ENVALITH
株式会社九州リースサービス logo

KYUSHU LEASING SERVICE CO., LTD.

8596・Standard Market・Other Financing Business

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株式会社九州リースサービス logo
KYUSHU LEASING SERVICE CO., LTD.8596

Business

Kyushu Leasing Service Co., Ltd. was established in 1974 and has a history spanning more than 50 years since its founding, headquartered in Fukuoka as a comprehensive financial services company. With 9 consolidated subsidiaries and 2 affiliated companies, it operates across six segments: Lease & Installment Sales of machinery and equipment; Finance (money lending, Receivables Purchase, Credit Guarantee); Real Estate (rental, sales, and Investment in Anonymous Partnerships, etc.); Fee Business (insurance, Auto Lease Referral, etc.); and Environmental Solutions (Electricity Sales Business, LED rental). Its main base is Kyushu (Fukuoka, Okinawa, Kitakyushu, etc.), and it also has locations in Tokyo and Osaka (to be established in April 2026). Its main customers are corporate clients, primarily local mid-sized and small-to-medium enterprises, and it is working to expand its customer base through a capital and business alliance (May 2022) with Nishi-Nippon Financial Holdings.

Business Model

The company builds up operating assets such as leases, installment sales, loans, and rental real estate, establishing a foundation of stock-type revenue from interest income, lease payments, and rental income. This is combined with flow-type revenue from real estate sales and asset replacement, achieving both revenue stability and growth. As of the end of FY2026 (ending March 2026), the operating asset balance reached ¥205,656 million (up 8.0% from the end of the previous period), and the company manages funding costs by diversifying its financing sources across financial institution borrowings, corporate bonds, and commercial paper. It has obtained an A (Stable) rating from both JCR and R&I.

Company Strengths

Since its establishment in 1974, the company has built business relationships with local Kyushu companies over more than 50 years. In May 2022, it concluded a capital and business alliance with Nishi-Nippon Financial Holdings, and has been promoting the development of quality local customers by leveraging the latter's customer network. In FY2026 (ending March 2026), the company also recorded results from collaborative efforts on large-scale capital investment projects through this alliance.

The company combines Lease & Installment Sales (operating profit of ¥1,935 million), Real Estate (¥2,829 million), Finance (¥1,576 million), Environmental Solutions (¥261 million), and others, avoiding dependence on any single segment. In FY2026 (ending March 2026), even as revenue declined 8.9% year on year, operating profit increased 7.6% year on year to ¥6,083 million, marking a new record high.

The company has obtained a long-term issuer rating of A (Stable) from both the Japan Credit Rating Agency (JCR) and Rating and Investment Information, Inc. (R&I). In FY2026 (ending March 2026), it began utilizing commercial paper and issued its third unsecured corporate bond, diversifying its fundraising methods. It has achieved stable fundraising with an outstanding interest-bearing debt balance of ¥153,806 million while maintaining an average funding rate of 1.21% (as of the end of March 2026).

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales decreased 8.9% year on year to ¥35,838 million due to the drop-off of the prior period's large-scale, one-off Real Estate Sales revenue, among other factors. However, gross profit expanded from ¥8,987 million to ¥9,523 million, and the operating margin improved significantly from 14.4% to 17.0%. This is consistent with the company's shift toward prioritizing profit margins and ROE over quantitative metrics such as net sales (the company will discontinue disclosing net sales forecasts from FY2027 (ending March 2027) onward), and can be assessed as a qualitative improvement in the earnings structure.

As an external factor, the Bank of Japan's shift in monetary policy and the resulting rise in policy interest rates has contributed to expanding interest income in the Finance segment (net sales up 23.3% year on year in FY2026 (ending March 2026)). On the liabilities side, however, interest expenses increased from ¥87 million to ¥134 million year on year, and funding costs also expanded from ¥949 million to ¥1,390 million. The majority of total assets of ¥219,586 million consist of interest rate-sensitive assets and liabilities, so the skill of ALM management will be a key determinant of future earnings. Continued attention is warranted regarding the risk that rising funding costs could compress margins in a continued rate-hike environment.

In the Real Estate segment, net sales in FY2026 (ending March 2026) decreased 17.9% year on year due to the reversal of the prior period's large-scale, one-off sales revenue, and operating profit also declined 4.0%. Meanwhile, the balance of real estate for sale has been building up, reaching ¥13,369 million (up 42.4% from the previous fiscal year-end), and the structure in which performance fluctuates depending on the timing of sales continues. In addition, overseas investments in detached housing development in Indonesia and logistics facilities in Singapore have become equity-method affiliates (8 JPR JV PTE. LTD. and others), but the equity-method investment loss for FY2026 (ending March 2026) stood at ¥54 million, indicating the investments remain in a loss-recognition stage, with the timing and scale of future earnings contribution still unclear.

Growth Strategy

Toward the final year of "Kyōsō 2027," the Company aims to achieve net income of ¥4.2 billion and exceed its financial targets through a three-pillar strategy

Through deepening collaboration with Nishi-Nippon Financial Holdings, the Company is promoting the cultivation of high-quality local customers and joint initiatives for large-scale capital investment projects. Through the accumulation of finance transactions in the Kyushu and Kanto areas and asset replacement focused on profitability, the Company achieved an operating asset balance of ¥205,656 million (up 8.0% from the previous fiscal year-end). The Company plans to continue accumulating assets in FY2027 (ending March 2027).

The Company established KLI New Energy LLC to develop the Grid-Connected Battery Storage & FIP-Compatible Renewable Energy Business. It has also executed overseas investments in large-scale detached housing development in Indonesia and logistics facilities in Singapore. On April 3, 2026, the Company opened an Osaka branch, beginning its business expansion into the Kansai area. Overseas investments have currently recorded an equity-method investment loss of ¥54 million, and generating profitability from these investments remains a challenge going forward.

The Company is promoting the strengthening of its ALM framework and enhancing the effectiveness of risk management in light of the rising interest rate environment. It has diversified its funding sources through the commencement of commercial paper utilization and the issuance of its third unsecured corporate bond. The Company continues to invest in human capital, including DX promotion, career development support, and reskilling, thereby strengthening its organizational capabilities as a comprehensive financial services company.

During the period of the medium-term management plan, the Company's basic policy is to implement a progressive dividend, aiming for a consolidated DOE of 3.0% or higher to ensure stable dividends. The annual dividend for FY2026 (ending March 2026) is ¥58 per share (up ¥5 from the previous fiscal year), with a payout ratio of 33.4% and a dividend-to-net-assets ratio of 3.0%. For FY2027 (ending March 2027), the Company plans an annual dividend of ¥62 per share (up ¥4 from the previous fiscal year), clearly indicating the continuation of the progressive dividend policy.

Last updated: July 19, 2026