HEIAN CEREMONY SERVICE CO.,LTD.
2344・Standard Market・Services
Business
Heian Ceremony Service Co., Ltd. was founded in 1969 and is the core company of a ceremonial occasions group operating 53 funeral facilities and 2 wedding facilities, primarily in Kanagawa Prefecture and including Tokyo. With three consolidated subsidiaries (Heian Co., Ltd., Sandai Shoji Co., Ltd., and Sagami Life Service Co., Ltd.), the company centers its business on the funeral services segment (approximately 87% of net sales) while operating across five segments: mutual aid, nursing care, ceremonial occasions, and logistics. Its main customers are general individuals, mutual aid association members, and corporations, centered on the Shonan area of Kanagawa Prefecture. Under its management policy of "being of service to customers through wholehearted actions," the company provides community-based lifecycle services through weddings, funerals, and healthcare. It is listed on the Standard Market of the Tokyo Stock Exchange.
Business Model
Accounting for approximately 87% of net sales, the funeral services business generates revenue through the number of services performed multiplied by unit price per service. The mutual aid association business operated by consolidated subsidiary Heian Co., Ltd. earns brokerage revenue funded by advance receipts from prepaid specific transactions, representing a high-margin model (operating margin of 61.5%). Sandai Shoji strengthens cost management by internalizing intra-group logistics (catering and return gifts). The nursing care business secures stable nursing care fee income through rental housing for the elderly, group homes, and day services, and synergies are also functioning through the shared customer base with the funeral and mutual aid association businesses.
Company Strengths
The funeral services business achieved net sales of ¥9,192 million (up 5.8% year on year) and a segment operating margin of 28.5% in FY2025 (ended March 2025). Both the number of ceremonies conducted and the average revenue per ceremony rose simultaneously, and consolidated net sales expanded for five consecutive periods from ¥8,344 million in FY2021 to ¥10,598 million in FY2025, with operating profit rising from ¥920 million to ¥1,743 million over the same period.
The mutual aid association business operated by Heian Co., Ltd. recorded an operating margin of 61.5% (operating profit of ¥138 million) in FY2025 (ended March 2025). Securities and investment securities are accumulated as protected assets against advance receipts from prepaid specified transactions, with the resulting investment income recognized as non-operating income on a consolidated basis. Advance receipts recorded under fixed liabilities also serve as a leading indicator of stable future demand.
Showa Kaikan Takematsu opened in May 2024, followed by Showa Kaikan Kozu in September and Showa Kaikan Kitakamakura in November, with the three facilities together accounting for ¥399 million of the total capital expenditure of ¥807 million in FY2025 (ended March 2025). The company is pursuing a strategy of shifting from large-scale facilities to smaller, residence-style facilities, expanding the number of ceremonies conducted while reducing investment amounts.
ENVALITH's Perspective
Performance Trend
Over the past five fiscal years, financial results showed steady growth, with revenue rising from ¥8,344 million (FY2021) to ¥10,598 million (FY2025) and operating profit increasing from ¥920 million to ¥1,743 million. However, in the nine-month cumulative period of Q3 FY2026 (ending March 2026), revenue was ¥7,633 million (down 0.6% year-on-year) and operating profit was ¥1,059 million (down 2.6% year-on-year), both falling below the prior-year period. This was due to a combination of external factors, including a decline in the number of funeral services performed as the growth rate of deaths in key operating areas slowed, and increased costs from rising wages and prices. On the other hand, an increase in the average unit price per funeral service and a substantial rise in interest income received (up ¥47 million year-on-year) supported profitability, resulting in ordinary profit of ¥1,179 million (up 1.8% year-on-year) and net profit of ¥831 million (up 2.9% year-on-year), securing profit growth. The full-year earnings forecast (revenue of ¥10,982 million, operating profit of ¥1,888 million) remains unchanged.
Growth Strategy
Aiming for an operating profit margin of 17% or higher through a three-pronged approach combining new funeral service store openings, per-service price increases, and reinforcement of ancillary revenue
Through enhanced proposals for original products (Hanazono, memorial altars, memorial floral altars, musical funerals) and thorough consulting sales talk training for managers, sales have been maintained through unit price increases even as the number of services rendered declines. Cumulative Funeral Services revenue for the third quarter secured a 0.04% year-on-year increase, confirming the effectiveness of these measures.
Land acquisition and the opening of new Funeral Services stores resulted in a ¥228 million increase in tangible fixed assets (construction in progress: ¥552 million). The shift toward small-scale residence-type facilities aims to expand the number of services rendered and improve regional coverage. The consolidation of Hanaichirin Co., Ltd. also contributed to the expansion of business scale.
Cost ratio improvement through reconsideration of flower product procurement conditions, along with integration and efficiency gains in cross-departmental operations via call center function development, are being promoted. Cost of sales decreased by ¥18 million year-on-year (from ¥5,338 million to ¥5,319 million), reflecting the effects of these cost improvement measures in the figures.
From the first quarter, real estate rental income was reclassified into net sales, clarifying its positioning as an important revenue base. Under the policy that the importance of real estate rental income is increasing amid rising land prices, this change more appropriately reflects the actual state of the business while promoting revenue diversification.
While occupancy rate improvement is progressing for Rental Housing for the Elderly, operating profit for the cumulative third quarter remained at only ¥3 million (down 87.7% year-on-year) due to declining occupancy rates at Group Homes and upfront personnel cost investments associated with securing care managers. Contribution to profitability after securing personnel remains a future challenge.
Last updated: July 17, 2026