TOYAMACHIHO RAILROAD CO.,LTD. (E04128) Stock Price

Toyama Chiho Railway is a comprehensive transportation company centered in Toyama Prefecture, with railway, tramway, and bus operations as its core businesses. The company is a community-focused enterprise that operates transportation as its foundation while diversifying into real estate, construction, and hotel businesses. The group operates eight business divisions, including six subsidiaries and two equity-method affiliates, providing comprehensive services that support the region's essential infrastructure.

The company's primary customers are general residents and local corporations and municipalities in Toyama Prefecture, with stable fare revenue from public transportation serving as a key revenue pillar. In transportation operations, the company meets daily mobility needs through railway, tramway, and bus routes, while its real estate business generates rental and sales income from land utilization around stations. Through its community-rooted business approach, the company plays an important role in providing access transportation to the Tateyama Kurobe Alpine Route during peak tourism seasons.

Business segments are divided into eight divisions: transportation, real estate, construction, insurance agency, air transport agency, hotels, automotive maintenance, and other services. In transportation, Toyama Chiho Railway itself operates railway and tramway services, while coordinating with Kaetsu Noh Bus and Tateyama Kurobe Kanko to operate bus services. In real estate, the head office handles sales and rental operations, while Toyama Chiho Railway Construction manages construction projects. For hotels, three companies including Toyama Chiho Railway Hotel provide tourism and accommodation services.

Toyama Chiho Railway is undertaking a fundamental review of its business structure amid a challenging operating environment. The company will implement its first fare increase for rail services in 29 years in April 2025, and has stated its policy to clarify "the scope of management operations that can ensure business viability" for its railway operations, which continue to incur substantial losses. The company aims to make prompt decisions on its direction, including the option of discontinuing certain routes, and is requesting investment support from Toyama Prefecture and local municipalities along its lines based on the Toyama Regional Transportation Strategy.

The company's priority investment areas focus on capturing tourism demand while advancing infrastructure development. Following the 2025 Osaka-Kansai Expo and Toyama City's selection as one of the New York Times' "52 Places to Go in 2025," the company anticipates increased inbound demand from Europe and North America in addition to Asia. While maintaining the frequency and convenience of express trains to the Tateyama area, the company has adopted a differentiation strategy that reduces service during low-demand weekday daytime and weekend periods through revised operating intervals to improve financial performance. The company is also deploying new customer acquisition initiatives, including event train operations using wrapped trains and chartered services for railway enthusiasts. In its highway bus operations, the company is building a flexible operating system by scrutinizing profitability by route and considering seasonal-only operations and service restoration on high-performing routes. Additionally, the company is advancing the Toyama Station elevated grade separation project, targeting completion of the main line elevated section by the end of fiscal 2028, and expects increased ridership following improved accessibility upon completion.

Regarding technological innovation, the rail division has begun operating mobile fare collection boxes at Toyama Station, enabling smooth boarding and alighting and congestion relief during weekday morning rush hours. To address severe driver shortages, the company implemented timetable revisions in April and October 2024, shifting toward efficient timetable planning that reflects actual usage patterns, including reduced daytime service frequency and revised terminal points. The company aims to resolve chronic staffing shortages and improve financial performance simultaneously through diversifying driver work schedules and improving workplace conditions.