■AIAI Group ＜6557＞ Business Overview

2. Features and strengths

The strengths of the company's “AIAI Saniku Zone” are that its unique early childhood education program has received high praise, that it is being efficiently developed using a dominant strategy concentrated in Tokyo, Chiba, Kanagawa, and Osaka, that it has abundant know-how and achievements in the field of rehabilitation for preschoolers, where demand has increased in recent years, and that it has built a system to integrally provide the three “nurturing” of childcare, rehabilitation, and education within the company; the “AIAI Saniku Zone” There are cases where high productivity has been achieved through synergy effects. As a result of such characteristics and strengths, it boasts an overwhelming market share, especially in Chiba Prefecture, and it has become easier to obtain facility land/building rental information within Chiba Prefecture, making it an advantageous situation for hiring new graduate nursery teachers.

AIAI NURSERY is not simply a nursery school to take care of children, and in addition to installing original large playground equipment “AINI (AINI)” and large playground equipment “AINI BOX” (comprehensive athletic to improve children's motor ability) for rainy weather, they also set up dedicated study rooms at each facility to implement programs that enrich the senses related to numbers, shapes, letters, etc., so it aims to enhance active preschool learning as a “garden where children's talents grow.” Furthermore, “AINI BOX” won the 15th Kids Design Award in August 2021. Also, in terms of cost, it has been possible to reduce office work for nursery teachers, such as promoting paperless use with in-house systems. AIAI PLUS renewed its service content in April 2021, and a new development support program was launched as a “program expert” to support learning and exercise.

Also, the company's strengths in AIAI PLUS and AIAI VISIT rehabilitation services include the fact that it is the only company in the same industry that provides a unique rehabilitation program with integrated learning and exercise, that the procedure period that was generally supposed to take about 2 months until now can be shortened from an inquiry to a minimum of 2 weeks due to operations streamlined by DX, and evidence with developmental analysis functions utilizing AI (AIAI By comparing the developmental records of approximately 5,000 kindergarten children in NURSERY with big data, it is possible to provide rehabilitation with a degree of divergence between the development of the kindergarten children in question (visualizing the degree of divergence in development of children of the same age).

AIAI NURSERY will be monetized 3 to 4 years after establishment

3. Earnings characteristics

As a profit characteristic of authorized nursery schools, startup costs such as initial costs and recruitment costs generally precede when a new facility is established, and since the older age class (3 to 5 years old) does not meet capacity for several years after establishment, there is a tendency to be in the red due to low enrollment numbers and low enrollment rates. However, as children in the lower age class (0 to 2 years old) are repeatedly promoted as the number of years since establishment has passed, the number of people enrolled in the older age class increases, the enrollment rate also rises, and sales and gross profit increase. Then, after the 3rd to 4th year after establishment, it is said that it will be monetized (profitable) due to an increase in the number of enrolments and an increase in the enrollment rate.

The satisfaction rate (occupancy rate) of all AIAI NURSERY facilities temporarily declines because capacity increases with the opening of new facilities (as a general rule, the establishment of approved nursery schools is 4/1), but thereafter, the satisfaction rate also continues to rise as the number of children in kindergarten increases. Looking at recent changes in the number of kindergarten children by month and fulfillment rate from 2024/4 to 2024/9, the satisfaction rate was in the early 90% range due to the increase in capacity due to the opening of 5 new facilities, but after that, the satisfaction rate also showed an upward trend as the number of kindergarten children increased, and generally remained around 95% from the fall of 2024 onwards. Similarly, in 2024/4, the satisfaction rate temporarily declined due to the increase in capacity due to the opening of 3 new facilities, but after that, the satisfaction rate also showed an upward trend as the number of kindergarten children increased, and as of 2024/9, the number of kindergarten children exceeded 5,000 for the first time, and the satisfaction rate also rose to 95%. On the other hand, in terms of cost, expenses related to establishing new facilities increase in January to March and April to June before and after new establishment, and the cost rate rises, but then from July to September and October to December, the cost rate declines as the number of children in kindergarten increases and the satisfaction rate rises.

Furthermore, with regard to subsidy income related to authorized nursery schools, commission costs and operation subsidies (subsidies related to kindergarten children and nursery teachers, subsidies related to facility leasing, etc.) are recorded in sales, and subsidies related to facility establishment (subsidies with a fixed ratio to the investment amount newly established) are recorded as non-operating income. Also, with regard to expenses, expenses related to operation (labor costs and property costs related to the operation of a nursery school) are recorded as operating expenses, and expenses related to preparation for opening a facility are recorded as non-operating expenses. Therefore, it may be a factor of profit fluctuation due to an increase or decrease in the amount of subsidy income or a gap in the recording period. Since the company was founded, it has promoted the active establishment of AIAI NURSERY in order to build a profit base, so operating losses continued with costs ahead strategically, but due to an increase in the number of monetized gardens that have passed 3 to 4 years after establishment, etc., the overall operating surplus has been established from the 2nd quarter of the fiscal year ending 2023/3, and operating profit is expanding as sales increase.

Also, as a profit characteristic of AIAI PLUS, there are cases where it can be operated in the same building as AIAI NURSERY, and in addition to being able to reduce the investment amount compared to AIAI NURSERY, there are also advantages that lead to enhanced customer attraction and recruitment power, strategic staffing, etc. due to synergy effects due to attachment with AIAI NURSERY. Furthermore, as a general rule, AIAI NURSERY is established on 4/1, but since AIAI PLUS also has the flexibility to freely set the opening period, etc., AIAI PLUS has the characteristic that early monetization can be expected compared to AIAI NURSERY.

4. Key Metrics

Furthermore, as part of strengthening IR, the company began publishing monthly trends of major indicators on the company's website from 2024/11. As for the 2025/3 fiscal year, the number of AIAI NURSERY kindergarten children steadily increased from 4,891 in 2024/4, surpassed 5,000 for the first time in September, and reached 5,012 in October. The overall satisfaction rate was 93% in April, 95% from July to September, and rose to 96% in October. The average operating rate of AIAI PLUS (aggregation method changed from 2024/4) tends to decrease during long vacations such as summer vacation, etc., so although there are variations on a monthly basis, it has remained at a high level, recording 103.0% in July and 105.4% in September. There are variations in the number of visits supported since awareness is not high at present, but there is an upward trend from 541 in April, when full-scale development began, to 960 times in July, 992 times in September, and 959 times in October.

(Author: FISCO Visiting Analyst Masashi Mizuta Exhibition)