Kyoei Security Service Co.,Ltd.
7058・Standard Market・Services
Business
Kyoei Security Service Co., Ltd. is a security-services specialist founded in 1985, listed on the Tokyo Stock Exchange Standard Market (2019). The company provides a wide range of manned security services including Facility Security, Traffic Control & Event Security, Bodyguard services, parking lot operation and management, and building facility management. As of the end of FY2025 (ending July 2025), the group comprised 14 companies (9 consolidated subsidiaries and 3 non-consolidated subsidiaries, among others), with bases in 19 prefectures and business operations spanning 28 prefectures. Its main customers include government offices, joint government buildings, semiconductor manufacturing plants, commercial facilities, airports and other facility owners, as well as event organizers. The company also has a capital and business alliance with SECOM CO., LTD. (which holds 3.11% of its issued shares).
Business Model
Resident contracts (continuing contracts of one year or longer), which account for approximately 89% of sales, form a stable revenue base, with the remaining approximately 11% supplemented by temporary contracts. As a labor-intensive business in which personnel expenses account for the majority of cost of sales, strengthening bargaining power through scale expansion and fee revisions are the main means of improving profit margins. The structure involves expanding the number of security guards and coverage areas through M&A, and enhancing cost efficiency through intra-group reorganization. In the fiscal year ended July 2025, the gross profit margin improved from 22.3% to 23.2%.
Company Strengths
Since its first subsidiarization in 2015, the company had built a structure of 9 consolidated subsidiaries and 14 group companies by the end of FY2025 (ending July 2025). In January 2025, it successively made Neo Amenity Service Co., Ltd., Vanguard Co., Ltd., and China Security Guard Co., Ltd. wholly owned subsidiaries. Revenue increased approximately 64% over five years, from ¥6,184 million in FY2021 (ending July 2021) to ¥10,113 million in FY2025 (ending July 2025).
In FY2025 (ending July 2025), revenue from resident guard contracts was ¥8,987 million, accounting for approximately 89% of total revenue, forming a stable earnings base. Resident guard contracts also contribute to stabilizing security guard utilization, thereby reducing turnover and suppressing hiring costs; revenue increased by ¥649 million year on year due to new contracts commencing at public racing venues, joint government buildings, semiconductor manufacturing plants, and similar sites.
In May 2020, the company entered into a business and capital alliance with SECOM CO., LTD. SECOM CO., LTD. holds 3.11% of the company's issued shares and provides information and support related to sales and business operations. Combined with the rarity of being one of only 7 listed companies in Japan whose core business is security services, this gives the company a competitive advantage in both recruitment and sales.
ENVALITH's Perspective
Performance Trend
Revenue maintained an expansionary trend, rising from ¥6,184 million in FY2021 to ¥10,113 million in FY2025, reaching ¥11,583 million on a cumulative basis for the four quarters of FY2026 (fiscal year ending July 2026, 12 months). Operating profit had been sluggish, at ¥309 million in FY2024 and ¥485 million in FY2025, but improved substantially to ¥1,038 million (operating margin of 8.96%) on a cumulative four-quarter basis. The company turned around from a net loss of ¥39 million in FY2025—caused by goodwill impairment and other factors—to a cumulative net profit of ¥643 million over the four quarters. The improvement stems from a combination of factors: higher unit prices from contract fee revisions, contributions from two newly consolidated subsidiaries, and temporary contract revenue (¥1,557 million) related to the "2025 Osaka-Kansai Expo." As an external factor, robust demand for traffic control security amid rising construction and infrastructure demand has also provided a tailwind.
Growth Strategy
Pursuing simultaneous scale expansion and profitability enhancement through group growth via M&A and deeper group management
In the cumulative Q4 period, Dentsu Traffic Co., Ltd. and Joso Security Guard Co., Ltd. were newly consolidated. Synergies are being created through shared customer bases and restructured business locations, aiming to expand the scale of net sales and profit. Building a platform covering all 47 prefectures is a long-term goal.
Consolidated subsidiaries KSS Co., Ltd. and Neo Amenity Service Co., Ltd. will be merged by absorption effective July 1, 2026, unifying the security system for the Tokyo metropolitan area. This will establish a framework for providing rapid, large-scale security services to customers throughout the Kanto region, reducing administrative costs and concentrating sales capabilities.
Amid rising labor costs, contract fee revisions for stationed security contracts are being continuously implemented to raise the average unit price of sales. The operating margin for the cumulative Q4 period improved significantly year-on-year to 8.96%, confirming that the fee revision effect is contributing to improved profitability.
A management-function subsidiary was established to centrally manage assets held by group companies, and the accounting policy was changed to record real estate leasing income within net sales and cost of sales. This promotes effective utilization of group-held assets and develops revenue sources outside the Security Business.
Last updated: July 17, 2026