Weathernews Inc. (MV $320m): World’s #1 Weather Information Services Company
ROE 27.2% and trading at EV/EBIT 9x, EV/EBITDA 7.5x
Weathernews Inc (TYO: 4825) is the CNN/Bloomberg of weather as the world’s largest and most comprehensive private weather information services company, providing customized mission-critical weather information with a recurring-income “toll-gate” business model to help its worldwide customers to access accurate and timely weather information to make better decisions in a world with abnormal weather accelerating. In its B2B business (57% of sales), Weathernews provides Total Fleet Management Service (TFMS) with optimal ship routing, performance monitoring, safety status monitoring for over 2,000 shipping companies from 31 offices around the world and commands a 90% domestic market share and 35% global market share (7,000/20,000 vessels). The B2B business also helps multiple industries that range from sea (shipping, fishery, oil & gas) to land (road management, railway, logistics, retail, local government) and sky (aviation). In its B2S business (43% of sales), Weathernews designs and produces weather programs for radio, TV, digital media, including digital signage with original weather content for train stations, airports, elevators building lobbies, vending machines and restrooms. Weathernews provides content for over 90 commercial broadcasting stations in Japan (80% share of the Japanese market) and for over 200 cable television station in Japan reaching 15 million households, as well as for Hong Kong and Taiwan satellite broadcasts. The B2S business also co-creates user-generated and crowdsourced weather information for its 20m users/”supporters”, of which 2.5m pay around US$2-3 per month for premium version of the service. Weathernews was established in 1986 by Hiro Ishibashi after an MBO of the Japan office of US Oceanroutes and the former parent was acquired by Weathernews in 1993. Weathernews was listed on Jasdaq in 2000 and was upgraded to the First Section of Tokyo Stock Exchange in 2003. The Ishibashi family and management owns 44.6% of the company.
1) What Makes It a Wide-Moat Business?
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