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Aozora Bank Ltd (JP:8304)
:8304

Aozora Bank (8304) AI Stock Analysis

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JP

Aozora Bank

(OTC:8304)

Rating:42Neutral
Price Target:
Aozora Bank's overall score reflects significant financial challenges, particularly in generating income and cash flows. The technical indicators signal a bearish trend, while the valuation metrics raise concerns about profitability. Despite a healthy dividend yield, the negative financial performance and technical analysis suggest caution for investors.

Aozora Bank (8304) vs. iShares MSCI Japan ETF (EWJ)

Aozora Bank Business Overview & Revenue Model

Company DescriptionAozora Bank, Ltd., together with its subsidiaries, provides various banking products and services in Japan and internationally. It operates through Retail Banking Group, Institutional Banking Group, Allied Banking Group, Specialty Finance Group, International Finance Group, and Financial Markets Group segments. The company offers checking accounts, savings accounts, time deposits, deposits-at-notice, non-residents deposits, and negotiable certificates of deposit, as well as deposits in foreign currencies. It also provides loans on deeds and notes, and overdrafts; corporate, M&A, project, equity, sustainable, LBO, structured, real estate, business recovery, and project financing products; syndicated loans; discount on promissory notes; securities investments, including public, local, and corporate bonds, as well as equity and other securities; domestic and foreign exchange services; and consignment of bonds. In addition, the company offers liabilities guarantee, securities lending, public bonds underwriting, agency, custody, financial instruments intermediary, securitization, M&A advisory, business succession consulting, business expansion, equity/debt funding, and consulting services. Further, it is involved in the over-the-counter sale of securities investment trusts and insurance products; and provision of trust services for secured corporate bonds, as well as interest rate, currency, and other derivative transaction services. As of March 31, 2021, it operated 19 branches. The company was formerly known as Nippon Fudosan Bank, Limited and changed its name to Aozora Bank, Ltd. in 2001. Aozora Bank, Ltd. was incorporated in 1957 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyAozora Bank makes money through a variety of revenue streams typical of financial institutions. The primary sources of revenue include interest income from loans and advances provided to individual and corporate clients. The bank also earns from fees and commissions on services such as asset management, advisory, and brokerage activities. Additionally, Aozora Bank generates income from trading activities and investments in financial markets. Strategic partnerships and collaborations with other financial entities might also contribute to its earnings, enhancing its service offerings and market reach. The bank's revenue model is supported by its ability to manage risks and optimize its asset portfolio to ensure sustainable profitability.

Aozora Bank Financial Statement Overview

Summary
Aozora Bank is facing financial challenges across its income, balance sheet, and cash flow statements. Despite a stable equity position, negative income and cash flow metrics highlight operational inefficiencies and sustainability concerns. Declining revenue and negative cash flows need to be addressed to improve financial health.
Income Statement
45
Neutral
Aozora Bank's income statement reveals mixed performance. The TTM data shows negative net income, resulting in a negative net profit margin, while the gross profit margin is positive but distorted due to negative revenue. Revenue growth has declined over the years, indicating a downward trend in earnings. EBIT margin is positive in the TTM, suggesting operational efficiency, but EBITDA margin is negative, highlighting issues with earnings before interest, taxes, depreciation, and amortization.
Balance Sheet
60
Neutral
The balance sheet of Aozora Bank shows a moderate financial position. The debt-to-equity ratio is relatively high, indicating leverage reliance, but the equity ratio remains stable, reflecting a solid equity base compared to total assets. Return on equity is negative due to the negative net income, suggesting challenges in generating returns for shareholders.
Cash Flow
30
Negative
The cash flow statement indicates significant challenges. Operating cash flow is consistently negative, leading to a negative free cash flow. With the absence of positive operating cash flow, the bank struggles to sustain operations without external financing, as evidenced by negative free cash flow to net income ratio.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue136.88B220.18B106.52B105.78B116.28B116.26B
Gross Profit164.28B0.00106.52B105.78B116.28B116.26B
EBITDA-4.53B23.79B0.0014.34B52.44B44.81B
Net Income-18.97B20.52B-49.90B8.72B35.00B28.97B
Balance Sheet
Total Assets7.92T7.76T7.60T7.18T6.73T5.92T
Cash, Cash Equivalents and Short-Term Investments1.42T0.001.58T1.28T1.14T950.11B
Total Debt831.41B1.23T744.70B683.39B617.42B563.67B
Total Liabilities7.47T7.30T7.21T6.75T6.24T5.43T
Stockholders Equity446.68B451.42B384.40B438.66B493.49B494.55B
Cash Flow
Free Cash Flow0.0067.28B-229.93B-67.37B248.33B722.29B
Operating Cash Flow0.0068.73B-222.45B-61.38B253.90B728.73B
Investing Cash Flow0.00-362.35B167.44B213.94B-23.83B-223.53B
Financing Cash Flow0.00134.91B281.15B-18.07B-16.06B-14.88B

Aozora Bank Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price2117.00
Price Trends
50DMA
2061.04
Positive
100DMA
2046.18
Positive
200DMA
2243.46
Negative
Market Momentum
MACD
11.28
Positive
RSI
47.83
Neutral
STOCH
18.80
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8304, the sentiment is Neutral. The current price of 2117 is above the 20-day moving average (MA) of 2104.81, above the 50-day MA of 2061.04, and below the 200-day MA of 2243.46, indicating a neutral trend. The MACD of 11.28 indicates Positive momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 18.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:8304.

Aozora Bank Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
¥313.32B10.21
4.08%7.10%42.22%
71
Outperform
¥344.33B9.01
1.42%21.04%20.47%
69
Neutral
¥311.45B17.01
4.15%8.66%-42.80%
67
Neutral
¥713.17B10.667.55%3.34%7.97%15.90%
63
Neutral
¥321.18B11.47
4.06%12.82%13.03%
42
Neutral
$288.75B13.534.83%4.21%1.12%6.36%
$2.09B9.755.46%4.00%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:8304
Aozora Bank
2,117.00
-293.62
-12.18%
YFGSF
Yamaguchi Financial Group
10.80
0.19
1.79%
JP:5832
Chugin Financial Group,Inc.
1,794.00
208.55
13.15%
JP:7327
Daishi Hokuetsu Financial Group, Inc.
3,470.00
1,045.29
43.11%
JP:8377
Hokuhoku Financial Group, Inc.
2,845.50
881.38
44.87%
JP:8410
Seven Bank, Ltd.
267.90
3.92
1.48%

Aozora Bank Corporate Events

Aozora Bank Announces Stable Dividend Payments for FY2024
Feb 3, 2025

Aozora Bank announced a third quarter dividend payment of 19 yen per share, which aligns with 25% of its unchanged full-year dividend forecast of 76 yen per share. The bank also updated its fourth quarter dividend forecast to 19 yen per share, reflecting stability and planning in its financial strategy, which may affect shareholder expectations and market positioning.

Aozora Bank Reports Financial Improvement in FY2024
Feb 3, 2025

Aozora Bank’s financial statement for the first nine months of FY2024 shows a decline in ordinary income by 11% compared to the previous year, with a notable turnaround in profitability from a loss in 2023 to a profit in 2024. The bank’s dividend forecast remains unchanged at 76 yen per common share for FY2024, indicating stability in shareholder returns. The company also reported a significant increase in total assets and net assets ratio, reflecting improved financial health.

Aozora Bank Reports Robust Q3 FY2024 Financial Results
Feb 3, 2025

Aozora Bank reported a strong financial performance for the third quarter of FY2024, with notable increases in net revenue and business-related profit year-on-year. The bank’s strategic investment business and GMO Aozora Net Bank achieved significant milestones, contributing to the improved financial results. Aozora’s alliance with Daiwa Securities Group is progressing well, enhancing the bank’s corporate and real estate finance offerings. Additionally, the bank has successfully managed its securities portfolio and reduced risks associated with its U.S. non-recourse office loans.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 22, 2025