Morningstar - Japan Post Bank Co. Ltd. (7182) Initiating Coverage of Japan Post Bank With FVE of JPY 1,450; Shares Undervalued

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Morningstar

Mari Kumagai

EUR 101.80 For Business Accounts Only

Initiating Coverage of Japan Post Bank With FVE of JPY 1,450; Shares Undervalued

We are initiating the coverage on Japan Post Bank with a fair value estimate of JPY 1,450, equivalent to 0.5 times our forward book value estimate. We think the shares are slightly undervalued due to market dislocations from geopolitical risk.Â
We do not think Japan Post Bank has an economic moat largely because the bank has failed to consistently earn returns exceeding its cost of capital of 10% with historical ROE tracking under 5.0%. We forecast the company's average return on invested capita...

30/08/2017 13 EN

Underlying

Japan Post Bank Co. Ltd.

Japan Post Bank is a commercial banking group based in Japan. Co. is engaged in banking operations as a member of the Japan Post Group with total assets of Y209,568,820 million as of Mar 31 2017. Co.'s principal operations comprise deposit-taking, syndicated loans and other lending, securities investment, domestic and foreign exchange, retail sales of Japanese government bonds and investment trusts as well as insurance products, intermediary services including mortgages, and credit card operations. Co. provides its products and services through a nationwide network of approximately 23,826 post office. In addition Co. maintains a network of 234 banking branches.

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JP3946750001 Japan

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Mari Kumagai

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Initiating Coverage of Japan Post Bank With FVE of JPY 1,450; Shares Undervalued

With a more favourable environment, JAPAN POST BANK improves to Positive

Morningstar | New Scheme for Post-Office Fees Could Help Japan Post Bank Cut Costs

Morningstar | New Scheme for Post-Office Fees Could Help Japan Post Bank Cut Costs. See Updated Analyst Note from 27 May 2019

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Sasol Provides Full-Year Production Update

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

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