|WELLNET CORPORATION (2428)|
1-1-7 Uchisaiwaicho, Chiyodaku, Tokyo
* Stock price as of the close on March 16, 2017. Number of shares outstanding at the end of the most recent quarter excludes treasury shares.
EPS is the upper value in estimated range in FY June 2017.ROE and BPS are from the previous year.
*A 2 for 1 stock split was implemented on July 1, 2016.EPS and BPS are calculated retroactively
* Estimates are those of the Company.
With the key concepts of "real time" and "one stop," WELLNET offers a "convenient direct sales platform" to provide (1) its customers (i.e. the purchaser of service and goods) with the convenience of purchasing whatever they want at any time and from any place, and (2) its sales business operators (i.e. WELLNET's direct customers) with the capability of "maximizing sales opportunities" in selling products and services over the Internet.
The multiple payment service, which is WELLNET's core business, has been implemented by a wide range of clientele including major Japanese airlines and express bus companies, in addition to major mail-order businesses. Ever since its inception, WELLNET has endeavored to maintain the spirit of taking on new challenges which is engrained in its corporate DNA.
<Corporate History>WELLNET CORPORATION got its start as a subsidiary of a gas and fuel merchant called Ichitaka Takahashi Co., Ltd. in Hokkaido for the purpose of developing new businesses.
At the time of its inception, utility bill payment services at convenience stores had already begun. However the Company began preparations for the expansion of payment settlement services to include mail order catalog sales.
WELLNET developed an integrated seamless "convenience store consigned bill payment settlement service" that included the functions of printing and mailing of invoices, and bill payment information processing which could be used 24 hours a day, 365 days a year. This system quickly spread amongst product and service merchants because it was distributed free of charge and enabled them to dispense with making large outlays to develop their own payment settlement systems.
Furthermore, WELLNET developed a system that allows customers to avoid having to print out paper copies of invoices and allows for customers to make real time connections for electronic invoices and payments, which is the system currently used widely. The system's ability to eliminate development costs and to allow customers make electronic payment settlement connections with convenience stores and other payment outlets without the need to sign agreements has contributed to its strong reception and numerous implementations by airlines and bus companies, in addition to boosting WELLNET's earnings. In 2004, the Company listed its shares on the JASDAQ market.
Thereafter, WELLNET has expanded the provision of its "multiple payment service" to include large companies such as Amazon, Yahoo! Shopping, Yahoo! Auction, and low cost carrier (LCC) airlines. In addition, the Company has also focused its attention upon developing applications for the rapidly growing electronic ticket service market including the cellphone ticketing service, which has many good track records.
<Market Conditions>According to the Ministry of Economy, Trade and Industry's report entitled FY 2015 Research on Infrastructure Development in Japan's Information-based Economy Society (E-Commerce Market Survey) issued on June 14, 2016), the Japanese electronic commerce market (B to C) for consumers rose by 7.6% year-over-year to ¥13.8 trillion in 2015. Compound average growth rate (CAGR) from 2010 to 2015 is 12.1%.
<Business Description>With the key concepts of "real time" and "one stop," WELLNET offers a "convenient direct sales platform" to provide (1) its customers (i.e. the purchaser of service and goods) with the convenience of purchasing whatever they want at any time and from any place, and (2) its sales business operators (i.e. WELLNET's direct customers) with the their capability of "maximizing sales opportunities" in selling products and services over the Internet.
The business segment to be reported is only "payment settlement and authentication business." Till the term before the previous term, the business of WELLNET had been classified into "multi-payment," "online business," and "electronic authentication," and the sales of each segment had been disclosed. However, the announcement based on these segments has a risk of misleading investors, while the company's core business is the "payment settlement" and it is enriching peripheral services. Therefore, the company no longer uses these segments when disclosing sales.
The following section will introduce the primary services of WELLNET.
Multi-payment serviceIt becomes possible to electronically charge and settle payment on a real-time basis without using any written bills, just by creating a connection with WELLNET.
Business operators do not need to develop systems for connecting to various payment receiving institutions, such as convenience stores, banks, and post offices, or sign individual contracts.
<Advantages and Characteristics>
Business operators only have to offer data to WELLNET, after settlement transactions of purchasers and users. WELLNET explains payment methods to purchasers and users.
Since it is possible to electronically charge and obtain receipt information on a real-time basis without using any written bills, business operators can use the system instantly.
Even if purchase contents (amounts) are changed, the payment of the changed amount can be settled.
WELLNET provides modules for receiving information free of charge, and so system connection is easy.
WELLNET develops and operates cutting-edge settlement systems, and so business operators do not need to develop systems.
The service was launched in July 2000, and has been adopted by all of Japanese airliners, major express buses, major mail-order companies, etc.
The operation center offers payment settlement services 24 hours a day, every day, with the 24-hour manned monitoring system.
For paperless settlement, WELLNET has developed the largest infrastructure network in Japan.
Cash transfer serviceThis service allows merchants to use the Internet to efficiently make payments to customers for reasons such as refunds for cancellations. WELLNET operates a dedicated website that allows consumers to use an ID received from the merchant and to input their own bank account information for merchants to make payments to.
① Cash transfer service to the bank account
<Advantages and Characteristics>
The ability of consumers to input their own bank account information and automatic processing of this information allows merchants to reduce their work load by eliminating the need to input account information.
Increase customer satisfaction by allowing merchants to make payment of refunds within the same day.
Eliminates the need for merchants to develop their own refund systems.
Eliminates the need to retain bank account information of customers and reduces the risk of leakage of personal information.
② Cash receipt (Transfer) service at Convenience StoresAs with the Cash transfer service to the bank account, this service concerns refunds when consumers cancel an order from a merchant. Unlike the Cash transfer service to the bank account, this service requires no bank account.
The consumer inputs a cash pickup number and ID (provided by the merchant) into a Lawson convenience store "Loppi" multimedia terminal, which issues a cash exchange ticket, and this cash exchange ticket can be exchanged for cash at the register.
<Advantages and Characteristics>
Merchants can avoid risks related to possessing customer bank account data
Cost reduction due to no handing charges of postal transfers or bank transfers
Smooth refunds with no risk of errors in handling bank account information
Billing (Payment/Invoices at Convenience Stores) ServicesWELLNET's bar code payment invoice issuance system and accounts receivable recovery via convenience store consigned bill payment service. WELLNET's bar code payment invoice system available at convenience stores and post offices uses an internally developed payment receipt issuance and payment information processing software called "ConPay Kun" to allow merchants to easily print out invoices and receipts, easily process payment information and make ledger notes of payment receipt.
① Convenience store bill payment service
Payment information is transmitted on the next business day after the payment is made (For payment at post offices, two business days), and automatically makes ledger notes of the payment.
Currently, bills for mail order sales, fuel expenses, various membership fees, etc. can be paid in arrears using this system.
<Advantages and Characteristics>
Payments can be made 24 hours a day, 365 days a year at nationwide convenience stores (Available at 14 different convenience store chains as of December 2014), relieving bill paying customers from the need to rush to post offices and banks during normal business hours.
The packaged software "ConPay Kun" is provided free of charge, allowing merchants to begin operating the payment systems within short time after application.
Merchants can print out their own bill payment receipts, and avoid leakage of customer information because the payment information is based on numeric bar code information only.
② Consigned Invoice Issuance ServiceWELLNET provides total comprehensive bill payment issuance and payment settlement support services including consigned bar code invoice payment printing and mailing functions, payment confirmation, and payment ledger note.
In particular, its bill payment services are used commonly for payment of services that do not entail shipment of goods (gas bills, various membership fees).
In addition, automatic payment and other information receipt services (Invoice issuance, payment service packaged software "Tokoro Kun") are also provided.
Bus IT solution "Bus Mori!®"In Mar. 2001, WELLNET launched the service of enabling customers to buy a booked ticket for an inter-city express bus anytime 24 hours a day at a convenience store, for the first time in Japan. Since then, the company has concluded a contract with over 100 bus agencies, and issued bus tickets for several hundred routes. In the field of electronic tickets, the company has achieved some results and accumulated know-how to issue and authenticate electronic air tickets for cell phones and then tickets at Sapporo Dome, etc.
The culmination of the know-how is "Bus IT Project".
This is an innovative service that can considerably improve the convenience for both bus agencies and users. While users can search for and book a bus service to reach a destination at ease without fail, bus agencies manage inventory efficiently on a real-time basis, increase selling opportunities, and settlement payment without fail.
This service is composed of 2 systems: "Bus Mori! Concierge," which has been evolved considerably from "Bus Mori! NAVI," a smartphone app for displaying bus routes in a map and buying a ticket for bus users, and "Bus Mori! MONTA," a service of the real-time management of data on express bus reservations for bus agencies that use tablet terminals.
"Bus Mori! Concierge," Japan's first smartphone app for searching for and booking an express bus seat, buying its ticket, and getting on the bus, which increases the convenience of inter-city express busesAs for express bus tickets, it was common to book and buy tickets via the website of each bus agency or by telephone, but this service enabled customers to book and purchase an express bus ticket (while choosing a seat for some routes), change plans, and receive a refund, with simple operation.
Users can receive the latest news about express buses and push notifications when a deadline for payment draws near, while bus agencies can send directions to reach a bus stop.
In addition to tickets issued at convenience stores, electronic tickets which are displayed on the screen of smartphones are now available, resulting in significant improvement of user-friendliness because users can buy tickets anywhere and anytime 24 hours a day with their smartphones at hand.
Users can receive the latest news about express buses and push notifications when a deadline for payment draws near, while bus agencies can send directions to reach a bus stop.
As for the methods for authenticating electronic tickets, in addition to "Bus Mori! MONTA" which is an in-vehicle tablet terminal that has been already released, the company plans to add the function to authenticate tickets with "electronic punching" to "Bus Mori! Concierge" for bus agencies with no "authentication terminal" (scheduled in Dec. 2016). This will cover almost all the bus routes and therefore the number of routes where "electronic tickets" are acceptable will increase.
"Bus Mori! MONTA," a service of the real-time management of data on express bus reservations for bus agencies"Bus Mori! MONTA," which can manage inventory on a real-time basis based on mobile data communications, is characterized by the following functions. It would reduce the burdens on drivers and maximize selling opportunities.
① Electronic seat chart: User can check the reservations and vacant seats of buses currently in operation.
② Ticket sale: If a user who has not yet paid the fare gets on a bus, the fare for the user can be displayed.
③ Ticket confirmation and authentication: User can authenticate the tickets of users, handle them online, and update reservation information.
SUPERSUB" ServiceAn online ticket solution that provides one-stop, comprehensive services ranging from ticket issuance, payment, and authentication functions.
This system eliminates the need for merchants to develop individual systems that connect to servers, allowing for easy use by not only merchants but also individuals holding events.
This system was launched in June 2012 aiming at increasing the number of customers, in addition to the existing large clients such as airlines and bus companies, based on its efficient and low-cost strategy.
<Advantages and Characteristics>
Event organizers can create web pages for their events as to their ticket reservation, application and sales, simply by entering basic information relating to the events such as ticket pricing, location, date of the event, etc. into the registration page (Currently only available to PCs).
Simply linking the above web pages to the organizer's event page will enable the launch of ticket sales.
Customers seeking to participate in an event can purchase tickets via PCs, smartphones, and cellular telephones.
Both e-tickets and paper tickets printed at convenience stores can be used. The tickets use QR codes and special applications will be used for authentication of these codes for entry to events. The system allows for smooth operations at events through accurate authentication. It is also possible to use just paper tickets, in which case the authentication application is unnecessary.
Similar to multiple payment services, this service provides a multitude of various payment settlement methods.
The system can be launched within three weeks from application for ticket through installment of the system to the sales of tickets.
There are no initial costs or basic monthly fees. In exchange, a commission of 5% of ticket sales is collected to help keep operational costs extremely low.
<Characteristics and Strengths>
① Strong Track Record of Implementations, Strong Customer BaseWELLNET's multiple payment service has developed a highly favorable reputation for its ability to eliminate development expenses at the time of their implementation and the need to form contracts with each payment institution. WELLNET's service has been introduced to the leading companies in each industry as described below.
One of WELLNET's largest assets is the highly favorable reputation received from airlines and bus companies for their system's real time capabilities.
It is this strong customer base that lies at the core of its highly favorable reputation, which is considered to be an important "invisible asset".
② Corporate DNA: Always Taking on New ChallengesE-Billing Service, Billing Service, various money transfer services, cellular telephone ticket service and other services and systems developed by WELLNET, in almost all the cases, represent the first applications of their kind to be commercialized within Japan.
Furthermore, the above implementation examples of systems are validation of their superiority. As WELLNET is not an affiliate or subsidiary of a large company, it started out without large amounts of business resources, including money, people and assets.
Despite this fact, the spirit of "always taking on new challenges" engrained in the corporate DNA of WELLNET allowed it to become the "de facto standard setter" in electronic bill payments.
President Miyazawa believes that the meaning and appeal of business is "to continue to believe in your own ability, to envision and take on the risk of developing mechanisms that would be convenient to have, and to provide them in tangible, readily available forms."
Moreover, in our interview, Mr. Miyazawa also said that "the reason for our Company to exist is to come up with systems that only we can create."
Since WELLNET is a small company with less than 100 employees, keeping up the spirit of taking on new challenges engrained in its corporate DNA and the ideal represented in its corporate principle of "WELLNET Arete" (which will be described later) seem to be vital to the company's existence.
|1H of Fiscal Year June 2017 Earnings Results|
Sales grew, but profit declinedSales were 5.3 billion yen, up 5.1% year on year, thanks to the continuous expansion of the non-face-to-face payment market.
Operating profit was 798 million yen, down 27.5% year on year. In addition to the decrease in gross profit because the cost rate increased due to review of the transaction conditions for transactions with the major clients. Selling, general and administrative expenses rose, including capital expenditures at the Sapporo office which plays a role in system development and operation, costs for developing a system to bring the level of human resources up, and costs for promotional activities in the "Bus IT Project" for "Bus Mori! Concierge," a smartphone app for users.
Wellnet propelled cost control, and therefore, both sales and operating profit were nearly equal to the estimated values.
As for the written notice of correction dated Apr. 27, 2015 given by the Tokyo Regional Taxation Bureau, Wellnet filed a request for examination to the National Tax Tribunal, and because it was notified through the written notice of decision dated Sept. 8, 2016 that the company would receive a refund, the company booked 88 million yen, the consumption tax of the past fiscal years, as non-operating income and reversed an amount of 39 million yen of the provision for contingent loss.
As for liabilities, current liabilities augmented ¥2.1 billion from the end of the previous term, due to the increase in the amount of settlement deposits, etc. Total liabilities, too, increased ¥2 billion.
As treasury shares decreased ¥100 million from the end of the previous term and retained earnings dropped ¥100 million, net assets were ¥8.4 billion which is almost equal to those in the previous term.
As a result, capital-to-asset ratio declined by 3.7% from 40.0% at the end of the previous term to 36.3%.
(If, however, the above-mentioned settlement deposits are deducted from assets and liabilities, capital-to-asset ratio becomes 75.0%.)
The margin of negative investing CF dropped due to the increases in income from the redemption of securities, etc. and free CF grew further. In the current term, because the company did not obtain any treasury shares, although some were acquired in the previous term, the negative margin of financing CF shrank.
The cash position improved.
(3) TopicsIn Oct. 2016, "Internet DE Transfer Service" was employed as means of payment of the purchasing amount to the users of the "ZOZOTOWN used designer clothes purchase service" offered by Crown Jewel, Inc. (President: Takahiro Miyazawa, Headquarters: Shibuya-ku, Tokyo).
◎ Adoption of "Internet DE Transfer Service" in "ZOZOTOWN used designer clothes purchase service" of Crown Jewel, Inc.
(Outline of the service)
For the clients, tasks related to wire transfer, which traditionally was managed manually, are streamlined and tasks "to ask returning of a transferred amount" which occurred when a bank account provided by a user was incorrect, etc. can be avoided.
The convenience for users is enhanced, as purchasing amounts will be immediately transferred to their bank accounts on the day on which a purchase order is made at the earliest as long as the order is made within the business hours of banks.
◎ Introduction of "smartphone tickets" by JR bus companiesIn Dec. 2016, "Bus Mori! Concierge," a smartphone app for booking an express bus seat, buying its ticket, and getting on the bus, was introduced by JR Bus Group to its website for express bus seat reservation "Express Bus Net," enabling users to get on JR buses with "smartphone tickets."
(Outline of the service)
Traditionally, paper tickets have been used for express buses; however, this service allows users to get on express buses by mere display of smartphone tickets, and it is possible to authenticate a smartphone ticket via the QR code displayed on it with the in-vehicle tablet terminal used by each bus agency. As of March, out of 144 routes which have adopted "Bus Mori! Concierge," smartphone tickets are accepted on 85 routes.
◎ Provision of "Multiple payment services" and "Transfer service" was started in the online train booking service of JR West and JR Kyushu.Provision of the "Multiple payment services" and the "Transfer service" is scheduled to start in the spring of 2017 in the online train booking service offered by West Japan Railway Company and JR Kyushu Railway Company.
This enables not only payment at major convenience stores and banks throughout Japan but also procedures for refund directly via the online train booking service concerning tickets purchased by cash.
The introduction of the services is the first attempt for all the JR railway companies.
(Outline of the services)
Thanks to the introduction of the "Multiple payment services," "J-WEST online members" of JR West and "JR Kyushu Web members" for shinkansen and limited express trains whose seats can be booked through the respective online train booking services of JR West and JR Kyushu can, besides traditional means of payment by credit card, make payment at convenience stores and banks all over Japan. After completion of payment, users can receive tickets through the ticket machines specified by JR West and JR Kyushu, respectively.
Moreover, regarding cancellation made by a user in the online train booking service, the introduction of the "Transfer service" will reduce the burdens of counter services of railway companies as well as allow expeditious refund when the user chooses refund by bank transfer or at convenience stores.
|Fiscal Year June 2017 Earnings Estimates|
Earnings forecast is unchanged. Although sales will increase, profit will drop due to prior investment such as promotional expenses.Earnings forecast remains unchanged. Sales will grow thanks to the continuing expansion of the non-face-to-face settlement market; however, profit is estimated to decrease due to proactive promotional activities in the "Bus IT Project" for "Bus Mori! Concierge," a smartphone app for users.
As for dividends, payout ratio is set at 50% or over while considering the stock split in Jul. 2016, and even if dividend per share is less than ¥50, the company plans to increase it by ¥10/share to ¥50/share.
|Interview with President Miyazawa|
Q: "How much progress have you made with the 'Bus IT Project'?"
A: "We are focusing on promoting 'Bus Mori! Concierge.' The number of routes that adopt the service is growing steadily."Whether or not this business can be successful depends on how many users download the smartphone app, "Bus Mori! Concierge." Wellnet, therefore, devotes itself to promotional activities to improve the awareness of the app and itself.
In Oct. 2016, broadcasting of a FM radio program "BUSTALGIA" started. It is a program where a multitude of stories beginning with buses are delivered together with local information, focusing mainly on the bus routes that have employed "Bus Mori! Concierge."
Furthermore, the company has been engaged in various activities, including broadcasting of commercial messages on the Aurora Vision in front of BUSTA Shinjuku, posters at terminals and offices, and in regular-route buses of each bus agency, and insertion of leaflets.
With the aim of further improvement of user-friendliness for Chinese visitors to Japan, the company plans not only to start expanding its services for inbound tourists this spring, including making the services available in China UnionPay, Alipay, etc., but also to launch the service of electronic ticket punching by this fall.
Meanwhile, it became possible in December 2016 to get on buses that are operated by "JR Bus Group," the largest bus corporate group in Japan, with smartphone tickets, which indicates a steady growth in the number of bus agencies that have used the service. As of Mar. 2017, 144 bus routes accept boarding via "Bus Mori! Concierge" and we aim to increase the number of bus routes with the service to 200 in the current term.
In order to realize de fact standardization of smartphone tickets, we propel promotion and business activities targeting bus agencies.
Q: "Please tell us about your approaches to the market of university entrance examinations."
A: "We will continue to make efforts at online application services and enter the field of electronic settlement for admission procedures."Online application for university entrance exams is becoming more and more popular rapidly.
According to the survey conducted last September on 533 universities, in the entrance examinations in 2017, about 54% of the universities that have already adopted the online application system said that they would abolish the paper application system and shift completely to the online application one.
Although this field has fallen behind the trend of digitalization, "online application" will be the norm from now onward.
Wellnet actually has a large share in this field because it entered there at an early stage.
While striving on a continuous basis, we will not just stay in the field but focus on the field of electronic settlement for admission procedures after entrance examinations.
In short, we plan to offer a cloud service that provides a one-stop service pertinent to tasks ranging from announcement of examination results to payment of admission fees and tuition.
Three universities, including Tokai University, have already determined to introduce the service, and we will continuously expand the number of universities that use the service sequentially.
Because the need for improving operational efficiency is strong particularly in universities with a large number of students, we will make proactive approaches, targeting national universities.
We would like to pay attention to the progress in the Bus IT Project as well as how the company's business results will change in the third and fourth quarters.
|<Reference 1: Outline of the new 5-year mid-term managerial plan>|
OutlineWELLNET has made non-face-to-face settlements and related services the domain of the business, and with the know-how and outcomes accumulated in that domain, the company has expanded the business results. The non-face-to-face settlement market is expecting some level of growth, and so the company aims to continue developing and maintaining the current business scheme.
During the new 5-year mid-term managerial plan, the business environment surrounding WELLNET is expected to have massive changes, with the rapid development of FinTech and its implementation in addition to the beginning of the use and application of IoT. WELLNET has made active investments for turning this change into a new business opportunity, and aims to achieve an operating profit of ¥3 billion in the term ending Jun. 2019 and an operating profit of ¥5 billion in the term ending Jun. 2021, which is the last fiscal year of the mid-term plan.
Individual ProjectsThe mainstay of the WELLNET's current revenue is its real-time cash settlement, however seeing great potential in further expanding digital money and cashless settlements in the future, the company formulated the concept in 2011, and since then has worked on defining requirements and developing the digital money service, Shiharai-Hisho, which is scheduled to be released in Summer 2017.
A. FinTech Service - Shiharai-Hisho
Shiharai-Hisho, a smartphone app, controls digital money on a server, and has the following functions.
① Users can add electronic money from any of allied banks. It is also possible to add money from other payment receiving agencies.
② Automatic reminder function, so business operators do not need to remind people to pay via mail.
③ The reminder function of "Hisho" will prevent users from "forgetting to pay inadvertently," which leads to improvements in money collection rate.
In addition, multiple small payments can now be made for digital content and other material, which have not been cost-efficient until now. Likewise, one-click payment, in which there has been a growing need for, is also possible.
Furthermore, business operators in the domain of deferred payment will be able to cut costs for issuing invoices due to conventional paper invoices being switched to digital invoices.
Regarding the distribution of Shiharai-Hisho, the company will proceed with the following promotions and make major efforts to expand and spread the app.
① Appealing to business operators who have already installed WELLNET's settlement system.
② Joint operations with allied banks.
③ A new settlement method will appear on the payment method window (provided by WELLNET) used by consumers million times a month.
④ Active consumer-oriented promotion.
B. Bus IT ProjectThe company will actively develop, release, and promote "Bus Mori! Series," which is the core of the Bus IT Project.
The company released Bus Mori! MONTA, an in-vehicle terminal for authentication for intercity express buses, and in August 2016, they released a smartphone app, Bus Mori! Concierge, which is a heavily improved version of Bus Mori! NAVI.
Since the increase of consumers who know, download and use this application is an important factor in turning a profit, they actively promote Bus Mori! Concierge.
C. Open InnovationThe domain of WELLNET's business and related business has been undergoing a massive revolution with IoT, FinTech, etc., and at the same time there are growing business opportunities.
The company intends to implement measures to seize those opportunities.
Concretely, the company will strengthen the ties with universities, business entities and firms that possess expertise and technology to appropriately respond to these business opportunities.
① WELLNET has started collaborative research with Hokkaido University to develop and provide a platform that is safe and low-cost, utilizing blockchain technology. From now on, the company will deepen the relationship and produce concrete results. Moreover, once the company completes products that would become social infrastructure, such as the platform utilizing blockchain, the company will have a system where other firms and entities can openly participate, and have a role in contributing to society.
② Promote joint research which will contribute to bus businesses and community revitalization via the use and application of IT with the National Institute of Informatics and stimulate demand via big data utilization, yield management* and the visualization of route buses.
③ Make efforts in collaborating with enterprises which develop and maintain a peripheral settlement platform.
④ Security and Cost Performance are both important especially in financial services. An enormous sum of R&D expenditure is required to solve those issues, and so the company launched CVC, WELLNET Venture Capital, with the aim of making such investments.
Yield management is a sales strategy to maximize revenue per unit for hotels and airline companies (bus agencies in the WELLNET's case). It was introduced in Europe and the United States first, then made it to Japan in the latter half of the 1990s. By giving a massive discount rate for guest rooms and bus fare in order to just increase the occupancy and passenger rates, the yield (revenue) inevitably decreases. On the other hand, giving little discounts when demand is scarce leads to unsold seats. Thus, in order to secure maximum yield, it is necessary to look at past sales data and demand trends in detail to manage unit selling price and seat numbers offered.
D. Upgrading the Sapporo office which is in charge of the system foundationAfter reflecting on the large-scale failure that occurred in the previous term, WELLNET has improved the system of the Sapporo office. The company will make investments into it with the purpose of further making dynamic upgrades to it from this period onwards. The details are as follows.
① Upgrading skills
To improve the skills of employees at the Sapporo office by using aid from companies that have high technological capabilities and expertise.
To have 10 or more highly skilled engineers stationed in the Sapporo office, and establish a full-fledged quality management division. To implement practical training with WELLNET employees as one team, ranging from system development to infrastructure design and operations.
② Improving the infrastructure
The president held the position of managing director as well in the Sapporo office until the previous period, however he invited personnel with high technological capabilities, expertise and experience, increasing the number of executive members from one to three. Moreover, having consultants with adequate knowledge will ensure definite improvements and stable operation.
③ Cloud Migration
Considering that the conventional infrastructure development procedure is unable to cope with surges in traffic, in the 3-year plan, WELLNET will shift its focus to the Cloud which can offer flexible scale increase and carry out decentralized processing. In doing so, the company will aim for stable operation and the best cost performance.
E. Governance - conducting proper corporate activitiesWELLNET has established the following "WELLNET Arete" for representing company significance and behavioral policies for employees to aim for effective governance. Even if products change, the action philosophy that forms the foundation of the company will pass onto the employees.
(Arete in Greek, means "virtue", "prowess" and "excellence".)
|<Reference2: Regarding corporate governance>|
◎ Corporate Governance ReportThe company submitted a latest corporate governance report on September 27, 2016.
In "Corporate Governance" of the corporate profile in the website of WELLNET, "the policy for the corporate governance code" is disclosed.
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