Introduction to this report:
The Bank of Xiamen focuses on small and medium-sized enterprises, serves both sides of the Strait, has distinct operating characteristics and excellent asset quality. The first coverage gave Bank of Xiamen 0.75 times PB in 2022, with a target price of 6.27 yuan, increasing its holdings rating.
Key points of investment:
Investment advice: Bank of Xiamen's net profit growth rate for 2022-2024 is expected to be 18.9%, 16.0%, 15.2%, and the corresponding EPS is 0.96, 1.12, 1.29 yuan/share, and the corresponding BVPS is 8.36, 9.2, and 10.17 yuan/share. The current price corresponds to 0.62, 0.56, 0.51 times PB in 2022-2024. The comprehensive absolute valuation method and relative valuation method covered the rating given to the Bank of Xiamen 0.75 times PB in 2022, with a target price of 6.27 yuan, for the first time.
Based in Xiamen, covering Fujian, there is plenty of room for growth. The Bank of Xiamen is deeply involved in the mainland. The local economy is developing rapidly and people's livelihood is prosperous, creating a favorable environment for the company's development. At the same time, the company has completed full coverage of operating outlets in prefecture-level cities in Fujian Province. In recent years, the share of deposits and loans outside of Xiamen has continued to increase, and overseas expansion has opened up room for future growth.
It focuses on small to medium, serves both sides of the Strait, and has distinctive management characteristics. On the one hand, the Bank of Xiamen adapted to local conditions and focused on inclusive micro customers according to the local business environment. At the end of 202H, inclusive microfinance loans accounted for 26.2% of total loans. On the other hand, relying on the background and location advantages of **** shareholders, cross-strait financial business will be developed comprehensively. **** clients contributed 12% of Bank of Xiamen's public deposits, 8% of retail deposits, and 6% of personal financial assets.
The quality of assets is excellent, and provisions are fully funded. The overall business style of Bank of Xiamen is steady, bad judgment is strict, and asset quality remains at the forefront among commercial banks in listed cities. The 2022Q3 end defect rate was 0.86%, and the provision coverage rate was 385%, providing a solid safety cushion for future performance growth.
Risk warning: Credit leniency results are lower than expected; real estate risk exposure exceeds expectations.