STEP CO.,LTD. (9795) Stock Price

Step is an education company that operates cram schools and after-school childcare facilities, while also producing, printing, and binding educational materials. The company's core business consists of exam preparation tutoring services, childcare and after-school programs that provide daytime supervision, and in-house production and printing of educational materials supplied to its classrooms.

The primary customers are elementary through high school students and their parents, with tuition fees serving as the main revenue source. The company generates revenue from tuition in its cram school division, which includes material fees, while its after-school and childcare division secures stable income through usage fees. By keeping printing and distribution functions in-house, the company manages costs and ensures service stability.

Operations are divided into four main segments: elementary and middle school, high school, after-school and childcare, and educational material production and printing. The elementary and middle school division offers high school entrance exam courses for grades 5-9, the high school division provides university entrance exam courses for current students, and the after-school division implements programs including academics, physical activity, and shogi for grades 1-4. The childcare division operates as a corporate-sponsored facility accepting children of employees and local families, while the material production and printing division handles manuscript creation, printing, and distribution of materials used in classrooms.

The company aims to maintain a cost of sales ratio of approximately 70%, keep selling, general and administrative expenses at around 10%, and sustain an operating profit margin of approximately 20% as growth indicators. In the short term, the company is following its current policy of restraining new school openings and instead pursuing a strategy to increase student enrollment through improved occupancy rates via internal strengthening and adding classes at fully enrolled schools. Long term, the company aims to steadily expand its scale while maintaining teaching and operational quality by alternating between phases of internal strengthening and scale expansion every few years.

As priority investment areas, the company is concentrating resources on strengthening teaching capabilities and enhancing the quality of teaching materials and class operations. Specifically, the company is reinforcing instructor recruitment and training, implementing teaching methods that improve student performance and academic results, and conducting regular facility upgrades. The company leverages its in-house production of teaching materials and printing as a competitive advantage, implementing measures to protect teaching quality through cost control of printing and delivery and stable material supply. The company places importance on establishing a brand based on regional academic achievement records.

For new market development and business expansion, the company maintains its strategy of concentrating within Kanagawa Prefecture while planning to expand its classroom network to underdeveloped eastern, coastal, and southern districts including Kawasaki City and the Tsurumi, Naka, Minami, and Kanazawa wards of Yokohama City. While moving cautiously in the near term, the company will selectively open schools in high-demand areas and strengthen awareness and student recruitment by increasing the number of successful admissions to regional public high schools. Concurrently, the company plans to expand its after-school childcare business as a stable revenue source, strengthening its customer base through both after-school services and exam preparation instruction.

Regarding technological innovation, the company is advancing digitalization of class operations and grade management, strengthening individual support through the use of learning histories and test data. Specifically, the company is establishing a system to visualize each student's challenges through grade management system implementation and reflect these in instructional planning. Simultaneously, the company is investing in printing and teaching material production equipment to improve in-house operational efficiency, aiming to improve occupancy rates through enhanced classroom operational efficiency and seat management accuracy.