Coverage initiated on: 2019-04-22 ResearCh Coverage Report By Shared ResearCh InC. Last update: 2021-08-12 3496 AZoom Shared ResearCh InC. has produCed this report By request from the Company disCussed in the report. The aim is to provide an “owner’s manual” to investors. We at Shared ResearCh InC. make every effort to provide an aCCurate, oBjeCtive, and neutral analysis. In order to highlight any Biases, we Clearly attriBute our data and findings. We will always present opinions from Company management as suCh. Our views are ours where stated. We do not try to ConvinCe or influenCe, only inform. We appreCiate your suggestions and feedBaCk. Write to us at [email protected] or find us on BloomBerg. INDEX ExeCutive summary . .3. Key finanCial data . .5. ReCent updates . .6. Trends and outlook . .7. Quarterly trends and results . .7. Business . .14. Business model . 1.4. Market and value Chain . .2.6. Competitors . .2.9. Strengths and weaknesses . 3. .2. HistoriCal results and finanCial statements . .3.3. InCome statement . .3.3. BalanCe sheet . .3.4. Cash flow statement . .3.5. HistoriCal performanCe . .3.5. Other information . .4. .3. News and topiCs . 4. .6. Company profile . .4.7. AZoom/ 3496 ResearCh Coverage Report By Shared ResearCh InC. | pdf.summary.Company_weBsite 2 ExeCutive summary Business overview AZoom uses information teChnology to put idle real estate to produCtive use. Its target properties are mainly parking lots rented on a monthly Basis. SinCe its inCeption, the Company has Built up a dataBase of information on availaBle monthly parking lots and their potential renters, whiCh it now uses to operate one of the most extensive online parking spaCe matChing systems in Japan with some 50,000 listings. Still, given that Japan has some 5mn parking spaCes availaBle, the Company has ample room to grow, and henCe, it Continues to expand its sCope of information in Both urBan and rural areas. AZoom generates around 98% of sales from the parking lot Business and provides two main serviCe types. With the Monthly Parking Lot IntroduCtion ServiCe (around 12% of sales in FY09/19), it matChes availaBle parking lots with people who wish to rent them. The Company earns Commissions when the introduCtion results in a rental agreement. With the Monthly Parking Lot SuBleasing ServiCe (around 85% of sales with 8,361 suBleased spaCes as of end-FY09/19), the Company leases parking lots from their owners and then suBleases them using its matChing system. The Company leverages its parking lot searCh weBsite (the online parking lot introduCtion serviCe) to inCrease the numBer of parking spaCes it Can introduCe. The site aCts as a marketplaCe for parking lots in Japan, providing appliCants with vaCanCy information. In the suBleasing serviCe, the Company guarantees the parking lot owners a Certain amount of rental inCome for the parking spaCes it leases. AZoom’s main sourCe of earnings is the differenCe Between the rental inCome paid to these owners and that reCeived from the renters (introduCed through its searCh weBsite). This sort of serviCe has expanded rapidly in reCent years to alleviate the proBlem of vaCanCies in parking lots, inCluding lots for Condo residents and Building parking lots ereCted to Conform to urBan planning requirements. (See the “Market and value Chain” seCtion.) AZoom’s property management system for its suBleasing serviCe differs from those of other Companies in a key way: it allows the Company to monitor the rental status of properties in detail through the duration of their ContraCts. Using the information on parking spaCes that are Currently vaCant and those that will BeCome vaCant, the Company tailors its sales efforts and effiCiently manages and prevents vaCanCies. The Company also taps into the information gathered through its searCh weBsite, and applies the Big data on parking lots throughout Japan and on registered users to optimize its property management system. SuCh data allows it to grasp parking-lot market priCes in target loCations and helps distinguish the Company’s suBleasing serviCe. Trends and outlook In FY09/20, the Company reported Consolidated sales of JPY3.8Bn (+39.8% YoY Compared to parent sales in FY09/19), operating profit of JPY224mn (+139.1% YoY), reCurring profit of JPY223mn (+135.5% YoY), and net inCome attriButaBle to owners of the parent of JPY139mn (+147.9% YoY). The expansion in sales was driven By an inCrease in the numBer of parking spaCes suBleased to end-users in the Monthly Parking Lot SuBleasing ServiCe as well as an inCrease in introduCtions in the Monthly Parking Lot IntroduCtion ServiCe. Operating profit Came in at 118.2% of the full-year foreCast thanks to a lull in Cost inCreases as the Company put a halt to new sales personnel hiring and suCCessfully Controlled overall expenses. For FY09/21, the Company foreCasts Consolidated sales of JPY4.8Bn (+25.8% YoY), operating profit of JPY450mn (+100.5% YoY), reCurring profit of JPY450mn (+101.6 YoY), and net inCome attriButaBle to owners of the parent of JPY288mn (+106.5% YoY). The Company aims to aChieve steady sales and profit growth in the reCurring-revenue Business By inCreasing leased parking spaCes under management and the numBer of spaCes suBleased to end-users in the Monthly Parking Lot SuBleasing ServiCe, the mainstay of the Idle Real Estate Utilization Business. The Company also expeCts a YoY improvement in OPM and looks to further strengthen its management Base and struCture. In terms of its growth strategy, the Company Continues to Believe three measures will drive growth: 1) inCreasing the quantity and quality of information in its parking lot dataBase; 2) further penetrating existing markets and expanding the operating area for the suBleasing serviCe; and 3) expanding the sCope of the Company’s Business through the Creation of Businesses that utilize other kinds of idle real estate than parking lots. Strengths and weaknesses Strengths ◤ Leverages teChnology to manage parking lots ◤ Maintains the trust of real estate management Companies AZoom/ 3496 ResearCh Coverage Report By Shared ResearCh InC. | pdf.summary.Company_weBsite 3 Weaknesses ◤ SuBleasing Business skewed toward Certain property types ◤ A shortage of IT personnel familiar with parking lot leasing ◤ Brand reCognition low Compared to real estate-related weBsites AZoom/ 3496 ResearCh Coverage Report By Shared ResearCh InC. | pdf.summary.Company_weBsite 4 Key finanCial data Income statement FY09/13 FY09/14 FY09/15 FY09/16 FY09/17 FY09/18 FY09/19 FY09/20 FY09/21 JPYmn) Parent Parent Parent Parent Parent Parent Parent Cons. Cons. Est. Sales YoY - % % % % % % % % Gross profit - - - - YoY - - - - % % % % - Gross profit margin - - - % % % % % - Operating profit - - - YoY - - - - - % % % % Operating profit margin - - - % % % % % % Recurring profit YoY - - - - - % % % % Recurring profit margin % % % % % % % % % Net income YoY - - - - - % % % % Net margin - - - - % % % % % Per-share data JPY Shares issued (year-end; '000 - EPS EPS (fully diluted) - - - - - - - - - Dividend per share - - - - - - - - - Book value per share - Balance sheet JPYmn) Cash and cash equivalents - - - - Total current assets - - - - Tangible fixed assets - - - - Investments and other assets - - - - Intangible assets - - - - Total assets - - - - Accounts payable - - - - Short-term debt - - - - Total current liabilities - - - - Long-term debt - - - - Total fixed liabilities - - - - Total liabilities - - - - Total net assets - - - Total liabilities and net assets - - - - Total interest-bearing debt - - - - Cash flow statement JPYmn) Cash flows from operating activities - - - - Cash flows from investing activities - - - - Cash flows from financing activities - - - - Financial ratios ROA RP-based) - - - % % % % % - ROE - - - - - % % % - Equity ratio - - - - % % % % - SourCe: Shared ResearCh Based on Company data; per-share data are adjusted for stoCk splits. Note: Figures may differ from Company materials due to differenCes in rounding methods. Note: The Company moved to Consolidated aCCounting in FY09/20. YoY Changes shown for projeCted FY09/20 results refleCt Comparisons of Consolidated results in FY09/20 with parent Company results in FY09/19. Note: The Company plans to Carry out a 2-for-1 stoCk split on FeBruary 1, 2021. AZoom/ 3496 ResearCh Coverage Report By Shared ResearCh InC. | pdf.summary.Company_weBsite 5 ReCent updates Q3 FY09/21 Report Update 2021-08-12 Shared ResearCh updated the report following interviews with AZoom Co., Ltd. Q3 FY09/21 Flash Update 2021-07-29 On July 29, 2021, AZoom Co., Ltd. announCed earnings results for Q3 FY09/21; see the results seCtion for details. 1H FY09/21 Report Update 2021-06-15 On June 15, 2021, Shared ResearCh updated the report following interviews with AZoom Co., Ltd. Planned Change in its largest shareholder / PurChase of its shares By Panorama InC / ExpeCted a Change in its largest shareholder 2021-05-13 On May 13, 2021, AZoom Co., Ltd. announCed a planned Change in its largest shareholder (a major shareholder) and the purChase of its shares By Panorama InC. On the same day, the Company announCed that it expeCted a Change in its largest shareholder (a major shareholder). The Company was informed By its largest shareholder (a major shareholder) Yoji Sugata, president and representative direCtor of the Company, that he planned to transfer 320,000 Company shares to Panorama InC.