1. Detailed analysis of the income statement: revenue growth significantly accelerated, non-interest income performed well (1) Overview and dismantling: Xiamen Bank's revenue in the first quarter of 2022 increased by 18.22% compared with the same period last year, of which net interest income increased by 10.51%, non-interest income increased by 72.43% over the same period last year, and both interest income and non-interest income were significantly faster than 4Q21. Judging from the quarter-on-quarter comparison in the first quarter, the positive contribution factors are:

Improvement in scale, non-interest and cost. (2) interest margin: from a single quarter point of view, the net interest income in the first quarter of 2022 is lower than that in the fourth quarter of 2021, and the single-quarter interest margin is under pressure. (3) in terms of revenue:

Xiamen Bank has built an one-stop wealth management product system due to the full product line coverage of fixed collection, mixing, rights and interests, and insurance protection, and the net income of handling fees and commissions in the first quarter increased by 21.62% compared with the same period last year.

two。 Detailed analysis of the balance sheet: the growth rate of deposits and loans is relatively low, but the increase in new deposits is more than the same period last year. (1) Asset end: by the end of the first quarter, the total amount of Xiamen bank loans increased by 3.46% compared with the beginning of the year; loans increased by 6.05 billion yuan in the first quarter. The new part is mainly contributed by the increase in public loans (4.711 billion yuan in the first quarter). (2) debt side: by the end of the first quarter, total bank deposits in Xiamen increased by 0.21% compared with the beginning of the year, and deposits increased by 380 million yuan in the first quarter, a relatively low increase but still an increase of 9.207 billion yuan over the same period last year.

3. Detailed analysis of asset quality: bad quality and concern continue to improve

(1) non-performing loans: by the end of March 2022, the non-performing loan ratio of Xiamen Bank was 0.90%, down 1bp from the beginning of the year, while the proportion of concern loans was 0.83, down 8bp from the beginning of the year. (2) provision: as of the end of the first quarter, Xiamen Bank's provision coverage rate was 371.63%, an increase of 0.99 percentage points over the end of last year, and risk offset was relatively adequate.

Investment advice: 1Q22, Xiamen Bank's revenue growth is significantly faster than in 2021, net interest income and non-interest net income have achieved faster year-on-year growth. Affected by the current credit environment, loan growth has slowed down, but the deposit side has achieved a better year-on-year growth rate. It is optimistic that revenue improvement will play a leading role in the valuation repair of Xiamen Bank. The current stock price corresponds to the 2022 PB 2023 PB valuation of 2024 at 0.63X/0.52X/0.43X, maintaining the "buy" rating.

Risk hint: asset quality is affected by a higher-than-expected economic decline, and credit risk is concentrated exposed.