Shimane Bank, Ltd. (7150) AI Stock Analysis

• Market Cap: ¥4.40B
• Dividend Yield: 2.01%
• Average Volume (3M): 12.84K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.88
• 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: 0.00
• 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: 65 Neutral
• Price Target: ¥569.00 ▲(2.34% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by solid but not exceptional financial performance (stable growth and improving leverage/cash flow, but modest profitability) and an attractive valuation (low P/E with a dividend). These positives are partially offset by weak near-term technicals, with the stock trading below key short-term moving averages and showing subdued momentum.

Positive Factors

Revenue Growth & Gross Margin

Shimane Bank's consistent revenue growth and strong gross profit margin signal durable core-business performance driven by lending and fee activities. Over the medium term this supports stable interest and fee income, enables reinvestment in channels, and provides a buffer against cyclical slowdowns.

Improving Leverage Profile

The improved debt-to-equity ratio to 1.34 reflects a trend toward a more balanced capital structure, reducing solvency risk and increasing financial flexibility. Structurally, better leverage enhances capacity to fund lending and absorb shocks, supporting sustainable growth and lending operations.

Healthy Free Cash Flow Conversion

A free cash flow to net income ratio of ~72.8% indicates the bank converts profits into cash effectively, supporting dividend capacity, internal investment and balance sheet resilience. Over months this underpins capital allocation flexibility and reduces reliance on external financing.

Negative Factors

Low Net Profit Margin

A net margin of 6.49% points to modest profitability relative to capital employed. Persistently low margins constrain retained earnings, limit the bank's ability to build capital organically, and reduce the cushion against credit losses or higher funding costs, challenging long-term return improvement.

Weak Operating Cash Conversion

Operating cash flow at only ~26% of net income signals earnings quality issues where reported profits are not fully matched by cash inflows. Over time this may pressure liquidity, complicate funding for lending growth, and increase sensitivity to interest or credit shocks absent stronger cash generation.

Modest Return on Equity

An ROE of 4.08% remains low for a bank, implying limited shareholder returns and constrained ability to grow equity through retained earnings. Structurally this limits capital available for expansion or large lending initiatives and may pressure strategic options if profitability does not materially improve.

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 makes money primarily through banking intermediation and fee-based services. (1) Net interest income: The bank accepts deposits (a funding source) and extends loans to households and businesses; it earns interest on loans and other interest-earning assets and pays interest on deposits and other funding, with the spread (net interest margin) contributing to earnings. It may also earn interest on securities or other investments held as part of its balance-sheet management; the specific composition is null. (2) Fee and commission income: The bank earns service fees from transaction-related and advisory activities such as domestic remittances/transfers, account-related services, payment/settlement services, and other banking services; detailed fee categories are null. (3) Other income sources: Like many banks, it may generate gains/losses from the sale or valuation of securities, foreign-exchange or treasury activities, and other non-interest items, but specific materiality and breakdown are null. Key factors influencing earnings typically include local loan demand and credit quality (loan-loss provisions), funding costs, interest-rate conditions affecting net interest margins, and the performance of any securities portfolio; specific partnerships or named counterparties contributing materially are null.

Shimane Bank, Ltd. Financial Statement Overview

Summary

Income statement strength (70) is supported by consistent revenue growth and strong gross profit margin, but profitability remains modest (net margin 6.49%, improving but still moderate EBIT/EBITDA margins). Balance sheet (65) shows improving leverage (debt-to-equity 1.34) and better ROE (4.08%) but still moderate returns. Cash flow (60) is improving with healthy free-cash-flow conversion, though operating cash flow is weak versus net income (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	0.00	0.00	-27.92B	-19.36B	51.95B
Operating Cash Flow	0.00	0.00	0.00	-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: Negative
• Last Price: 556.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7150, the sentiment is Negative. The current price of 556 is below the 20-day moving average (MA) of 591.45, below the 50-day MA of 596.84, and above the 200-day MA of 512.04, indicating a neutral trend. The MACD of -19.98 indicates Positive momentum. The RSI at 35.37 is Neutral, neither overbought nor oversold. The STOCH value of 14.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7150.

Shimane Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8365	66 Neutral	¥12.48B	21.28	―	2.68%	5.57%	-23.26%
8563	66 Neutral	¥12.72B	7.04	―	3.74%	5.91%	5.03%
7150	65 Neutral	¥4.40B	6.44	―	2.01%	11.86%	-29.73%
8416	65 Neutral	¥10.55B	8.64	―	2.74%	7.74%	-92.49%
8383	64 Neutral	¥16.22B	4.33	―	3.30%	11.93%	36.32%
8562	53 Neutral	¥12.76B	8.11	―	1.89%	8.11%	68.98%