ENVALITH
株式会社城南進学研究社 logo

JOHNAN ACADEMIC PREPARATORY INSTITUTE,INC.

4720・Standard Market・Services

Official website
株式会社城南進学研究社 logo
JOHNAN ACADEMIC PREPARATORY INSTITUTE,INC.4720

Business

Johnan Educational Institute Co., Ltd. is a comprehensive education services company founded in 1961. It operates a diverse range of services including Johnan Kobetsu (Private Tutoring School), Kawaijuku Manavis (Video-based Lesson School), the Ringo Juku (Math-focused Private Tutoring) math school, nursery schools and infant/toddler classes, and the Dekitas (Online Learning Material) online learning material. Its main customer base spans a wide range from infants to university entrance exam candidates, and it delivers services through a combination of directly operated stores, franchises, and digital channels. It also operates a Sports Business (Kugahara Sports Club) under its umbrella, with the Education Business accounting for approximately 93.5% of net sales. The company is dual-listed on the Standard Market of the Tokyo Stock Exchange and, from April 2026, on the Main Board of the Sapporo Securities Exchange as well.

Business Model

The core of revenue consists of monthly-fee-based directly-operated schools/facilities (private tutoring, video-based lessons, nurseries, etc.) and franchise joining fees/royalty income. Added to this is a multi-layered structure that includes subscription-type license income from BtoB and BtoC channels for online learning materials such as Dekitas (Online Learning Material) and Suisen Labo (Comprehensive/School Recommendation Selection Prep Material). The company is working to improve profitability through consolidation of unprofitable school locations and fixed cost reductions driven by RPA and DX promotion.

Company Strengths

The company holds a group of services covering everyone from infants to university entrance exam candidates, including private tutoring, video-based lessons, nursery schools, infant classrooms, math classrooms, and digital learning materials. In FY2026 (ending March 2026), segment sales composition was diversified, with video-based lessons at 30.8%, children's education at 33.5%, and private tutoring (directly-operated + franchise) at 19.8%, resulting in low dependence on any single segment.

The company has introduced the "Kubota Method" childcare approach at all group nursery schools, establishing a differentiation point with strong appeal for infants aged 0. In May 2026, it made Kissho Co., Ltd. a subsidiary, among other M&A-driven nursery school expansions. Under the new medium-term management plan, the company plans to expand to 40–60 nursery schools over three years, positioning the Nursery School Business as its second earnings pillar after the tutoring school business.

In the previous consolidated fiscal year, the company completed the consolidation and closure of multiple unprofitable schools, achieving cost of sales of ¥4,268 million (down 4.1% year on year) and selling, general and administrative expenses of ¥1,274 million (down 9.0% year on year) in FY2026 (ending March 2026). Through personnel cost optimization via RPA utilization and DX promotion, along with a review of advertising expenses, operating profit turned around from a loss of ¥230 million in the previous period to a profit of ¥77 million.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) improved significantly to ¥77 million from an operating loss of ¥230 million in the prior period, but this was mainly driven by reductions in cost of sales (from ¥4,454 million in the prior period to ¥4,269 million in the current period) and compression of SG&A expenses (from ¥1,401 million in the prior period to ¥1,274 million in the current period), while revenue remained essentially flat (¥5,621 million, down 0.1% year on year). Net income attributable to owners of the parent was only ¥4 million, weighed down by the recognition of ¥93 million in impairment losses, indicating that a substantive recovery in earnings power has not yet been achieved.

In FY2026 (ending March 2026) as well, the Education Business recorded ¥93 million in impairment losses (versus ¥110 million in the prior period), marking large-scale impairments for two consecutive periods. While the consolidation of unprofitable school locations is progressing, concerns over the profitability of fixed assets remain. With an equity ratio of 27.2% and net assets per share of ¥173.26, financial flexibility is limited, requiring cautious capital management to balance this with aggressive investments including nursery school M&A.

The full-year forecast for FY2027 (ending March 2027) presents an aggressive plan with revenue of ¥5,731 million (up 2.0% year on year) and operating profit of ¥142 million (up 83.7% year on year), while the first-half cumulative figures are projected at revenue of ¥2,918 million (down 2.2% year on year) and operating profit of ¥68 million (down 37.5% year on year), indicating an expected decline in both revenue and profit in the first half. This structure reflects upfront launch costs for new initiatives such as nursery school M&A and the opening of "Gakken Koto Gakuin," making the concentration of earnings in the second half key to achieving the plan. As for the external environment, the ongoing decline in the birthrate continues to exert downward pressure on the market, but the rise in school non-attendance and growing demand for AI-based education could serve as tailwinds for new services.

Growth Strategy

The company is transforming its earnings structure through three pillars: nursery school expansion, Ringo Juku (Math-focused Private Tutoring) alliances, and deepening of tutoring school differentiation

The company licenses out Ringo Juku (Math-focused Private Tutoring), a math-focused private tutoring service, through alliances with other companies, expanding its business scale with low capital investment while addressing the social issue of developing science and technology talent. In FY2026 (ending March 2026), the number of new license agreements settled somewhat, but the initiative remains positioned as a key strategy under the new medium-term management plan.

The company is actively expanding the number of nursery schools through M&A, centered on a differentiated model in which the "Kubota Method of Childcare" is introduced at all nursery schools. In May 2026, it made Kissho Co., Ltd. (operating 4 small-scale nursery schools) a wholly owned subsidiary, and the new medium-term plan targets expansion to 40–60 nursery schools over three years.

The company has introduced Suisen Labo (Comprehensive/School Recommendation Selection Prep Material), a tool for comprehensive and school recommendation-type selection preparation, at its private tutoring school Johnan Kobetsu (Private Tutoring School), transforming it into a school focused on admission results. It is also promoting the opening of "Gakken Senior High School," a correspondence-based support school co-located with Johnan Kobetsu (Private Tutoring School), to expand its business supporting students who do not attend school.

The number of new contracts continues to increase for Dekitas (Online Learning Material), an online learning material, and Suisen Labo (Comprehensive/School Recommendation Selection Prep Material), a web application for recommendation-selection preparation, and the company aims to build up stable subscription revenue by expanding BtoB sales channels. In FY2026 (ending March 2026), sales in the Digital Materials & Solutions segment grew to ¥333 million (up 9.9% year on year).

The company consolidated multiple unprofitable classrooms during the previous fiscal year, significantly reducing cost of sales to ¥4,269 million (from ¥4,454 million in the previous fiscal year) and selling, general and administrative expenses to ¥1,274 million (from ¥1,401 million in the previous fiscal year). This was the main driver of the return to operating profit in FY2026 (ending March 2026), with the effects of fixed cost reductions becoming apparent.

Last updated: July 19, 2026