[Company analysis] Central Japan Railway Company (東海旅客鉄道)

「Central Japan Railway Company (東海旅客鉄道)」is one of the three Japan's representative railway companies(「East Japan Railway Company(東日本旅客鉄道)」,「West Japan Railway Company(西日本旅客鉄道)」and「Central Japan Railway Company(東海旅客鉄道)」which inherited the railway business from「National Railways(日本国有鉄道)」on April 1, 1987. This company is commonly known as "JR Central Japan"and the English abbreviation is "JR Tokai". This company has relatively short operation distance compare to other JR companies, however, they acheived the higest profitability based on "Tokaido Shinkansen(東海道新幹線)". The number of consolidated employees is approximately 29,128.

 

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	Central Japan Railway Company
Company name (Japanese)	東海旅客鉄道
Date of establishment	Wednesday, April 1, 1987
Headquarters location	〒450-6101 愛知県名古屋市中村区名駅一丁目1番4号
Capital	112,000
Consolidated sales	1,878,137
Consolidated operating profit	709,775
Consolidated total assets	9,295,745
Consolidated capital	3,508,065
Capital adequacy ratio	37.7%
Consolidated number of employees	29,128

 

 

 

2. Summary and Features

 
「Central Japan Railway Company」operates based on the "Tokaido Shinkansen(東海道新幹線)", and railways are located in the Tokai and Chubu regions of Kanagawa, Shizuoka, Yamanashi, Nagano, Aichi, Gifu, Toyama, Shiga, Mie and Wakayama Prefecture. Together with「Toyota Motor Corporation(トヨタ自動車)」and「Chubu Electric Power Co., Inc.(中部電力)」, it is said to be the three largest companies in the Chubu region.

 

On the other hand, in terms of business distance, it is the second shortest company after「Shikoku Railway Company(四国旅客鉄道)」. However, "Tokaido Shinkansen" which is a symbol of Japan Railways, generates about 85% of the total profit of「Central Japan Railway Company」. On the other hand, the profit of conventional line transportation do not reach 10% of the total.

 

Actually, this conventional line business has not been in good condition since the establishment of「JR Tokai」. In the first place, the central area of ​​Japan, which is the business area of​「JR Tokai」, is famous for its high  rate of motorization. Moreover, they had to compete with private railways such as「Nagoya Railroad(名古屋鉄道)」and「Kinki Nippon Railroad(近畿日本鉄道)」. Therefore, it is said that the conventional railway business of「JR Tokai」is placed in red ocean.

Currently,「JR Tokai」is challenging the Linear Shinkansen business. If this magnetic levitation train becomes practical, Tokyo and Osaka can be connected in a minimum of 1 hour and 7 minutes, which is expected to have a great economic effect on Japan as a whole. This line will not be politically abused because「JR Tokai」made investment by its own expense. Moreover, it is said that「JR Tokai」is challenging the「JR East」, considering the fact that the final destination of this Linear Shinkansen is Shinagawa Station, not Tokyo Station.

 

 

 

3. Major Business

 

■ Transportation industry

■ Distribution industry

■ Real estate industry

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,756,980	1,822,039	1,878,137
Consolidated operating profit		619,564	662,023	709,775
Consolidated total assets		7,052,675	8,908,682	9,295,745
Consolidated net assets		2,726,729	3,084,739	3,508,065
Breakdown of sales	Transportation business	1,368,604	1,412,182	1,449,198
	Distribution business	227,201	243,228	253,312
	Real estate business	41,244	46,117	49,646
	Others	119,929	120,510	125,980