Awa Bank, Ltd. (8388) AI Stock Analysis

• Market Cap: ¥218.32B
• Dividend Yield: 2.53%
• Average Volume (3M): 52.99K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 1.04
• Revenue Growth: 7.67%
• EPS Growth: 11.03%
• Country: JP
• Employees: 1,332
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 100.54
• Shares Outstanding: 40,000,000
• 10 Day Avg. Volume: 54,740
• 30 Day Avg. Volume: 52,990
• PEG Ratio: 0.45
• Price to Book (P/B): 0.34
• Price to Sales (P/S): 1.47
• P/FCF Ratio: 3.11
• 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: ¥5,698.00 ▲(23.60% Upside)
• Action: Downgraded Date: 03/05/26
• Date: Action: Downgraded 03/05/26

The score is primarily supported by solid financial performance (good revenue growth, strong gross margin, and improved/free-cash-flow generation) tempered by modest ROE and weak operating cash flow efficiency versus net income. Technicals are mixed with near-term weakness (below 20-day average) but a still-supportive longer-term trend (above 50/100/200-day averages). Valuation is moderately favorable with a low-to-moderate P/E and a modest dividend yield.

Positive Factors

Sustained Revenue Growth

An 8.62% revenue growth rate indicates expanding core banking activity in the region, reflecting stronger loan and fee generation. That trend supports durable net interest and noninterest income growth, enabling continued reinvestment in services and branch/digital capabilities over months.

High Gross Margin / Cost Efficiency

A gross margin near 88% signals effective cost control and pricing power in core products. Persistent cost efficiency increases operating leverage, helping maintain profitability through business-cycle swings and funding investments in tech or customer service across the medium term.

Strong Free Cash Flow Conversion

FCF converting ~95% of net income shows earnings largely become cash, supporting dividend capacity, balance sheet repair, or targeted growth investments. This cash generation resilience strengthens funding flexibility and strategic options over the next several quarters.

Negative Factors

Modest Return on Equity

A ROE under 4% suggests limited efficiency in generating shareholder returns from capital, constraining long-term value creation. Persistently low ROE can force management to reallocate capital, cut costs, or pursue higher-risk lending to lift returns, affecting strategic choices.

Weak Operating Cash Flow Efficiency

An OCF-to-net-income ratio of 0.01 indicates reported earnings are not translating into operating cash, flagging working-capital timing issues or earnings quality concerns. Over months this can strain liquidity, limit loan growth, or increase reliance on wholesale funding if not resolved.

Pressure on Net Profit Margin

A declining net margin to ~17% signals rising costs or margin compression on lending/fees. Sustained margin pressure reduces retained earnings and capital generation capacity, limiting buffers for credit losses or investment and making profitability more sensitive to interest or cost shocks.

Awa Bank, Ltd. Business Overview & Revenue Model

Company Description

The Awa Bank, Ltd. provides banking products and services to individual and corporate customers in Japan. The company offers general accounts, saving deposits, time deposits, and foreign currency deposits, as well as certificates of deposit; and investment trusts. It also provides housing, remodeling, car, card, education, solar, industrial, and business support loans; life, fire, education, and business insurance products; and safe deposit boxes. In addition, the company offers internet banking, pension, convenience, and management and business support services. As of March 31, 2021, it operated through a network of 101 branches. The company was formerly known as Tokushima Commercial Bank, Ltd. and changed its name to The Awa Bank, Ltd. in 1964. The Awa Bank, Ltd. was founded in 1896 and is headquartered in Tokushima, Japan.

How the Company Makes Money

Awa Bank generates revenue through various streams, primarily derived from interest income and fees. The main source of revenue comes from the interest earned on loans provided to individuals and businesses. This includes personal loans, mortgages, and commercial lending, where the bank charges interest over time. Additionally, Awa Bank earns fee income through service charges on deposit accounts, transaction fees, and commissions from financial products such as investment services and insurance products. The bank may also engage in investment activities, generating returns on its financial assets. Significant partnerships with local businesses and community organizations enhance its ability to attract customers and expand its loan portfolio, supporting its overall revenue growth.

Awa Bank, Ltd. Financial Statement Overview

Summary

Income statement strength (revenue growth 8.62% and high gross margin 87.9%) supports the score, but profitability is mixed with a slightly lower net margin (16.99%). Balance sheet leverage looks moderate (debt-to-equity 0.60) though ROE is modest (3.95%). Cash flow shows strong improvement and solid free-cash-flow conversion (FCF to net income 0.95), but operating cash flow efficiency versus net income is very low (0.01).

Income Statement

Awa Bank, Ltd. shows a strong revenue growth rate of 8.62% in the latest year, indicating positive momentum. The gross profit margin is robust at 87.9%, reflecting efficient cost management. However, the net profit margin has slightly decreased to 16.99% from the previous year, suggesting some pressure on profitability. The EBIT and EBITDA margins are healthy, supporting overall profitability.

Balance Sheet

The bank maintains a moderate debt-to-equity ratio of 0.60, indicating a balanced approach to leverage. Return on equity is modest at 3.95%, suggesting room for improvement in generating returns for shareholders. The equity ratio is stable, reflecting a solid capital structure.

Cash Flow

Operating cash flow has improved significantly, but the operating cash flow to net income ratio is low at 0.01, indicating potential inefficiencies in cash generation relative to income. Free cash flow growth is strong, but the free cash flow to net income ratio of 0.95 suggests that most of the net income is being converted into free cash flow, which is positive.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	69.50B	77.69B	74.81B	86.79B	66.67B	64.36B
Gross Profit	69.50B	70.47B	66.26B	79.19B	65.04B	62.24B
EBITDA	16.95B	20.55B	19.27B	17.70B	19.07B	15.10B
Net Income	12.71B	13.20B	11.26B	10.21B	11.11B	8.50B
Balance Sheet
Total Assets	4.03T	4.02T	3.92T	3.85T	3.98T	3.87T
Cash, Cash Equivalents and Short-Term Investments	0.00	427.65B	402.27B	482.87B	690.24B	632.77B
Total Debt	193.44B	199.51B	167.93B	128.11B	279.23B	248.06B
Total Liabilities	3.69T	3.69T	3.59T	3.57T	3.69T	3.57T
Stockholders Equity	338.84B	334.22B	332.62B	278.76B	288.40B	292.89B
Cash Flow
Free Cash Flow	0.00	36.74B	2.49B	-325.82B	92.37B	299.27B
Operating Cash Flow	0.00	38.54B	5.69B	-321.75B	96.67B	301.56B
Investing Cash Flow	0.00	1.99B	-72.30B	93.25B	-37.03B	46.83B
Financing Cash Flow	0.00	65.85B	-13.75B	-3.60B	-2.27B	-2.44B

Awa Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4610.00
• 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:8388, the sentiment is Positive. The current price of 4610 is below the 20-day moving average (MA) of 5778.00, below the 50-day MA of 5237.80, and above the 200-day MA of 3870.81, indicating a neutral trend. The MACD of 102.16 indicates Positive momentum. The RSI at 51.62 is Neutral, neither overbought nor oversold. The STOCH value of 39.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8388.

Awa Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8544	71 Outperform	¥238.47B	14.45	―	2.13%	7.77%	5.80%
8336	70 Outperform	¥202.86B	8.55	―	3.00%	10.56%	16.02%
8361	68 Neutral	¥266.81B	9.68	―	2.27%	2.68%	74.80%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8388	65 Neutral	¥218.32B	10.90	―	2.53%	7.67%	11.03%
7381	65 Neutral	¥230.86B	8.99	―	2.38%	8.43%	38.21%
8386	59 Neutral	¥248.90B	10.68	―	2.55%	-0.36%	41.38%

Awa Bank, Ltd. Corporate Events

Awa Bank Reports Progress on Share Buyback Program

The Awa Bank, Ltd. has reported the progress of its share buyback program authorized under Japan’s Companies Act, targeting common shares as part of capital management efforts. Between February 4 and February 28, 2026, the bank repurchased 115,000 shares on the Tokyo Stock Exchange at a total cost of ¥664,054,000.

This activity is conducted under a board resolution allowing up to 200,000 shares, or about 0.50% of issued shares excluding treasury stock, to be bought back for up to ¥1 billion between February 4 and March 18, 2026. The partial execution of this mandate indicates that Awa Bank is actively using share repurchases to optimize its capital structure and potentially enhance shareholder value while retaining capacity for further buybacks within the approved limits.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen6170.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.

Awa Bank Posts Strong Nine‑Month Results, Lifts Full‑Year Forecast and Dividend Plan

For the nine months ended 31 December 2025, Awa Bank reported strong consolidated results, with ordinary income rising 20.6% year on year to ¥70.3 billion, ordinary profit up 24.5% to ¥17.0 billion, and profit attributable to owners of the parent increasing 21.9% to ¥12.2 billion; comprehensive income surged 157.9%, while total assets expanded to ¥4.15 trillion and equity grew, lifting the equity-to-asset ratio to 9.2%. The bank raised its full‑year earnings forecast, now expecting ordinary income of ¥94.2 billion and profit attributable to owners of the parent of ¥15.0 billion, and signaled shareholder‑friendly capital policy with a planned total annual dividend of ¥130 per share for the year ending March 31, 2026, including a commemorative 130th‑anniversary dividend, even as it increased treasury shares, underscoring confidence in its earnings power and capital position.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen5739.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.

Awa Bank Announces Share Buyback and Cancellation to Enhance Shareholder Returns

The Awa Bank’s board has approved a share repurchase of up to 200,000 common shares, equivalent to about 0.50% of its outstanding stock, for a total amount not exceeding 1 billion yen through market purchases on the Tokyo Stock Exchange between February 4 and March 18, 2026. Framed as a flexible capital management measure aimed at adapting to changes in the business environment and enhancing shareholder returns, the bank plans to cancel all shares acquired, a move that could support earnings per share and signal confidence in its capital position to investors, while marginally reducing its share count from current levels of roughly 39.9 million shares outstanding.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen5751.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.

Awa Bank Raises Dividend Forecast with 130th Anniversary Commemorative Payouts

The Awa Bank, Ltd. has approved a commemorative dividend to mark the 130th anniversary of its founding, revising its year-end dividend forecast for the fiscal year ending March 31, 2026, and adding a similar commemorative payout at the second quarter-end of the following fiscal year. The bank will add ¥10 per share as a commemorative dividend to both the year-end dividend for FY2025–26 and the second quarter dividend for FY2026–27, lifting the forecast full-year dividend for the year ending March 31, 2026 to ¥130 per share, and reaffirming a shareholder return policy targeting a payout ratio of at least 40% of profit through dividends and share buybacks, underscoring its commitment to rewarding long-term investors while reinforcing its earnings base.

The most recent analyst rating on (JP:8388) stock is a Buy with a Yen5751.00 price target. To see the full list of analyst forecasts on Awa Bank, Ltd. stock, see the JP:8388 Stock Forecast page.