Nagase Brothers Inc.

Business Details

The company operates an education business primarily targeting high school students through Tōshin High School (96 directly operated schools), Tōshin Satellite Preparatory School (920 franchise schools), Waseda Juku (12 schools), and others. Backed by AI-driven personalized learning content and a full lineup of university-specific mock exams (69 sessions across the most universities in Japan, 12 universities), the segment boasts strong track records of admission to highly competitive universities. Its nationwide reach through a franchise network is a distinguishing feature, and it is the core segment accounting for more than half of the group's total revenue and profit.

Recent Overview

Mid-term student numbers exceeded the prior year, achieving substantial growth in both revenue and profit.

Full-year segment revenue for FY2026 (ending March 2026) was ¥30,068 million (up 9.9% year on year), and segment profit was ¥5,747 million (up 23.0% year on year). In addition to mid-term student numbers exceeding the prior year, new enrollments grew in the February-March new academic year recruitment period backed by strong admission results, resulting in a year-on-year revenue increase of ¥2,711 million. The number of students gaining direct admission to the University of Tokyo reached a company record of 906. In July 2025, the Tōshin High School Kachidoki-ekijō school newly opened, and the Shimokitazawa, Ichigaya, and Kawagoe schools relocated to new facilities, enhancing the learning environment.

Key Products

Growth Drivers

• Revenue growth driven by the year-on-year excess in mid-term student numbers and growth in new enrollments for the new academic year's student recruitment
• Enhanced academic performance results and improved student acquisition capability through the evolution of AI-driven personalized content (such as the university-specific unit/genre practice courses)
• Differentiation and brand strengthening through strong admission results, including a company record of 906 students gaining direct admission to the University of Tokyo
• Enhanced learning environment through new school openings (the Tōshin High School Kachidoki-ekijō school in July 2025) and relocation/improvement of existing school facilities
• Differentiation and improved student retention through expanded university-specific mock exams (69 sessions across the most universities in Japan, 12 universities)
• Capturing new demand by responding to educational reforms, such as the addition of "Information I" to the 2025 Common Test for University Admissions
• Acquisition of a diverse student base through enhanced comprehensive and school-recommendation-based selection support at Waseda Juku

Risks

• The long-term declining trend in the high school student population due to the falling birthrate
• Intensifying competition from new entrants from other industries and rivals, leading to stricter selection by students and parents
• The impact on consolidated results of performance fluctuations at franchise schools (920 Tōshin Satellite Preparatory School franchises)
• Increased costs of responding to university entrance exam system reforms (such as the expansion of comprehensive and school-recommendation-based selection)
• Cost-increase pressure from rising personnel expenses due to wage base increases
• Increased expenses and pressure on profit margins from continuing proactive initiatives such as developing new mock exams