NS Group, Inc.

Business Details

The Rent Guarantee Service business operated by consolidated subsidiary Nihon Safety Co., Ltd. is the company's sole business segment. It centers on the "Rent Guarantee Service," which acts as a joint guarantor for tenants and guarantees rent and other payments, and the "Collection Agency Service," which handles rent collection on behalf of landlords. The company's strength lies in its deep relationships with mid-sized and small (Small segment) real estate management companies that manage relatively fewer properties, and it covers a wide range of property categories including residential, commercial, and other uses. Both new guarantee fees and renewal guarantee fees increased year on year, and the accumulation of stock-type recurring revenue continues.

Recent Overview

Q1 FY2026 (ending December 2026) started strongly, with operating revenue up 12.6% and operating profit up 18.7%

In Q1 FY2026 (ending December 2026) (January to March 2026), the company achieved operating revenue of ¥7,942 million (up 12.6% year on year), operating profit of ¥2,956 million (up 18.7% year on year), and quarterly profit attributable to owners of parent of ¥1,965 million (up 28.3% year on year). Profit growth was also aided by the absence of ¥140 million in listing-related expenses that had been recorded in the same period of the previous year. On the cost side, employee benefit expenses rose to ¥1,507 million (up 7.9% year on year) and commission fees paid rose to ¥1,342 million (up 12.0% year on year), while bad debt-related expenses were kept in check at ¥852 million (down 1.0% year on year). The company added a convenience store payment function and enhanced online procedure functions for tenants. The full-year earnings forecast remains unchanged from the figures announced on February 13, 2026.

Key Products

Growth Drivers

• Expansion of rental demand driven by increasing numbers of single-person and foreign national households
• Increase in new guarantee fees driven by rising average rent levels amid inflation
• Stable growth from the accumulation of stock-type recurring revenue from renewal guarantee fees
• Strong growth in other sales, including collection agency fees (up 33.4% year on year in Q1 FY2026, ending December 2026)
• Rapid expansion in the commercial guarantee field (amid a business environment where securing security deposits has become difficult post-COVID-19)
• Deep relationships and distinctive positioning with real estate management companies in the Small segment (managing 1,250 units or fewer)
• Improved screening accuracy and process efficiency through the introduction of an AI screening model
• Enhanced convenience for tenants through strengthened digital services (convenience store payments, online procedures)
• Expected demand expansion from the certified rent guarantee system implemented in October 2025

Risks

• Risk of bad debt and uncollectible receivables (collection risk associated with a broad screening approval policy)
• Impact on sales commissions and market share from intensifying competition with competitors
• Risk of economic fluctuations in the rental real estate market and rising vacancy rates
• Risk of regulatory changes (Civil Code amendments, revisions to laws related to housing for those requiring consideration, etc.)
• Increased costs and impact on profitability associated with staff expansion
• Uncertainty over the outlook due to the impact of trade policies in various countries and the situation in the Middle East, among other factors
• Ongoing cost burden of management fees (paid to Bain Capital and others)
• Risk of dependence on AI and DX systems and data security risk
• Risk of profit pressure from increased financial expenses (¥145 million in Q1 FY2026, ending December 2026, versus ¥130 million in the same period of the prior year)