Core Viewpoint - The asset quality indicators of Industrial Bank have improved quarter-on-quarter, with a slight increase in the dividend payout ratio to 30.2% [1][6]. Financial Performance - In 2024, Industrial Bank's net profit attributable to shareholders grew by 0.1% year-on-year, marking a return to profit growth; revenue increased by 0.7% year-on-year, with a quarter-on-quarter decline in growth rate by 1 percentage point [2][3]. - The bank's non-performing loan (NPL) ratio at the end of 2024 was 1.07%, a decrease of 1 basis point from the end of Q3 2024, while the provision coverage ratio rose to 238%, an increase of 4 percentage points from Q3 2024 [2]. Impairment Improvement Supporting Profitability - The slight growth in net profit is primarily attributed to a significant improvement in impairment losses, which decreased by 1.6% year-on-year in 2024, contrasting with a 14.3% increase in the first three quarters [3]. - The improvement in impairment losses is supported by a decline in the level of new NPLs and increased efforts in recovering existing bad debts, with a real NPL TTM generation rate decreasing by 19 basis points [3]. Net Interest Margin Resilience - In Q4 2024, the net interest margin decreased by 1 basis point to 1.56, which was better than expected due to improved funding costs offsetting the decline in asset yields [4]. - Both asset yield and funding cost rates decreased by 8 basis points quarter-on-quarter [4]. Asset Quality Turning Positive - By the end of Q4 2024, the NPL ratio and attention rate decreased by 1 basis point and 6 basis points to 1.07% and 1.71%, respectively, indicating a positive turning point in asset quality [5]. - The credit card risk has significantly improved, while the pressure from real estate risks remains high, with the real estate NPL ratio at 3.89% at the end of 2024 [5]. Dividend Payout Increase - The dividend payout ratio for 2024 was 30.2%, up from 29.6% in 2023, reinforcing the dividend logic [6]. - The bank's dividend yield as of March 27, 2025, was 4.93%, indicating strong dividend value [6]. Profit Forecast and Valuation - The forecast for net profit attributable to shareholders from 2025 to 2027 is expected to grow by 0.42%, 4.45%, and 5.46%, respectively, with corresponding book values per share of 39.35, 41.98, and 44.77 yuan [7]. - The current price corresponds to a price-to-book ratio of 0.55, 0.51, and 0.48 for the respective years, with a target price of 25.82 yuan per share, indicating a potential upside of 20% [7].