[Company analysis] Tokyu Corporation (東京急行電鉄)

「Tokyu Corporation (東京急行電鉄)」is a railway company with a route from southwestern Tokyo to eastern Kanagawa Prefecture, and is a core company of the 「Tokyu Group」together with「Tokyu Land Holdings(東急不動産)」. The total operating distance is 104.9km, which is quite short. But as for the sales, they are the 3rd largest private railway and for profit, they have the largest volume in Japanese private railway company. The number of consolidated employees is approximately 24,662.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Tokyu Corporation
Company name (Japanese)	東京急行電鉄
Date of establishment	Saturday, September 2, 1922
Headquarters location	〒150-8533 東京都渋谷区神泉町8番16号
Capital	121,724
Consolidated sales	1,157,440
Consolidated operating profit	81,971
Consolidated total assets	2,412,876
Consolidated capital	796,164
Capital adequacy ratio	33.0%
Consolidated number of employees	24,662

 

 

 

2. Summary and Features

 
In 1922, 「Meguro Kamata Electric Railway(目黒蒲田電鉄)」which is the predecessor of「Tokyu Corporation」, was founded. And the following year, the line between "Meguro Kamata(目黒蒲田)" and "Kamata(蒲田)" was fully opened. The "Oimachi Line(大井町線)" was opened in 1929, and the "Toyoko Line(東横線)" was opened in 1932. Like this,「Tokyu Corporation」has expanded mainly in the Tokyo and Kanagawa metropolitan areas.

 

Currently, the total operating distance of「Tokyu Corporation」is only 104.9km, which is the 11th length of 16 major private railway companies. However, sales volume per operating distance is considerably high, it is 2.45 billion yen / km, which is the top class in the railway industry. This is 1.5 times higher than Tokyo Metro's 1.73 billion yen / km. Thanks to this efficiency,「Tokyu Corporation」achieved largest profit in the Japanese private railway companies.

 

If JR is included in the above comparison, it has 3rd largest profit after「East Japan Railway Company(東日本旅客鉄道)」and「Central Japan Railway Company(東海旅客鉄道)」. The reason why they could get high profit despite their relatively short operating distance is, that they are maintaining the large number of transit customer. Besides, considering their sales composition, this railway business is not their major business. 

 

Especially for the total operating profit of「Tokyu Corporation」, the railway business accounts for only 35% of the total operating income, and the remaining 65% is generated from the real estate business, hotel business, and lifestyle service business. In terms of sales, as of 2018,  the railway business accounts only 17.5%. In this way, they have high sales and operating profits in businesses apart from railway business. That is the main reason they could achieve the significant results among the Japanese private railway companies.

 

 

 

3. Major Business

 

■ Railway business
This is the core business of「Tokyu Corporation」. They are maintaining a railway network centered on Tokyo and Kanagawa, including the Toyoko Line, Meguro Line, and Denentoshi Line. In terms of the number of transit customers, it is the second largest private railway after「Tokyo Metro」. 

■ Real estate business
They are working on development in the surrounding area, centering on Shibuya Station. Recently, they have been focusing on the comprehensive building business, which combines not only commercial facilities but also offices.

■ Life service business
This company provides lifestyle services for general consumers such as "Tokyu Hiyoshi Station" and "Tokyu Square Garden Site" by actively utilizing the space above and below the railway facilities. 

■ Hotel business
「Tokyu Hotels」has 42 locations nationwide.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,117,351	1,138,612	1,157,440
Consolidated operating profit		77,974	82,918	81,971
Consolidated total assets		2,148,605	2,264,636	2,412,876
Consolidated net assets		678,382	747,049	796,164
Breakdown of sales	Transportation business	205,611	209,660	211,676
	Real estate business	130,728	139,643	160,238
	Life service business	676,402	685,919	686,417
	Hotel resort business	104,609	103,388	99,107