Towa Bank, Ltd. (8558) AI Stock Analysis

• Market Cap: ¥36.47B
• Dividend Yield: 3.04%
• Average Volume (3M): 166.54K
• Price to Earnings (P/E): 6.3
• Beta (1Y): 0.94
• Revenue Growth: 12.18%
• EPS Growth: 62.82%
• Country: JP
• Employees: 1,257
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 52.53
• Shares Outstanding: 37,180,270
• 10 Day Avg. Volume: 134,850
• 30 Day Avg. Volume: 166,543
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥1,068.00
• Price Target Upside: 8.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 77 Outperform
• Price Target: ¥1,068.00 ▲(8.10% Upside)

Towa Bank's overall stock score is driven by strong technical momentum and attractive valuation, despite some financial leverage concerns. The stock's bullish trend and undervaluation are the most significant factors, while the lack of earnings call and corporate events data limits further insights.

Towa Bank, Ltd. Business Overview & Revenue Model

Company Description

Towa Bank, Ltd. (8558) is a regional bank based in Japan, primarily serving the Tohoku region. The bank offers a comprehensive range of financial services including personal banking, corporate banking, asset management, and treasury services. Towa Bank focuses on fostering relationships with local businesses and individuals, providing tailored financial solutions to meet the diverse needs of its clientele.

How the Company Makes Money

Towa Bank generates revenue primarily through interest income from loans and advances provided to both individual and corporate clients. This includes personal loans, mortgages, and business loans, which are charged at varying interest rates. Additionally, the bank earns fees from services such as transaction processing, wealth management, and investment advisory services. Another significant revenue stream comes from investment income generated by the bank's portfolio of securities. Towa Bank also engages in treasury operations, which can contribute to its earnings through forex and derivative transactions. Strategic partnerships with local businesses and government entities enhance its lending capacity and customer base, further supporting its revenue growth.

Towa Bank, Ltd. Financial Statement Overview

Summary

Towa Bank shows strong revenue growth and improved profitability, with some concerns over increased leverage. Cash flow metrics are solid, but the sustainability of recent growth rates is uncertain. Overall, the financial health is positive with areas to monitor, particularly leverage and cost efficiency.

Income Statement

Towa Bank has shown a strong revenue growth rate of 15.47% in the most recent year, indicating a positive trajectory. The net profit margin improved to 14.78%, reflecting enhanced profitability. However, the gross profit margin is not available, which limits a full assessment of cost efficiency. The EBIT and EBITDA margins have also improved, suggesting better operational efficiency.

Balance Sheet

The debt-to-equity ratio increased to 1.34, indicating higher leverage, which could pose a risk if not managed properly. Return on equity improved to 4.99%, showing better utilization of equity. The equity ratio is not available, limiting the assessment of financial stability. Overall, the balance sheet shows moderate strength with some leverage concerns.

Cash Flow

The free cash flow growth rate is notably high, but this is due to a recovery from a negative base, which may not be sustainable. The operating cash flow to net income ratio is strong at 2.14, indicating good cash generation relative to earnings. The free cash flow to net income ratio is 0.67, showing a healthy conversion of income to cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	35.97B	36.42B	29.74B	29.49B	32.88B	32.00B
Gross Profit	35.33B	29.75B	29.74B	29.34B	30.36B	32.00B
EBITDA	2.52B	6.23B	5.92B	6.55B	4.85B	5.30B
Net Income	4.52B	4.52B	3.53B	4.09B	1.75B	2.50B
Balance Sheet
Total Assets	2.38T	2.38T	2.41T	2.39T	2.57T	2.55T
Cash, Cash Equivalents and Short-Term Investments	167.71B	167.71B	195.49B	188.35B	376.58B	383.66B
Total Debt	121.49B	121.49B	120.69B	115.89B	292.99B	298.71B
Total Liabilities	2.29T	2.29T	2.29T	2.27T	2.44T	2.42T
Stockholders Equity	90.64B	90.64B	118.07B	117.16B	124.69B	134.61B
Cash Flow
Free Cash Flow	0.00	5.25B	-1.61B	-211.22B	3.50B	175.27B
Operating Cash Flow	0.00	7.87B	941.00M	-209.39B	5.00B	178.22B
Investing Cash Flow	0.00	6.16B	7.42B	22.39B	-10.91B	-33.40B
Financing Cash Flow	0.00	-15.21B	-1.12B	-169.78B	-1.30B	-1.85B

Towa Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 988.00
• 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:8558, the sentiment is Positive. The current price of 988 is above the 20-day moving average (MA) of 957.55, above the 50-day MA of 870.22, and above the 200-day MA of 697.56, indicating a bullish trend. The MACD of 24.27 indicates Positive momentum. The RSI at 65.21 is Neutral, neither overbought nor oversold. The STOCH value of 35.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8558.

Towa Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8551	78 Outperform	¥32.92B	8.29	4.64%	2.77%	10.71%	14.40%
8558	77 Outperform	¥36.47B	6.29	―	3.04%	12.18%	62.82%
8537	72 Outperform	¥16.66B	6.80	3.33%	3.68%	14.06%	20.87%
8542	69 Neutral	¥15.58B	10.83	3.25%	3.69%	2.61%	-7.91%
8338	60 Neutral	¥25.33B	5.68	―	1.63%	1.45%	73.78%
8550	54 Neutral	¥53.06B	-2.43	-14.74%	1.38%	3.90%	-935.77%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Towa Bank, Ltd. Corporate Events

Towa Bank Reports Decline in Financial Performance for 2024

Towa Bank, Ltd. reported a slight decline in its financial performance for the nine months ending December 31, 2024, with ordinary income decreasing by 0.2% and a significant drop in profit attributable to owners of the parent by 30.8% compared to the previous year. The bank’s equity ratio and capital adequacy ratio also saw reductions, indicating potential financial challenges that may impact its operations and stakeholder interests.