million of yen）
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E
Other Business Parking Business Mobility business Sales

7

Park 24 Co., Ltd. Reasons

3 Factors of sustainable Growth

Parking Business

Diversification

Parking Business Diversification Strong Balance Sheet

9

Park 24 Co., Ltd.

Parking Business

10


Parking Business Model
TPS ST (Standard Times)
(Times Partner Service)
Free Parking Ticket
Land Owner
Shop Customer of
Customer
Land Parking Price
Special Fee of Times
Shop

Parking Fee
Customer
management Fee of Times
Payment of a rental
Contract Park24.Co
Providing Parking Service


11


Estimation of the Parking Sales
100000

90000 ST
80000

70000

60000 TPS
50000

40000
TPS overtake ST
30000

20000

10000

0

2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E
ST TPS

12


Expanding TPS Business
There are 3 Reasons Why TPS Business Expand

1. Sufficient Market Size

2. Win-Win Business Model

3. Stable Contracts

13


Sufficient Market Size

Present Room to Develop
Market Size

Potential
Market Size
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000
（Million of yen）
Source: Based on the Student Estimates.


14


Win-Win Business Model

 Gathering market information
 Outsourcing
 Monetization

 TONIC
 Provide Parking Management
 Profit Sharing


15

TONIC System Gathers Information
(Times Online Network & Information Center)
 TONIC
 Provide Parking management
 Profit Sharing

Get Customers
TONIC
CENTER Specific Information


16


Parking Management & Paying Cash for Stores
 TONIC
 Provide Parking Management
 Profit Sharing

Shop
Cost
Profits
TPS
Park


17


Stable Contracts
Cancellation
Rate TPS 4.81%
ST 10.24%

Number
of
TPS ST
Cancellation



Park 24 Co., Ltd.

Diversification

19


Park 24 Develops Business Portfolio

Park 24 Expands
Parking Business Portfolio.
ST TPS With the FCF from
Standard Times.


20


Sales of Parking will grow Stably
Estimated Sales of ST + TPS (Million )
200,000
24.90%
180,000
160,000 24.70%
140,000
24.50%
120,000
100,000
80,000
TPS 24.30%

24.10%
60,000
23.90%
40,000
20,000
0
ST 23.70%

23.50%
2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E

ST TPS SUM G.I. margin (%)


23


Park 24 expands Business Portfolio

New Business
Parking
Portfolio: “Mobility”
ST TPS
Mobility Business;
Mobility Rental Cars and
Rental Car Car Sharing.
Cars Sharing


24


Rental Cars

Car Sharing

Parking Business

Synergy Effects are Expected

25


Rental Cars

1. Park 24 can set up Rental Cars
Spot and Car Sharing Station
Car Sharing
with cheap cost.
Parking Business
2. Customers of Rental Cars and Car
Sharing Use Times. are Expected
Synergy Effects

26

Park 24 Co., Ltd.


27

Park 24 Co., Ltd. Strong Balance Sheet

Given the Expected Steady CF, and Strong B/S
（ x） Leverage
5.0
4.5
4.0
3.5
Steady Cash Flow ＋ Strong Balance Sheet
3.0
2.5
↓
2.0

Grow by Developments Such as
1.5
1.0
0.5
0.0
M&A, Organic Growth
2007 2008 2009 2010 2011

Park24 Competitor Average

Source: Based on data from Park 24 IR, Student Estimates.

TPS Diversification Strong Balance Sheet

28

Park 24 Co., Ltd. Valuation

Target Price by DCF Model

Recommendation
WACC：2.15%

1,673 BUY
Growth:1.39%
31%
Upside Potential
FCF：1,812*
（Million）

*Main Scenario Summary Reasons Valuation Risks Conclusion
30


WACC
Expected Return of Market Portfolio：4.71%

Risk Free Rate：1.65% WACC
Cost of Equity：2.53%
Bias：2.00%
2.15%Cost of Debt：1.30%
Market Risk Premium：1.06%

β：0.832

Tax：41%

31

32
1
3
5

-7
-5
-3
-1
1981.1
1981.4

productivity

price markup
1982.3
1983.2
1984.1
1984.4
1985.3
1986.2
1987.1
1987.4
1988.3
Park 24 Co., Ltd.

risk premium

Summary
wage markup
1989.2
1990.1
1990.4
1991.3
1992.2
1993.1
1993.4

Reasons
1994.3

residual
1995.2
1996.1
1996.4

exogenuos spending
1997.3
1.39%

1998.2
1999.1
Growth Rate

Valuation
1999.4
2000.3
2001.2
2002.1
GDP Change

2002.4
2003.3
Risks

2004.2
Sustainable Growth Rate

investment specific tech

2005.1
2005.4
2006.3
2007.2
2008.1
2008.4
2009.3
monetary policy

2010.2
Conclusion
Valuation


FCF & Target Price
（Million of yen） FCF Weight
Prices

81
6,000
5,168 1.11%
4,425 1.30%
5,000 4,365 1.02%
Patterns 4,284 0.74%
4,000 3,834 0.93%
3,761 0.65%
3,000 2,555 1.20%
2,266 1.39%
2,000 × = ￥1,673
1,924 1.11%
1,812 2.31%
1,596 1.57%
1,000
1,385 1.76%
1,253 1.48%
0 1,226 1.20%
2013/10 period.2014/10 period.2015/10 period.2016/10 period.2017/10 period.2018/10 period.2019/10 period.2020/10 period.2021/11 period.2022/11 period.
1,120 1.39%
(1,000) 1,093 0.74%
851 0.65%
Estimation
33

Park 24 Co., Ltd. Risks

Risks
Impact Planned Power Disasters; Land Owner
Cuts. Earthquakes and cancels Contracts
Typhoons. with Park 24.
Regulation Risks. Rising Supply Costs Moderation of
of Mobility Vehicles. Developing New
Parking.

Moderation of Car Business Cycle
Sharing Member Impacts.
Growth.
Securities of TONIC Risks of Prior
and IT Systems. Investment on
Mobility Business.

Probability
35

Park 24 Co., Ltd. Conclusion

Parking Business
Diversification


Recommendation

BUY
37


Thank you for your attention

Sustainable Growth of Park 24
38

Park 24 Co., Ltd. Presentation Index

 Investment Summary & Company Overview
 Market price & target price
 Top Coin Parking Company in Japan
 Why They are Top in Japan ?
 Business Portfolio(2011)
 Business Performance
 Reasons 3 Factors of sustainable Growth
 Expected High Growth of TPS Sales
 Parking Business Model
 Strong Balance Sheet
 Estimation the Parking Sales
 Expanding TPS Business  Given the Expected Steady CF, plus
 Sufficient Market Size Strong B/S
 Win-Win Business Model  Valuation
• TONIC System Gathers Information  Target Price by DCF Model
• Parking Management & Paying Cash for Stores
 Stable Relationships in Contracts  WACC
 Diversification
 Sustainable Growth Rate
 Park 24 Develops Business Portfolio  FCF & Target Price
 ST Provides Rich FCF  Risks
 High Growth and Big Potential of TPS  Risks
 Sales of Parking will grow Stably  Conclusion
 Park 24 expands Business Portfolio  Conclusion


Appendix

Index (Qualitive Analysis)
index

• Appendix
• Index
• Market Profile
• Theoretical Market Profile
• Estimated Sales of Each Segment
• Areas
• Trend of Parking 2002-2011
• Parking Enterprise 5 Forces Analysis
• Rental Car Enterprise 5 Forces Analysis
• Car Sharing Enterprise SWOT Analysis
• Estimation of Potential Market
• Potential Market
• Comparison of IT System in Parking Industry
• Times Network
• First Mover Advantage and Increasing Returns to Scale in Parking Industry 1
• First Mover Advantage and Increasing Returns to Scale in Parking Industry 2
• Comparison of Strategy in Parking Company
• About “Mitsui Re-park”
• Incentive of Land Owner and Park 24
• Parking Instruments Manufactures
• Uniqueness of the operating style of Park 24
• Cost structure of rent car business

index

Index(Parking Business)

• The way of estimating the parking spaces
• Estimating the number of parking spaces
• Estimating the sales, Cost of sales and gross margin
• The probability of each scenarios
• Estimating the sales by each scenarios
• sales, cost of sales and gross margin

index

Index(Mobility)

• Estimation of Market Size of Rental Car • Estimation of Car Sharing Sales
• Estimation of Market Size of Car Sharing • Estimation of Car Sharing Sales
• Estimation of Rental Car Sales • Car Sharing Members per Population
• Scenarios of Rental Car Sales • Estimation of Members of Car Sharing
• Estimated Sales of Rental Car (Main • Scenarios of Car Sharing Sales
Scenario) • Reasons Why Car Sharing
• Estimated Sales of Rental Car (Good • Estimated Sales of Car Sharing
Scenario) • Estimated Sales of Car Sharing
• Estimated Sales of Rental Car (Bad • Estimated Sales of Car Sharing(yen)
Scenario) • Estimated Gross Income Margin(yen)
• Estimated Sales of Rental Cars (Millions • Estimation of Road Service
yen) • Estimated Sales of Mobility
• Estimated Gross Income of Rental Cars • Estimated Gross Income Margin of
(Millions yen) Mobility

index

Index(Valuation and Financial Analysis 1)
• Calculation of the Risk Free Rate • ABM Industries Inc.
• Return of the Market Portfolio • Coinstar Inc.
• Survivorship Bias • Comparison Company
• Calculation of the Market Risk Premium • Multiple
• Calculation of β • Target Price by Multiple
• Calculation of β • Achievements change for the past 5 years B/S
• Calculation of the Debt Cost • Achievements change for the past 5 years P/L
• Optimal Capital Structure • Financial Analysis “ROE”
• Sustainable Growth Rate • Financial Analysis “NI Margin”
• Assumption of Multiple Analysis • Financial Analysis “Asset Turnover”
• Avis Budget Group Inc. • Financial Analysis “Leverage”
• Dollar Thrifty Automotive Group Inc. • Financial Analysis “ROE”
• Hertz Global Holdings Inc. • Financial Analysis “NI Margin”
• Ryder System Inc. • Financial Analysis “Asset Turnover”
• Zip car Inc. • Financial Analysis “Leverage”
• Standard Parking Corp • Return on Equity
• NI Margin

index

• Asset Turnover • Assumption of the Estimation of Financial
• Leverage Statement
• OP Margin • Estimation of Balance Sheet
• Capital Adequacy Ratio • Estimation of Profit and Loss statement
• Fixed Assets Ratio • FCF Calculation
• Current Ratio • FCF Simulation
• Quick Ratio • Scenario Weight
• Short-term debt is increasing • Weight
• Tangible Fixed Asset Turnover • Stock Price Simulation
• Tangible Asset Turnover Period
• Return on Invested Capital
• Return on Assets
• Sales Growth Rate
• OP Margin Growth Rate
• Cost of Sales/Sales Ratio
• Sales, General, and Administrative
Expenses/Sales Ratio
• Dividend Payout Ratio

index


• The Number of People who Have Driver’s
License
• Car -insurance
• Economics and Business Theory 1
• Risk, considered FCF and WACC
• Risk of rising land prices
• Correlation between Cancellation and
Land Prices
• Safety risks
• Risk of Economic Condition Change
• Risks of natural disasters
• The rate of university graduate leaving
their

CFA Research Challenge, Team L index

Market Profile

Market Profile
Market Cap 188,156 Mllion Yen（15:00）
Dividend Yield 2.40%（15:00）
Dividend per share 30.00（2011/10）
PER 27.25x（15:00）
PBR 4.28x（15:00）
EPS 45.94x（2011/10）
BPS 292.75x（2012/04）
Minimum Sales Amount 125,200（15:00）
Yearly high 1,334（12/09/03）
Yearly low 941（12/01/26）

Source: Yahoo Finance


Theoretical Market Profile
Target Price PER 22x
1,673 PBR 4.04x

Market Cap BPS
251,425,975,192
414
Reason
⇒PER High
Investor’s expectation of Park24 growth power is strong.

Source: Student Estimates


Areas

■Areas
Operating in 24 prefectures.
（Hokkaido, Miyagi, Tochigi, Saitama, Chiba, Tokyo, Kanagawa, Shizuoka,
Aichi, Mie, Shiga, Tokyo, Kyoto, Osaka, Hyogo, Nara, Wakayama, Hiroshima,
Fukuoka, Miyazaki, Okinawa）

＊New Prefectures（Tochigi, Shizuoka, Mie, Miyazaki） Number of parking in each area.
*Owned by Park24（）
October 31r, Heisei23
N of
Area N of Capacity
Parking
5,586
Kanto 163,831（1,189）
（11）
3,386
Kansai 126,141 （298）
（6）
1,725
Other 67,157（1,601）
（8）
10,697
Sum 357,129（3,088）
（25）
Source: Park 24 HP


Trend of Parking 2002-2011
Standard Times CAGR
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003-2011 2003-2007 2008-2011
All 39,255 47,530 54,538 63,196 74,715 89,201 100,868 109,963 118,472 130,168
Capacity
Growth rate 21.08% 14.74% 15.88% 18.23% 19.39% 13.08% 9.02% 7.74% 9.87% 14.25% 17.84% 8.87%
All 3,605 4,002 4,290 4,607 5,263 6,249 7,059 7,495 7,991 8,803
Number
Growth rate 11.01% 7.20% 7.39% 14.24% 18.73% 12.96% 6.18% 6.62% 10.16% 10.43% 11.63% 7.64%
Times Partnership Service CAGR
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003-20112003-20072008-2011
All 8,014 16,917 30,097 58,586 87,454 121,940 138,526 151,508 195,597 226,961
Capacity
Growth rate 111.09% 77.91% 94.66% 49.27% 39.43% 13.60% 9.37% 29.10% 16.04% 44.99% 72.37% 17.89%
All 281 361 549 741 899 1,115 1,276 1,413 1,655 1,894
Number
Growth rate 33.33% 0.00% 25.00% 20.00% -20.00% 70.83% 26.83% -1.92% 15.69% 23.62% 31.74% 14.07%

Source: Park 24 HP


Parking Enterprise 5 Forces Analysis
Threat is small.
Power is weak. Parking business does not
have regulation. So, start to
Customer must use a
business is not difficultly.
parking lot to stop a car.
However, network
In addition, the need of
externality works and it is in
the parking lot is high at
the structure of the first
the time of the car use.
mover advantage, the threat
of new entry is small.

Power is strong. Threat is small.
Other means of
Although the landowner who is
transportation not
a supplier has large bargaining
using a car
ability on an industry structure
target, our company is The competition is not intense.
predominance from the other The competition is not intense. It is the industry leader
company in the business which with a business scale 13 times as large as the industry
does not let an original broker third place on the basis of 3.5 times of the industry
pass. second place, the number on the basis of number. Source: Student Estimates


Rental Car Enterprise 5 Forces Analysis
Power is weak. Threat is small.
Consumers are sensitive
to a price, but the Cost of car
importance of the rental procurement and
car service does not have maintenance are
the mass purchase low. necessary. And
economy of scale
characteristics act.

Power is weak. Threat is strong.
Since most rental car Purchasing cars.
companies are associated Other transportation.
companies vehicle
maker's, they are considered The competition is intense.
that bargaining ability is low.
Customer’s switching cost of consumers has
low, because a lot of competitors being. Therefore, it
may be said that the antagonism of the competition
supplier is strong. Source: Student Estimates


Car Sharing Enterprise SWOT Analysis

Harmful Helpful
Strengths Weaknesses
Internal action External action

・Number of stores ・The procurement cost of the
・It does not take safekeeping car is high
cost of the vehicle

Opportunities Threats

・Market Expansion ・The end of keeping away from
car of the youth
・Station of the electric car ・Intensification of the price
competition by the other
companies entry


Estimation of Potential Market

■The Equation (shown in the table below for more information)
Market size＝the total number of parking times ×the number of parking fee(600 yen)

The total number of parking = number of private car × destination number per year

Annual mileage per vehicle = total mileage of private cars / Number of private cars

Annual mileage of ordinary road per vehicle
= The average driving distance per day ×
(1 - Utilization rate of highway -50km or more traveling rate)


index

Comparing car rental business strategy


Potential Market
Number of Cars
Normal 16,890,402
Small 23,470,003
Number of Cars
Kei 17,986,982
Sum of Above 58,347,387
Taxi 209,566
Number of Cars 58,137,821
Running Gasoline 466,643,983
Distance（ Diesel 14,510,354
Thausand km） Sum of Above 481,154,337
Running Distance p er Car（km） 8,276
Ratio of Highway Use 13%
Running Distance of Highway 1,076
Driving Ratio of Over 50 km 25%
Driving Distance of Over 50 km 993
Driving Distance of Ordinal Road p er Car（km） 6,207
Average Driving Distance p er day 33.5
Number of Goals in y ear p er Car 185.29
Number of Number of Parking in a y ear 10,772,112,022
Stopping Car Disturbance, Resudual 8,617,689,618
Fee 600
M arket Size of Parking(y en) 5,170,613,770,746



Comparison of IT System in Parking Industry

Company System Introduci
Function1 Function2 Function3 ETC
Name Name ng Year
Real time
Pricing with DWH
destribution "Times Club" The industry's
analysis,to take
Park 24 TONIC 2003 of membership program first online
advantage of the
circmustance point parking system
promotion
of Parkings
collective management of
Fee Electronic money and
Nihon the parking
Caliculation credit card （ Suica
Parking situation,making a
System database of automatically etc... ）
Chushajo Information
sogo System by QR
kenkyusho Code

"information By analyzing the "Call center" 24 hours a
Mitsui Rism ＝ Repark delivery" daily data,
day, 365 days a year,
Fudo-san information system for real-time performing the
corresponding trouble
Reality management status of appropriate and
quickly.
parking etc… optimal pricing.

Meitetsu "MKPCard"memb "manaka" Expansion of
Kyosho ership Card parking
"Introduction "The introduction
Trust "Site Info"Trust
of a POS of card member
Park Navi
system for services"


Times Network

The company introduced the “Times club” ,
the common membership card ,
such as the introduction of a common point
between the parking business and mobility
business,
it aims synergistic effect to attract
customers in both businesses.

Source: Park 24 HP


First Mover Advantage and Increasing Returns to Scale
in Parking Industry 1
■User Perspective
When people use a parking lot, there is a purpose of some movement, and it we
use it when it is necessary to stop a car temporarily at time.

We thought that the people at that time take the following actions.

（1）We decide a place to go to.
（2）We decide a means of transportation.
（3）We check whether there is a parking lot near when we move by car.

Thus, when we check a parking lot, we can search a variety of local information
and can predict price range beforehand, and it is thought that we make much of it in
peace whether it is available.

Approximately 10,000 places of whole country includes a parking lot and are
predicted when network externality produces it as a preceding person, and the
predictable Times of the parking lot can stand in the advantageous situation by
TONIC system beforehand.


First Mover Advantage and Increasing Returns to Scale
in Parking Industry 2

■Change adjustment of the profit

We cannot regulate minus balance when we run a parking lot in small
scale when we build the parking lot because it is difficult to predict the
profit of the parking lot beforehand.
However, we can offset a deficit with the black when we invest it on a
large scale and can withdraw in the long term from the deficit parking
lot.
Thus, we can perform an active advance when we run a large-scale
parking lot.



Comparison of Strategy in Parking Company

sales
Company name offices Operating style
（ mirrionyen ）

Park24 124,080 16 Direct negotiation & strong marketing

Nihon Parking 10,687 5 Direct Management

PON PARKING DEVELOPMENT 8,720 14 Reuse of unprofitable parkings

Paraka 7,032 7 Fixed payment or payment from sales

Mitsui Repark 42,198 15 cooperate with broker



About “Mitsui Repark”

Sales (Unit: ¥ 1 million) Number of operational
43,000
42,000
42,198
management（Unit：cars）
41,000 133,039
135,000
40,000
38,786 130,000
39,000 38,263 124,379
38,000 37,348 125,000 120,710
36,526 118,357
37,000 120,000 116,661
36,000
115,000
35,000
34,000 110,000
33,000 105,000
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Mitsui Real Estate Realty Ltd expanding the "Mitsui Repark" is a
consolidated company and a subsidiary of Mitsui Real Estate. Therefore, we
will not be able to obtain financial piecemeal data .For this reason, despite the
impact on the industry, it has not been reflected in the analysis.

Source: Mitsui Repark HP


Incentive of Land Owner and Park 24

It is considered that in order to have a long-term parking contract, a stable relationship
between landowners and the company. So we summarized the reason why their
relationships are mainly consist of, as shown below.
Incentives for land loan（ST）
landowners Park24

By offering unused land, without the need
There is no need to have a fixed assets of
for capital investment and the risks, they
land, it is possible to obtain a stable
can expect to land a stable income. In
earnings in a relatively small capital
addition, it is also possible to switch the
investment.
other land use by the cancellation in two
years contract period.



Parking Instruments Manufactures
Firm Name
企業名 Business Contents
パーキング関連事業内容
VANTEC CORPORATION Logistics IT Service
Nihon Park Manufacture and sale of machinery parking management
Fuji dynamics Manufacturing, sales and maintenance of parking system
Amano Manufacturing, sales and maintenance of parking system
Park Engineer Planning, management consulting and business operation and management of the business

Ekoro Tech Installation, operation and market research equipment sales, rental and parking
Time Parking Metered parking business (operation and management consultancy)
Park Avenue Administrative duties related to parking construction equipment rental business and the operation and management of the hourly parking

Sale of equipment failure response and collect parking, maintenance, parking
Tomo
management
You're parking Operation and maintenance parking
Park Labo management and sales of parking equipment
Parking Systems Sumitomo Heavy Industries management and sales of parking equipment
NichieiIntec Development, manufacturing, sales and maintenance of parking equipment


Uniqueness of the operating style of Park 24

When taking a lease on and acquiring land ,competitors are generally
negotiated with the landlord on the basis of real estate brokerage company.
However, in this form it is difficult to aim the acquisition and loan price for
their advantage to their own companies.
The reason is that the intention of the landlord becomes obscured by the
presence of a mediator .

To solve this problem, Park 24 avoids by salespeople to negotiate directly
with the landlord.

As a result, it will be able to achieve the goals of their agreement.
Leading up to the process, they examine the transcript to explore the city and
land themselves in the business, they negotiate directly with the landlord.



Cost structure of rent car business

There is a possibility that sourcing costs on the rental car
business of the company will be relatively higher than the
other rental companies.

We can guess the main reason why the other major rental
car companies are able to reduce the sourcing costs of the
car is that they are based on automobile companies .



The way of estimating the parking spaces

 Formula for an estimation

 The number of parking spaces
= （The number of parking sites）×（parking spaces per a parking sites）
 The number of parking sites
=（The number of parking sites in the previous fiscal year）＋（The
number of developed parking sites）-（The number of Cancelled
parking sites）＋（The number of converted & segment shift parking
sites ）

 The number of developed parking sites
=（The number of a development sales staff）×（the number of developed
parking sites per a development sales staff）



Estimating the number of parking spaces

The way of estimating the parking spaces
By the following five steps, we estimated the sales of parking business.

STEP1：Estimating the number of development sales staff
STEP2：Estimating the number of developed parking sites per a
development sales staff
STEP3：Estimating the number of parking spaces per a parking sites
STEP4：Estimating the rate of Cancelled parking sites and the rate of
converted & segment shift parking sites
STEP5： Estimating the number of parking spaces in ST and TPS,
classified by scenarios.




Change in past years

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e Reference
The number of
total stuff in 145 142 152 146 184 238 277 278 281 314 365 from the document in IR MTG
parking business
The number of
development sale 165 from telephone MTG
stuff
Estimation of the 45.21% of total stuff in
number of 66 64 69 66 83 108 125 126 127 142
parking business
development sales
Increase in
development sales -1 5 -3 17 24 18 0 1 15 23 av : 9.95
staff




Estimation

2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e
T he increasing
num ber of 10 10 10 10 10 10 10 10 10 10 10
developm ent sales
staff
T he decreaseing
num ber of
3 3 3 3 3 3 3 3 3 3
developm ent sales
staff
T he net increasing
num ber of
10 7 7 7 7 7 7 7 7 7 7
developm ent sales
staff
T he num ber of
developm ent sales 165 172 179 186 193 200 207 214 221 228 235
staffs



Change in past years about ST

ST
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e reference

The number of developed
692 592 686 1,018 1,344 1,271 867 921 1,265 1,250 from IR MTG
parking sites

The number of a
66 64 69 66 83 108 125 126 127 142 165 using estimate

the number of developed
parking sites per a 0.00 10.78 8.62 10.39 12.24 12.49 10.15 6.90 7.25 8.91 7.58




Change in past years about TPS
TPS
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e refarence

The number of
18 99 206 221 189 244 204 181 298 305 400 from IR MTG
developed parking sites

The number of a
66 64 69 66 83 108 125 126 127 142 165 using estimate

the number of developed
parking sites per a 0.27 1.54 3.00 3.35 2.27 2.27 1.63 1.44 2.35 2.15 2.42



STEP2：Estimating the number of developed parking sites per
a development sales staff

Estimation by each scenario

By the following three factors, we estimate the number of developed parking
sites per a development sales staff.

①The shift of the emphasis from ST enterprise to
a TPS enterprise
②Increasing search cost and marching cost of
new land which is the target of ST



Estimation of good scenario
① The shift of the emphasis from ST enterprise to a TPS enterprise
→Main factor
② Increasing search cost and marching cost of new land which is the target
of ST
→Micro factor
In addition, we estimate the increase in TPS per TS1 positive. And we subtracted
data that can be placed in the side of the recession.
The number of developed parking -0.2423x + 496.38
ST一人当たり開発件数goodシナリオ sites The numberST一人当たり開発件数goodシナリオ
of developed parking=sites + 496.38
y -0.2423x
y=
13.00 13.00
12.00 12.00
11.00 11.00
10.00 10.00
9.00 9.00
8.00 8.00
7.00 7.00
6.00 6.00
5.00 5.00
4.00 4.00
2002 2004 2006 2008 2010 2012 2002 2004 2006 2008 2010 2012



Estimation of main scenario
of ST
In addition, we estimate the increase in TPS per-TS1 neutral .

The number of developed parking sites
ST一人当たり開発件数Mainシナリオ The number of developed parking sites
TPS一人当たり開発件数Mainシナリオ
y = -0.2876x + 587.3 y = 0.0478x - 94.157
14.00 2.50
12.00
10.00 2.00

8.00 1.50
6.00
1.00
4.00
2.00 0.50
0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0.00
2006 2007 2008 2009 2010 2011 2012

Source: Student Estimate


of ST
In addition, we estimate the increase in TPS per TS1 negative . And, we also estimate ｔhe
outlook in relation to the future of TPS business strategy negative.

The number of developed parking sites
ST一人当たり開発件数badシナリオ The number of developed parking sites
TPS一人当たり開発件数badシナリオ
y = -0.3363x + 684.2
12.00 2.50 y = -0.0164x + 34.858

10.00
2.00
8.00
1.50
6.00

4.00 1.00

2.00 0.50

0.00 0.00
2007 2008 2009 2010 2011 2012 2005 2006 2007 2008 2009 2010 2011 2012



STEP2：Estimating the number of developed parking sites pe
Estimation Conclusion

Good 　Scenario Main Scenario Bad Scenario
ST TPS TPS/ST ST TPS TPS/ST ST TPS TPS/ST
0.2423 0.2464 1.01692 0.2876 0.0478 0.1662 0.3363 -0.0164 -0.04877



STEP3：Estimating the number of parking spaces
Change in past years per a parking sites
As follows, We can see the change of the number of parking spaces per a parking
sites in past years in ST and TPS.
ST
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 av
the number
of parking 3,605 4,002 4,290 4,607 5,263 6,249 7,059 7,495 7,991 8,803
sites
the number
of parking
ST spaces
the number
39,255 47,530 54,538 63,196 74,715 89,201 100,868 109,963 118,472 130,168

of parking
spaces per a 10.89 11.88 12.71 13.72 14.20 14.27 14.29 14.67 14.83 14.79 14.51
parking
sites
TPS
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
the number
of parking 281 361 549 741 899 1,115 1,276 1,413 1,655 1,894
sites

TPS the number
of parking
spaces
8014 16,917 30,097 58,586 87,454 121,940 138,526 151,508 195,597 226,961

the number
of parking
spaces per a 28.52 46.86 54.82 79.06 97.28 109.36 108.56 107.22 118.19 119.83
parking
sites Source: Student Estimate


per a parking sites
Change in past years

As follows, We can see the change of the number of parking spaces per a parking
sites in past years in ST and TPS.

ST TPS
the number of parking spaces per a parking sites ST the number of parking spaces per a parking sites TPS

16.00 140.00
14.00 120.00
12.00 100.00
10.00
80.00
8.00
60.00
6.00
40.00
4.00
2.00 20.00

0.00 0.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011



per a parking sites
Estimation
Considering the reduction of the increase in recent years, we think it is appropriate that there
is no increase in both ST, TPS from 2011 onwards. However, on the other hand, as business
strategy of ST the target company has stated that they would go aggressively against future
installation of a small parking lot. We believe that using the average of the values of a stable
increased ones since 2006 to take into account (MTG by phone) this point will lead to better
estimates. Thus we adopt the following values in all scenarios.

the number of parking spaces
per a parking sites
ST 14.51
TPS 119.83


STEP4：Estimating the rate of Cancelled parking sites
and the rate of converted & segment shift parking sites
Estimation ST
 Estimation of the churn rate (ST)
We adopted the average values of the years from 2003 to 2011 when viewed in
terms of the number as an estimate of the churn rate of ST business.
 Estimation of migration rate for interval reclassification (ST)
We adopted the average values of the number of years based on estimate of the
migration rate for interval reclassification since 2009.
ST
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 AV
Developed in this year 10,910 12,821 13,582 14,224 19,380 22,365 20,982 19,638 18,947 24,717 A
2,857 4,217 6,330 5,824 7,557 7,667 7,730 8,483 9,000 11,782 B
Number The number of cancellation
converted & segment shift -150 -329 -244 258 -304 -212 -1,585 -2,060 -1,438 -1,239 C
of
Total 39,255 47,530 54,538 63,196 74,715 89,201 100,868 109,963 118,472 130,168 D D=D(-1)+A-B+C
spaces
the rate of Cancellation 10.74% 13.32% 10.68% 11.96% 10.26% 8.67% 8.41% 8.18% 9.94% 10.24% AV:2003-2011
the rate of converted & segment -0.84% -0.51% 0.47% -0.48% -0.28% -1.78% -2.04% -1.31% -1.05% -1.47% After starting car sharing
Developed in this year 692 592 686 1,018 1,344 1,271 867 921 1,265 A
number The number of cancellation 295 345 373 363 361 441 422 427 462 B
converted & segment shift 0 41 4 1 3 -20 -9 2 9 C
of
Total 3,605 4,002 4,290 4,607 5,263 6,249 7,059 7,495 7,991 8,803 D D=D(-1)+A-B+C
sites
the rate of converted & segment 0.00% 1.02% 0.09% 0.02% 0.06% -0.32% -0.13% 0.03% 0.11% 0.004% After starting car sharing



STEP4：Estimating the rate of Cancelled parking sites
and the rate of converted & segment shift parking sites
Estimation TPS
 Estimation of the churn rate (TPS)
We adopted the average values of the years from 2008 to the future trends.
 Estimation of migration rate for interval reclassification （TPS）
We adopted the average value of the migration rate in the stable phase
2008, 2010 and 2011.

TPS
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 AV
Developed in this year 4,228 9,337 13,501 29,922 32,487 36,394 21,216 16,483 50,117 43,188 A
The number of cancellation 499 347 353 654 3,526 1,497 4,708 7,715 6,605 10,666 B
Number
converted & segment shift 639 -102 32 -779 -93 -411 78 4,214 577 -1,158 C
of
Total 8,014 16,917 30,097 58,586 87,454 121,940 138,526 151,508 195,597 226,961 D D=D(-1)+A-B+C
spaces
the rate of converted & segment -1.27% 0.19% -2.59% -0.16% -0.47% 0.06% 3.04% 0.38% -0.59% -0.05% 08,10,11
Developed in this year 18 99 206 221 189 244 204 181 298 305 A
number The number of cancellation 15 20 20 25 30 24 41 52 51 59 B
converted & segment shift 2 1 2 -4 -1 -4 -2 8 -5 -7 C
of
Total 281 361 549 741 899 1,115 1,276 1,413 1,655 1,894 D D=D(-1)+A-B+C
sites
the rate of converted & segment 0.36% 0.55% -0.73% -0.13% -0.44% -0.18% 0.63% -0.35% -0.42% -0.32% 08,10,11



STEP5： Estimating the number of parking spaces
in ST and TPS, classified by scenarios.
ST
It is as follows when estimated from 2012 to 2022 by the change in the number of
parking scenario of business parking ST. • You and the number of parking after taking
into account the number of parking churn considering the movement classification
and reclassification, the final surrender.
Good senario
year 2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e 2020e 2021e 2022e Derivation
The number of a development sales staff 165 172 179 186 193 200 207 214 221 228 235 A
the number of developed parking sites per a development sales staff 8.67 8.43 8.18 7.94 7.70 7.46 7.22 6.97 6.73 6.49 6.25 B

The number of developed parking sites 1,430 1,449 1,465 1,477 1,486 1,492 1,494 1,492 1,488 1,479 1,468 C C=A×B

The number of parking sites 9,597 10,358 11,088 11,783 12,443 13,067 13,655 14,204 14,715 15,187 15,618 D D=D(-1)×C

parking spaces per a parking sites 14.51 14.51 14.51 14.51 14.51 14.51 14.51 14.51 14.51 14.51 14.51 E
The number of parking spaces 20,752 21,028 21,255 21,432 21,560 21,639 21,669 21,650 21,581 21,463 21,296 F F=D×E
The rate of cancellation 10.24% 10.24% 10.24% 10.24% 10.24% 10.24% 10.24% 10.24% 10.24% 10.24% 10.24% G
the rate of converted & segment 1.47% 1.47% 1.47% 1.47% 1.47% 1.47% 1.47% 1.47% 1.47% 1.47% 1.47% H
Number of parking, after consideration of cancellation 135,683 140,829 145,599 149,988 153,991 157,604 160,825 163,649 166,073 168,096 169,715 I I=F×(1-G-H)



ST

M ain senario



Number of parking, after consideration of cancellation 135,575 140,507 144,962 148,936 152,428 155,436 157,958 159,992 161,538 162,594 163158 I I=F×(1-G-H)



STis as follows when estimated from 2012 to 2022 by the change in the number of
It
Estimation of bad scenario
Bad senario


Number of parking, after consideration of cancellation 135,458 140,161 144,277 147,806 150,748 153,105 154,876 156,062 156,662 156,678 156,108 I I=F×(1-G-H)



TPS
parking scenario of business parking TPS. • You and the number of parking after
taking into account the number of parking churn considering the movement
classification and reclassification, the final surrender.

Good senario

The number of developed parking sites 395 454 517 583 652 725 802 882 965 1,052 1,142 C C=A×B


The number of parking spaces 275,157 329,601 391,546 461,406 539,594 626,522 722,605 828,256 943,888 1,069,915 1,206,750 F F=D×E
Number of parking, after consideration of cancellation 261,785 313,583 372,518 438,983 513,371 596,075 687,488 788,005 898,018 1,017,920 1,148,105 I I=F×(1-G-H)



TPS
parking scenario of business parking TPS. • You and the number of parking after
taking into account the number of parking churn considering the movement
classification and reclassification, the final surrender.
Main senario

The number of developed parking sites 362 386 410 435 461 487 514 542 570 599 629 C C=A×B


Number of parking, after consideration of cancellation 258,049 302,058 348,835 398,454 450,992 506,525 565,131 626,884 691,862 760,141 831795.9 I I=F×(1-G-H)


Expanding TPS Sales Driving Sustainable Growth for Park 24

Expanding TPS Sales Driving Sustainable Growth for Park 24

Recommended

Recommended

More Related Content

Similar to Expanding TPS Sales Driving Sustainable Growth for Park 24

Similar to Expanding TPS Sales Driving Sustainable Growth for Park 24 (20)

Expanding TPS Sales Driving Sustainable Growth for Park 24