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Towa Bank, Ltd. (JP:8558)
:8558
Japanese Market
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Towa Bank, Ltd. (8558) AI Stock Analysis

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JP:8558

Towa Bank, Ltd.

(8558)

Rating:77Outperform
Price Target:
¥1,068.00
▲(10.10% 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. (8558) vs. iShares MSCI Japan ETF (EWJ)

Towa Bank, Ltd. Business Overview & Revenue Model

Company DescriptionTowa 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 MoneyTowa 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
75
Positive
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
65
Positive
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
70
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue35.97B36.42B29.74B29.49B32.88B32.00B
Gross Profit35.33B29.75B29.74B29.34B30.36B32.00B
EBITDA2.52B6.23B5.92B6.55B4.85B5.30B
Net Income4.52B4.52B3.53B4.09B1.75B2.50B
Balance Sheet
Total Assets2.38T2.38T2.41T2.39T2.57T2.55T
Cash, Cash Equivalents and Short-Term Investments167.71B167.71B195.49B188.35B376.58B383.66B
Total Debt121.49B121.49B120.69B115.89B292.99B298.71B
Total Liabilities2.29T2.29T2.29T2.27T2.44T2.42T
Stockholders Equity90.64B90.64B118.07B117.16B124.69B134.61B
Cash Flow
Free Cash Flow0.005.25B-1.61B-211.22B3.50B175.27B
Operating Cash Flow0.007.87B941.00M-209.39B5.00B178.22B
Investing Cash Flow0.006.16B7.42B22.39B-10.91B-33.40B
Financing Cash Flow0.00-15.21B-1.12B-169.78B-1.30B-1.85B

Towa Bank, Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price970.00
Price Trends
50DMA
808.68
Positive
100DMA
738.96
Positive
200DMA
673.22
Positive
Market Momentum
MACD
44.20
Negative
RSI
74.92
Negative
STOCH
75.82
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 970 is above the 20-day moving average (MA) of 896.05, above the 50-day MA of 808.68, and above the 200-day MA of 673.22, indicating a bullish trend. The MACD of 44.20 indicates Negative momentum. The RSI at 74.92 is Negative, neither overbought nor oversold. The STOCH value of 75.82 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

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
¥31.97B8.05
2.59%10.71%14.40%
77
Outperform
¥35.80B6.17
3.09%12.18%62.82%
72
Outperform
¥17.06B6.96
3.60%14.06%20.87%
69
Neutral
¥16.01B11.13
3.59%2.61%-7.91%
68
Neutral
$17.80B11.8710.23%3.74%9.69%1.18%
60
Neutral
¥24.67B5.54
1.67%1.45%73.78%
54
Neutral
¥50.66B7.44
1.44%3.90%-935.77%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:8558
Towa Bank, Ltd.
970.00
408.88
72.87%
JP:8338
Tsukuba Bank, Ltd.
299.00
63.46
26.94%
JP:8537
Taiko Bank, Ltd.
1,806.00
431.28
31.37%
JP:8542
Tomato Bank, Ltd.
1,393.00
262.67
23.24%
JP:8550
Tochigi Bank, Ltd.
485.00
222.25
84.59%
JP:8551
Kita-Nippon Bank, Ltd.
3,860.00
1,476.49
61.95%

Towa Bank, Ltd. Corporate Events

Towa Bank Reports Decline in Financial Performance for 2024
Feb 14, 2025

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.

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: Aug 29, 2025