Kita-Nippon Bank, Ltd. (8551) AI Stock Analysis

• Market Cap: ¥37.65B
• Dividend Yield: 3.28%
• Average Volume (3M): 19.24K
• Price to Earnings (P/E): 10.6
• Beta (1Y): 1.21
• Revenue Growth: 22.26%
• EPS Growth: -12.68%
• Country: JP
• Employees: 773
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 106.38
• Shares Outstanding: 8,443,776
• 10 Day Avg. Volume: 15,080
• 30 Day Avg. Volume: 19,243
• PEG Ratio: 0.22
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 1.14
• P/FCF Ratio: 5.75
• 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: 68 Neutral
• Price Target: ¥5,330.00 ▲(12.33% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is primarily supported by solid financial performance (improving profitability and materially reduced leverage) and favorable valuation (low P/E and healthy dividend). These positives are partly offset by weaker near-term technicals, with oversold signals and price below the 20-day average indicating short-term pressure.

Positive Factors

Improving Profitability

Sustained margin expansion over multiple years indicates stronger pricing, improved cost control, and operational leverage. This deeper profitability supports internal capital generation, higher retained earnings for lending or investment, and more durable dividend capacity over the medium term.

Materially Lower Leverage

A drastic reduction in leverage materially improves solvency and interest expense flexibility, lowering financing risk. This stronger balance sheet enhances capacity to absorb local shocks, expand credit selectively, and fund strategic initiatives without heavy reliance on external debt.

Stronger Cash Generation

Improving free cash flow and a robust operating-cash-to-net-income profile indicate the bank generates real cash from core operations. Durable cash generation supports sustainable dividends, loan growth funding, and buffers against cyclical earnings shortfalls over the next several quarters.

Negative Factors

Cash Flow Volatility

Past episodes of negative cash flow suggest cash generation can be uneven, introducing execution and liquidity risk during downturns. Even with recent improvement, this volatility can constrain consistent capital deployment and requires maintaining larger liquidity buffers.

Missing Key Metrics

Absent disclosures on gross margin and equity ratio reduce transparency around cost structure and capital adequacy. This gap complicates long-term assessment of operating leverage, solvency and limits confidence in stress-testing the franchise under adverse scenarios.

Regional Concentration Risk

Concentration in a regional customer base ties credit quality and deposit growth to local economic cycles and demographics. This structural reliance can limit diversification, amplify downside in regional slowdowns, and restrict scale advantages versus national peers.

Kita-Nippon Bank, Ltd. Business Overview & Revenue Model

Company Description

The Kita-Nippon Bank, Ltd., together with its subsidiaries, provides commercial banking products and services in Japan. The company accepts various deposits and certificates of deposit; and offers business, housing, and other loans. It also provides credit cards; and credit guarantee, leasing and financing, computer, software development, and software sale services. As of March 31, 2021, the company had 77 offices primarily in Iwate Prefecture. The Kita-Nippon Bank, Ltd. was incorporated in 1942 and is headquartered in Morioka, Japan.

How the Company Makes Money

Kita-Nippon Bank generates revenue primarily through interest income derived from loans extended to customers, including personal, business, and agricultural loans. The bank also earns income from fees associated with account maintenance, transaction services, and advisory services. Additionally, it invests in securities and government bonds, which provide a secondary stream of income. The bank may have strategic partnerships with local businesses and governmental entities that enhance its service offerings and client base, contributing to its overall earnings. Furthermore, Kita-Nippon Bank benefits from the regional demand for banking services, reflecting the economic activities within its operational areas.

Kita-Nippon Bank, Ltd. Financial Statement Overview

Summary

Income statement trends are constructive with improving net profit margin (10.14% in 2022 to 16.17% in 2025) and stronger EBIT margin, while the balance sheet shows sharply lower leverage (debt-to-equity down to 0.015 in 2025). Cash flow has improved with growing free cash flow and a strong operating cash flow to net income ratio, but prior negative periods indicate some volatility and a few key metrics are missing (e.g., gross margin, equity ratio).

Income Statement

Kita-Nippon Bank has shown consistent revenue growth over the years, with a notable increase in net profit margin from 10.14% in 2022 to 16.17% in 2025. The EBIT margin has also improved, indicating better operational efficiency. However, the gross profit margin is not available, which limits a complete analysis of cost management.

Balance Sheet

The bank has significantly reduced its debt-to-equity ratio from over 2.37 in 2021 to 0.015 in 2025, indicating improved financial stability. The return on equity has increased, reflecting better profitability. However, the equity ratio is not provided, which is crucial for assessing the bank's financial leverage.

Cash Flow

The free cash flow has shown substantial growth, with a positive trajectory in recent years. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to net income. However, historical negative cash flows in some years highlight potential volatility in cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	25.52B	23.79B	26.87B	21.49B	20.98B	20.26B
Gross Profit	25.52B	22.84B	26.77B	21.37B	20.83B	20.07B
EBITDA	5.27B	6.20B	4.67B	4.08B	3.25B	3.21B
Net Income	4.03B	4.01B	3.07B	2.66B	2.11B	1.52B
Balance Sheet
Total Assets	1.55T	1.53T	1.52T	1.50T	1.68T	1.67T
Cash, Cash Equivalents and Short-Term Investments	0.00	111.06B	134.17B	90.16B	279.21B	316.40B
Total Debt	1.24B	1.36B	1.62B	1.73B	185.36B	177.02B
Total Liabilities	1.46T	1.44T	1.44T	1.42T	1.60T	1.59T
Stockholders Equity	87.72B	86.46B	86.04B	75.27B	75.37B	74.47B
Cash Flow
Free Cash Flow	0.00	4.71B	-28.58B	-212.06B	-31.48B	213.03B
Operating Cash Flow	0.00	5.29B	-27.36B	-210.95B	-30.53B	213.67B
Investing Cash Flow	0.00	-4.99B	71.83B	22.79B	-5.78B	-837.00M
Financing Cash Flow	0.00	-1.90B	17.86B	-546.00M	-591.00M	-465.00M

Kita-Nippon Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4745.00
• 50DMA: Negative
• 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:8551, the sentiment is Negative. The current price of 4745 is below the 20-day moving average (MA) of 4970.25, below the 50-day MA of 4926.40, and above the 200-day MA of 3926.98, indicating a neutral trend. The MACD of -71.80 indicates Positive momentum. The RSI at 42.66 is Neutral, neither overbought nor oversold. The STOCH value of 35.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:8551.

Kita-Nippon Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8558	78 Outperform	¥36.68B	24.09	―	2.87%	16.42%	119.62%
8537	72 Outperform	¥23.65B	7.08	―	3.50%	16.60%	-5.51%
8551	68 Neutral	¥37.65B	10.62	―	3.28%	22.26%	-12.68%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8542	67 Neutral	¥18.60B	4.85	―	3.37%	3.70%	24.98%
8338	65 Neutral	¥48.11B	4.49	―	1.20%	8.45%	168.74%
8364	64 Neutral	¥29.33B	7.87	―	2.59%	4.90%	―