Shimane Bank, Ltd. (7150) AI Stock Analysis

• Market Cap: ¥5.47B
• Dividend Yield: 2.01%
• Average Volume (3M): 12.84K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.84
• Revenue Growth: 11.86%
• EPS Growth: -29.73%
• Country: JP
• Employees: 316
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 19.81
• Shares Outstanding: 8,416,000
• 10 Day Avg. Volume: 18,220
• 30 Day Avg. Volume: 12,840
• PEG Ratio: 0.11
• Price to Book (P/B): 0.27
• Price to Sales (P/S): 0.43
• P/FCF Ratio: 4.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥702.00 ▲(26.26% Upside)
• Action: Downgraded Date: 02/10/26
• Date: Action: Downgraded 02/10/26

The score is driven primarily by stable but mid-tier financial performance (steady revenue and improving leverage/cash flow, but low net margin and moderate ROE). Technicals are supportive due to a clear uptrend, but overbought readings temper the outlook. Valuation is reasonable with a modest dividend yield.

Positive Factors

Consistent Revenue Growth

Shimane Bank's steady revenue growth, including a recent 2.88% uptick, indicates persistent loan and fee demand in its regional SME and retail markets. This recurring top-line expansion supports durable net interest income and fee streams, helping stabilize earnings and capital planning over a multi-month horizon.

High Gross Profit Margins

A gross profit margin reported above 100% reflects efficient cost management and strong spread capture on core intermediation. That margin buffer provides lasting protection against modest NIM compression or higher provisions, preserving operating earnings and enabling sustained reinvestment or dividend support over months.

Strong Free Cash Flow Conversion

Free cash flow converting to about 73% of net income demonstrates solid cash generation and conversion quality. This level of cash conversion supports dividends, strategic capex, and debt reduction without immediate capital raises, enhancing balance-sheet flexibility and funding optionality over the medium term.

Negative Factors

Relatively High Leverage

Although leverage has improved, a debt-to-equity ratio of 1.34 remains relatively high for a regional bank and increases sensitivity to interest-rate moves or localized credit stress. Elevated leverage can pressure capital buffers, constrain strategic investments, and limit dividend flexibility if credit conditions deteriorate.

Low Operating Cash Conversion

Operating cash flow covering only 26% of net income signals a gap between reported profits and cash realization. This weak operating cash conversion raises concerns about earnings quality and working-capital volatility, creating potential reliance on financing or asset sales to support operations during stress periods.

Modest Profitability / ROE

A net profit margin near 6.5% and reported ROE around 4.08% indicate modest profitability, limiting internal capital generation and shareholder returns. Persistently low returns reduce the bank's ability to accumulate reserves, fund technology or branch investments, and compete with more profitable peers without external capital.

Shimane Bank, Ltd. Business Overview & Revenue Model

Company Description

The Shimane Bank,Ltd. provides various banking products and services for individual and corporate customers in Japan. The company offers various deposit products; and loans, including car, card, education, housing, multipurpose, bill, certificate, and institutional loans, as well as bill discounts. It also provides whole life, personal annuity, medical, cancer, income security, disability, and fire insurance products; investment trusts; financial product brokerage; and Internet banking services. The company operates 33 branches. The Shimane Bank, Ltd. was incorporated in 1915 and is headquartered in Matsue, Japan.

How the Company Makes Money

Shimane Bank generates revenue primarily through interest income from loans provided to individuals and businesses. The bank funds these loans by taking deposits from customers, which typically pay lower interest rates than the loans it issues. Additionally, Shimane Bank earns fee-based income from various services, including transaction fees, asset management services, and advisory services for corporate clients. The bank may also engage in investment activities, generating revenue from securities and other financial instruments. Partnerships with local businesses and government entities help enhance its service offerings and expand its customer base, contributing to its overall earnings.

Shimane Bank, Ltd. Financial Statement Overview

Summary

Financial statements point to stability but only moderate profitability. Income statement shows consistent revenue growth and strong gross profit margin, but net margin is low (6.49%) and operating margins are still modest. Balance sheet leverage has improved, yet debt-to-equity remains relatively high (1.34) and ROE is moderate (4.08%). Cash flow improved with healthy free cash flow conversion, but operating cash flow to net income is low (0.26).

Income Statement

Shimane Bank, Ltd. has shown a consistent revenue growth rate over the past few years, with a notable increase of 2.88% in the most recent year. The gross profit margin remains strong and stable above 100%, indicating efficient cost management. However, the net profit margin is relatively low at 6.49%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have improved but are still modest, reflecting potential challenges in operational efficiency.

Balance Sheet

The bank's debt-to-equity ratio has improved from previous years, currently at 1.34, indicating a more balanced leverage position. However, it remains relatively high, which could pose risks if not managed carefully. The return on equity has shown improvement, reaching 4.08%, but still indicates moderate profitability. The equity ratio is stable, suggesting a solid asset base supported by equity.

Cash Flow

The cash flow situation has improved significantly, with a positive free cash flow growth rate. The operating cash flow to net income ratio is low at 0.26, indicating that cash generation from operations is not fully aligned with net income. The free cash flow to net income ratio is healthy at 72.76%, showing good cash conversion from profits.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	9.21B	9.39B	8.34B	7.32B	7.50B	7.46B
Gross Profit	9.21B	8.68B	7.83B	6.94B	7.12B	7.14B
EBITDA	667.00M	1.38B	1.09B	975.00M	844.00M	865.00M
Net Income	435.00M	609.00M	419.00M	418.00M	294.00M	357.00M
Balance Sheet
Total Assets	574.63B	568.78B	534.21B	503.76B	523.07B	529.03B
Cash, Cash Equivalents and Short-Term Investments	0.00	46.56B	33.59B	28.07B	46.79B	75.89B
Total Debt	20.06B	19.97B	18.03B	13.20B	35.28B	33.81B
Total Liabilities	559.88B	553.84B	515.54B	486.79B	509.02B	511.20B
Stockholders Equity	14.72B	14.92B	18.65B	16.96B	14.02B	17.81B
Cash Flow
Free Cash Flow	0.00	999.00M	4.13B	-27.92B	-19.36B	51.95B
Operating Cash Flow	0.00	1.37B	4.27B	-27.55B	-18.99B	52.05B
Investing Cash Flow	0.00	-5.38B	-794.00M	3.00B	-9.47B	-9.69B
Financing Cash Flow	0.00	35.91B	-173.00M	5.85B	-106.00M	-43.00M

Shimane Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 556.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7150, the sentiment is Positive. The current price of 556 is below the 20-day moving average (MA) of 630.85, below the 50-day MA of 575.44, and above the 200-day MA of 502.54, indicating a bullish trend. The MACD of 23.55 indicates Positive momentum. The RSI at 54.12 is Neutral, neither overbought nor oversold. The STOCH value of 31.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7150.

Shimane Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8349	72 Outperform	¥15.79B	10.02	―	3.58%	13.77%	19.08%
8563	69 Neutral	¥14.70B	10.03	―	3.74%	5.91%	5.03%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8416	65 Neutral	¥12.64B	2,611.42	―	2.74%	7.74%	-92.49%
7150	64 Neutral	¥5.47B	13.77	―	2.01%	11.86%	-29.73%
8383	64 Neutral	¥17.23B	9.79	―	3.30%	11.93%	36.32%
8562	53 Neutral	¥13.98B	77.16	―	1.89%	8.11%	68.98%