Towa Bank, Ltd. (8558) AI Stock Analysis

• Market Cap: ¥27.72B
• Dividend Yield: 3.99%
• Average Volume (3M): 128.88K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 0.91
• Revenue Growth: 2.37%
• EPS Growth: -29.71%
• Country: JP
• Employees: 1,257
• Sector: Financial
• Sector Strength: 73
• Industry: Banks - Regional
• EPS (TTM): 68.98
• Shares Outstanding: 37,180,270
• 10 Day Avg. Volume: 172,600
• 30 Day Avg. Volume: 128,883
• PEG Ratio: 0.07
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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

• Rating: 73 Outperform
• Price Target: ―

The overall score for Towa Bank is driven by a solid valuation, with a low P/E ratio and high dividend yield, suggesting potential undervaluation and attractive shareholder returns. The technical analysis indicates positive market momentum, although caution is advised due to potential overbought conditions. Financial performance shows strong revenue and gross margins but raises concerns with declining net margins and cash flow issues, highlighting areas for operational improvement.

Towa Bank, Ltd. Business Overview & Revenue Model

Company Description

Towa Bank, Ltd. (8558) is a regional financial institution based in Japan, primarily operating in the banking sector. The bank provides a comprehensive range of financial services including retail banking, corporate banking, and various financial products tailored to meet the needs of its individual and business customers. Towa Bank focuses on fostering economic growth within its region by supporting local businesses and offering customized financial solutions.

How the Company Makes Money

Towa Bank, Ltd. generates revenue through interest income from loans and advances provided to personal and corporate clients, as well as through investment in securities. Non-interest income is also a significant contributor to its earnings, deriving from fees and commissions on various banking services such as account maintenance, fund transfers, and advisory services. The bank may also engage in partnerships with other financial institutions to enhance its service offerings and diversify revenue streams. Additionally, Towa Bank's financial performance is influenced by factors such as regional economic conditions, interest rate fluctuations, and regulatory changes that impact the banking industry.

Towa Bank, Ltd. Financial Statement Overview

Summary

Towa Bank exhibits strong revenue and gross profit margins, but declining net margins highlight potential profitability issues. The balance sheet shows a stable financial position with a good equity ratio, but declining returns on equity. Cash flow management appears problematic, with recent negative free cash flows and absent operating cash flow in the TTM period, indicating potential operational and financial strategy challenges.

Income Statement

The company shows a moderate revenue growth rate from the previous annual report to the TTM period. Gross profit margin remains strong, indicating efficient cost management. However, net profit margin has declined in the TTM period, suggesting increased expenses or other income-related challenges. EBIT margin has improved, showing operational efficiency, but EBITDA margin is low, indicating potential concerns in non-operating expenses or depreciation.

Balance Sheet

Towa Bank has a strong equity ratio, indicating financial stability and lower reliance on debt financing. The debt-to-equity ratio is reasonable, suggesting a balanced capital structure. However, a declining ROE in the latest period may indicate less efficient use of equity capital compared to previous years.

Cash Flow

The cash flow statement highlights volatility, with significant negative free cash flow in recent periods. This suggests challenges in capital and operating expenditure management. The absence of operating cash flow in the TTM period raises concerns about the bank's operational cash-generating ability.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	30.58B	29.74B	31.68B	32.67B	32.36B
Gross Profit	0.00	29.74B	29.34B	32.67B	32.36B
EBITDA	6.23B	5.92B	6.55B	4.85B	5.30B
Net Income	4.52B	3.53B	4.09B	1.75B	2.50B
Balance Sheet
Total Assets	2.38T	2.41T	2.39T	2.57T	2.55T
Cash, Cash Equivalents and Short-Term Investments	0.00	195.49B	188.35B	376.58B	383.66B
Total Debt	121.49B	120.69B	115.89B	292.99B	298.71B
Total Liabilities	2.29T	2.29T	115.89B	2.44T	2.42T
Stockholders Equity	90.64B	118.07B	117.16B	124.69B	134.61B
Cash Flow
Free Cash Flow	5.25B	-1.61B	-211.22B	3.50B	175.27B
Operating Cash Flow	7.87B	941.00M	-209.39B	5.00B	178.22B
Investing Cash Flow	-22.49B	7.42B	22.39B	-10.91B	-33.40B
Financing Cash Flow	-14.11B	-1.12B	-1.12B	-1.30B	-1.85B

Towa Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 759.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 759 is above the 20-day moving average (MA) of 723.10, above the 50-day MA of 712.60, and above the 200-day MA of 623.47, indicating a bullish trend. The MACD of 14.59 indicates Negative momentum. The RSI at 57.61 is Neutral, neither overbought nor oversold. The STOCH value of 67.60 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
8331	73 Outperform	$976.48B	13.12	6.30%	3.26%	9.27%	20.49%
8558	73 Outperform	¥27.72B	6.14		3.99%	2.37%	-29.71%
8354	70 Outperform	$776.20B	10.60	7.30%	3.46%	15.35%	-1.62%
8336	70 Neutral	¥116.49B	8.86		3.41%	-1.59%	20.55%
Sector *	58 Neutral	HK$91.21B	5.17	-3.21%	5.20%	7.36%	-55.21%

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.