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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

Towa Bank, Ltd.

(8558)

Rating:73Outperform
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. (8558) vs. iShares MSCI Japan ETF (EWJ)

Towa Bank, Ltd. Business Overview & Revenue Model

Company DescriptionTowa 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 MoneyTowa 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
68
Positive
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
72
Positive
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
50
Neutral
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.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue30.58B29.74B31.68B32.67B32.36B
Gross Profit0.0029.74B29.34B32.67B32.36B
EBITDA6.23B5.92B6.55B4.85B5.30B
Net Income4.52B3.53B4.09B1.75B2.50B
Balance Sheet
Total Assets2.38T2.41T2.39T2.57T2.55T
Cash, Cash Equivalents and Short-Term Investments0.00195.49B188.35B376.58B383.66B
Total Debt121.49B120.69B115.89B292.99B298.71B
Total Liabilities2.29T2.29T115.89B2.44T2.42T
Stockholders Equity90.64B118.07B117.16B124.69B134.61B
Cash Flow
Free Cash Flow5.25B-1.61B-211.22B3.50B175.27B
Operating Cash Flow7.87B941.00M-209.39B5.00B178.22B
Investing Cash Flow-22.49B7.42B22.39B-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 Price759.00
Price Trends
50DMA
712.60
Positive
100DMA
656.61
Positive
200DMA
623.47
Positive
Market Momentum
MACD
14.59
Negative
RSI
57.61
Neutral
STOCH
67.60
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

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$976.48B13.126.30%3.26%9.27%20.49%
73
Outperform
¥27.72B6.14
3.99%2.37%-29.71%
70
Outperform
$776.20B10.607.30%3.46%15.35%-1.62%
70
Neutral
¥116.49B8.86
3.41%-1.59%20.55%
58
Neutral
HK$91.21B5.17-3.21%5.20%7.36%-55.21%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:8558
Towa Bank, Ltd.
744.00
93.78
14.42%
JP:8336
Musashino Bank, Ltd.
3,560.00
450.60
14.49%
JP:8354
Fukuoka Financial Group
4,034.00
-160.47
-3.83%
JP:8331
Chiba Bank
1,358.00
-4.40
-0.32%

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: May 02, 2025