Investment highlights Financial highlights: Net interest income for the first quarter was +1.1% month-on-month. Scale expansion was the main driver, and the size of interest-bearing assets increased 1.1% month-on-month. 2. Asset quality is generally stable. The bad rate and net bad generation rate continued to decline. There was a decrease in the overdue rate compared to half a year. The overdue rate in 2019 decreased by 31 bp to 1.52% compared to the half year. The ability to offset risk has been enhanced, and provision coverage has been steadily improved. The provision coverage rates for the fourth quarter and the first quarter were 262.76% and 272.2%, respectively, up 7.4 percentage points and 8.4 percentage points from the previous quarter. 3. Management efficiency has improved, and the cost income ratio has declined year-on-year for two consecutive quarters. The annualized cost-to-revenue ratio for the fourth quarter of 2019 and 1Q20 was 27.64% and 19.36% respectively, down 3.85% and 2.9% from the previous year. 4. The capital adequacy ratio increased significantly in the first quarter. The 1Q20 core tier 1 capital adequacy ratio was 12.84%, up 22 bps, 23 bps, and 20 bps over the previous month. Insufficient financial reports: Net interest spreads for the first quarter fell by 4 bps month-on-month: mainly due to declining asset-side yields, growth in high-yield consumer loans slowed down, making it difficult to hedge against falling interest rates brought about by declining LPR. 2. Net non-interest income in 2019 and 1Q20 was 40.6% and -10.3% year-on-year respectively, mainly due to declining handling fees and commission income, while net other non-interest income had a high base impact. Investment suggestions: Company 2020E, 202E PB 0.95X/0.87X; PE8.33X/7.56X (urban commercial bank PB 0.78X/0.69X; PE 6.39X/5.70X). The company's asset quality is generally stable; the equity structure is diverse and balanced, and corporate governance is good; as a major province of culture, science and technology, and military industry, Xi'an has unique business regions, so it is recommended to pay attention to it. Risk warning: The economic downturn exceeds expectations, and the company's business progress falls short of expectations.