ENVALITH
株式会社京進 logo

KYOSHIN CO.,LTD.

4735・Standard Market・Services

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株式会社京進 logo
KYOSHIN CO.,LTD.4735

Business

Kyoshin Co., Ltd. was founded in 1975 in Kyoto as a private tutoring school and marked its 50th anniversary in 2025 as a comprehensive lifestyle services company. It operates three segments: the Tutoring School Business (group lessons, individual tutoring, franchises), the Language-Related Business (English conversation, Japanese language education, global education, international personnel exchange), and the Childcare & Nursing Care Business (nursery schools, after-school childcare, elderly housing, home visit care, day service, and food service). The company has numerous locations both domestically and overseas, providing services that accompany people throughout their lives, from early childhood to old age. It is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

In the Tutoring School Business, the company earns monthly tuition income from students and royalty income from franchise member schools. In the Language-Related Business, it earns tuition income from English conversation schools and Japanese language schools, as well as success-fee income from foreign talent placement. In the Childcare & Nursing Care Business, the main pillars are operation-contract income based on officially set prices from municipalities and usage-fee income from residents. Income based on officially set prices is highly stable due to its linkage with policy, and it underpins the revenue base of the group as a whole.

Company Strengths

In FY2025 (ending May 2025), sales in the Childcare & Nursing Care Business were ¥12,277 million (up 5.1% year on year), with segment profit of ¥846 million (up 1.4% year on year). Revenue from municipal outsourcing increased due to a rise in the official price schedule following the government's National Personnel Authority recommendation, while occupancy rates at elderly care facilities also remained high. The business has formed a stable revenue base functioning as social infrastructure.

Consolidated sales for FY2025 (ending May 2025) reached ¥26,455 million, marking a record high since the company's founding for the 9th consecutive fiscal period. From ¥23,654 million in FY2022 (ending May 2022), the company achieved sales growth of approximately 11.8% over three years. Expansion of the Childcare & Nursing Care Business has been the main driver, converting the structural societal shift of the declining birthrate and aging population into a business opportunity.

In the Japanese language education business, the average number of students during FY2025 (ending May 2025) was strong at 105.4% year on year. The company decided on a business partnership with an Indian government-affiliated institution and the establishment of a Nepal branch office, advancing its foreign talent placement business. In fiscal 2024, the Japanese language education division received the "Kansai Quality Award Bronze," externally certifying its quality advantage.

ENVALITH's Perspective

For Q1 FY2027 (ending February 2027) (March–May 2026), operating loss came to ¥346 million, ordinary loss to ¥363 million, and quarterly net loss attributable to owners of parent to ¥179 million, marking a sharp deterioration from the same period last year (operating profit of ¥208 million). The full-year forecast (operating profit of ¥785 million, net income of ¥200 million) has been left unchanged, but progress toward the operating profit target stood in negative territory at the end of Q1, meaning the company must generate over ¥1,131 million in combined operating profit across Q2–Q4. Even accounting for the stock-type nature of the tutoring school business and the seasonal skew of childcare subsidies, the hurdle to achieve this looks high.

At the end of Q1 FY2027 (ending February 2027), the equity ratio stood at 16.1% (down 1.6 percentage points from 17.7% at the end of the previous fiscal year), and total net assets came to ¥3,661 million (down ¥245 million from the previous fiscal year-end). Interest-bearing debt remains at an elevated level, with short-term borrowings of ¥3,700 million and long-term borrowings (including the current portion due within one year) of ¥4,396 million, and interest expenses of ¥58 million were incurred during the quarter. The Q1 loss reduced retained earnings to ¥3,590 million, warranting close attention to the potential impact on the company's financial base should losses widen over the full year.

Segment profit in the Childcare & Nursing Care Business, the group's sole profit-contributing segment, fell sharply to ¥151 million (down ¥429 million, or -73.9%, from ¥581 million in the same period last year). The company attributes this mainly to initial investment associated with new facility openings and a substantial increase in one-time payments for improving childcare worker compensation, describing the result as "within the initially assumed range." As an external factor, the structural expansion of nursing care demand driven by the declining birthrate and aging population is a tailwind, but rising labor cost pressure from chronic staff shortages is a challenge across the industry as a whole, and the timing and scale of any recruitment cost containment effects will be key to the full-year results.

Growth Strategy

Promote profitability improvement through structural reform and expansion of the nursing care and international talent businesses as twin drivers of growth

Continuing the consolidation of unprofitable locations and concentration of resources in growth areas. Promoting cost structure optimization through the shift to large-scale schools, and expanding high-value-added services leveraging the tailwind of effectively free public high school tuition. The number of students at the end of the first quarter of FY2027 (ending February 2027) exceeded the previous year's level, and strong spring enrollment is expected to contribute to profit accumulation from the second quarter onward.

Completed an absorption-type merger effective April 1, 2026, with Kyoshin Language Academy (KLA) as the surviving company. This achieves reduction of duplicate accounting and HR operations and facilitates the smooth transition to the new "Certified Japanese Language Education Institution" system. Full-year profit is expected to be recorded as the intake of international students recovers from the July intake onward.

Link Heart Co., Ltd., acquired in October 2025, will contribute to full-year results from FY2027 (ending February 2027) onward. In addition to maintaining a high occupancy rate at existing facilities, the business is expanding its revenue base through new store openings of the rehabilitation fitness brand "Pita Labo." The nursing care business plans to continue expanding in scale through M&A while benefiting from the structural demand growth driven by the declining birthrate and aging population as an external tailwind.

Newly opened "HOPPA Nagaokakyo" in April 2026, a private after-school club addressing the "first-grade wall" challenge faced by working parents. The business aims to cultivate this as a new revenue pillar for the childcare business, building a comprehensive childcare service framework in combination with the existing licensed nursery school business.

Significantly increased the one-time bonus for improving treatment of nursery school teachers in the first quarter of FY2027 (ending February 2027), aiming to improve employee satisfaction and prevent turnover. This is expected to contribute to future improvements in performance through reduced recruitment costs and enhanced service quality. The upfront costs incurred in the first quarter are said to be within the range anticipated in the initial plan.

Last updated: July 17, 2026