Good afternoon, ladies and gentlemen. I'm Terence of China Communications Services. On behalf of the management, I would like to welcome you to our 2023 interim results presentation. This presentation will be conducted in Mandarin, with simultaneous English interpretation. I will provide consecutive interpretation in the Q&A section. Please switch off your mobile phone or have it on vibration. Thank you. Let me introduce our management who are with us today. Executive Director and Chairman, Mr. Liu Guiqing. Executive Director and President, Mr. Yan Dong. Executive President, Mr. Liang Shiping. Executive Director, Executive Vice President, and CFO, Ms. Zhang Xu. Thank you for coming, and I hope you'll find this presentation helpful. Next, let's invite Mr. Liu to present the 2023 interim results overview. Good afternoon, ladies and gentlemen. Today's results presentation is divided into three parts.
First, I will introduce the overview of our results. Next, Mr. Yan and Madam Zhang will present the business overview and financial results respectively. During the Q&A session, we will answer the questions that you may concern. Let's look at the highlights in the first half of 2023. First, we implemented strategies progressively, enhanced our value creation capability, then continued to achieve high-quality operating results. Second, corporate development efficiency improved continuously, with gross profit margin extended the stabilization and rebound trend. Third, we focused on the lead by technological innovation, with a drive on overall growth by high-margin businesses becoming more prominent. Fourth, we focused on strategic emerging industries, actively fostered new growth drivers, thus, growth momentum emerged gradually.
Fifth, through in reform and innovation, we continued to strengthen our cost capabilities to seize the precious opportunities from digital economy development, which constantly drive the high-quality development of the company. The results highlights in the first half of 2023 are, First, on value creation indicators, including gross profit margin, net profit margin, and ROE improved across the board. Second, on the expansion on key areas, we focused on strategic emerging industries to forge new growth momentum. New contracts from businesses such as digital infrastructure and smart city increased over 30%, accounting for over 27% of total new contracts value, which strengthened the future growth momentum. Next, let's look at results overview. In the first half, we adopted effective improvement in quality, reasonable growth in quantity, as principle of a high-quality development.
Among them, revenue reached RMB 73.2 billion, up 5.7% year-on-year, and service revenue increased 6.3% year-on-year, maintaining stable growth. Net profit reached RMB 2.03 billion, up 7.3% year-on-year, higher than revenue growth. Gross profit margin continued the recovery trend, increased by 0.2 percentage points year-on-year. Both net profit margin and annualized ROE increased. We strengthened capital management consistently, with free cash flow improved compared to the same period of last year. In the first half, gross profit margin continued last year's recovery trend, increased 0.2 percentage point year-on-year, reaching 10.7%. Among which, domestic operator markets gross profit margin stabilized and improved, which was the major contributor to the rise in gross profit margin during the period.
Domestic non-operator markets gross profit margin remained largely stable, which contributed positively to gross profit during the period. The continuous recovery of gross profit was due to the following measures. First, we implemented high-quality development strategy, which effectively managed and controlled the development of low gross profit margin businesses and strengthened effective development. Second, we optimized revenue mix by vigorously developing high-value businesses, so that the proportion of revenue with high gross profit margin increased. Third, we strengthened cost control by strengthening project management, with effectively controlled material costs, subcontracting charges, et cetera, and promoted cost control and efficiency enhancement persistently. In the first half, we seized the opportunities from digital infrastructure construction and industrial digitalization, which was strongly driven by the accelerating development of digital economy.
We actively integrated ourselves into ecosystem of customers, thus maintained stable growth of the three major markets and three major businesses. On the market side, growth of domestic operator markets further accelerated, up 7.5% year-on-year, making it the largest contributor to revenue growth. Development quality of domestic non-operator markets was reinforced, with its revenue up 3.6% year-on-year. On the business side, the fast growth of digital infrastructure business led to increased contribution by TIS business. TIS business increased 7.5% year-on-year, which is the largest contributor to revenue growth. ACO business sustained relatively fast growth, up 8.6% year-on-year. We continuously strengthened technological innovation in recent years by increasing investment in R&D, reaping favorable results.
In the first half of 2023, consultation, design, and software businesses, which were at high gross profit margin, were the second and the third largest sub-businesses contributing to revenue growth. Among them, revenue growth of software development and system support reached 31.5%. The drive of revenue growth for high gross profit margin businesses became more pronounced. We leveraged the core strength in consultation and design, and provided comprehensive integrated Smart solutions through top-level planning and Smart products, which had a positive boost to our traditionally advantaged infrastructure businesses. We focused on strategic emerging industries to foster new growth drivers. In the first half, our total new contracts value grew by over 6%, among which new contracts value from strategic emerging businesses increased by over 30%, accounting for over 27% of total new contracts.
In the field of digital infrastructure, we seized construction opportunities from intelligent computing centers, supercomputing centers, and cloud computing. New contracts value grew by over 50%. In the field of smart city, we put extra efforts in the development of key areas, such as digital government, smart transportation, and enterprise digital transformation, to promote intelligentization upgrade of urban management and services. Contracts value increased by over 10%. In the field of green and low carbon, we proactively served the national dual carbon strategic goal and further developed different sub-markets, including electricity, infrastructure, and ancillary facilities, photovoltaic, construction, energy usage services, and carbon management to provide customers with intelligentization and decarbonization services. Contracts value increased over 50%.
In the field of emergency management and security, focusing on scenario-based needs of regulatory departments and in key industries , customers, we developed core products in emergency management and security area, and strengthened nationwide promotion. Contracts value recorded stable growth. As the main force of digital infrastructure construction, leveraging the integrated service capabilities of full process consultation, design and general contracting, construction and maintenance, we put extra efforts in developing three areas. First is on data center. We seized the demand for construction of intelligent computing centers and supercomputing centers, and proactively provide full process, full life cycle integrated services to customers. Second is on cloud business. We provide premium services such as consultation and design, integration, migration, and security in cloud computing to operators, government, and enterprises. Third is on 5G Plus.
As the main force in 5G network construction, we provide services such as 5G Plus customized network and dedicated private network to customers from industrial manufacture, energy and mineral industrial park. The deployment in other strategic emerging industries could be referred in appendix. We focus on technological innovation and continuously increase investment in R&D to enrich the incubator of technological innovation. In the first half, we invested about RMB 2.1 billion in R&D, built a team of high-end experts of over 800, established group-level industrial research institutes on digital infrastructure, green and low carbon, smart city and emergency management, forged industry-leading software companies, coordinated development, and continuously upgrade group-level products such as Cybersecurity, Smart Park, Smart Port Transportation, and Smart Sport, deepened cooperation with top industries, universities, research institutes, and technology unicorns, resulting in further enrichment of R&D's ecosystem.
In the first half, we achieved fruitful results in technology research and patents, and constantly relaunched core products in strategic emerging industries, and our capabilities of technological innovation was recognized by the industry. Revenue from software development and system support increased by more than 31% year-on-year, and new contracts from strategic emerging industries exceeded RMB 27 billion. We continue to enhance the drive from reform by optimizing its operation and management system and mechanism in order to elevate corporate governance level and operating efficiency, which better supports and promotes business development. We speed up the pace of digital transformation, actively advance on the in-depth integration of digital technology, management, and customer service. Internally, we accelerate the promotion of mature digitalization tools and press on internal cost reduction and efficiency enhancement.
Externally, we forge vertical industrial, digitalized, integrated solutions and support transformation needs of customers. We steadily promote reform on key areas by completing shareholding reform of supply chain company in one of the phases of consolidation of property development company. Meanwhile, we accelerate the cultivation of leading enterprises in consultation and design and application software to build new competitive advantages in the value chain of industry. Currently, new technology drives reform of industry development and market potential for the strategic emerging industries is promising. We will adhere to the positioning of 1 positioning, 4 roles to accelerate the building of a first-class smart service innovative enterprise through strengthening four capabilities. First, enhance integrated consultation and design capabilities.
We speed up the transformation of its design institutes from traditional design business to consultation and design businesses, increase R&D investment, bringing expert talents, thereby speeding up the deployment in digital transformation and strategic emerging businesses. Second, strengthen general contracting capabilities in infrastructure construction. We actively pursue sizable, high-value general contracting projects, focus on cultivating an efficient general contracting project management team, and create cost advantages, thereby comprehensively enhancing general contracting project management capabilities. Third, capitalize on the strength of its brand. We solidify our leading position in communications infrastructure construction, and accelerate its upgrade and transformation, so as to build a brand of the main force in digital infrastructure construction, and become the industry's first choice.
Fourth, enhance its ability in driving industry development through capital operations, utilize the role of capital as a link, and build stronger industry ecosystem through investment, and thereby facilitating new business expansion and development quality enhancement. Going forward, we will expedite the development of strategic emerging businesses and upgrade of fundamental businesses to enhance value and promote high-quality development. Above is the first part of the presentation. Next, let's invite Mr. Yan Dong to present business overview. Thank you. Thank you, Chairman. Ladies and gentlemen, good afternoon. I will present the group's business overview for the first half of 2023. The table shows the revenues and growth rates of the three business segments and % to total revenues of each segment. More details are showed in the following sections and appendix. On the business side, we actively served the demand on new infrastructure construction of customers.
TIS business was the largest contributor to revenue growth, increased 7.5% year-on-year. We seized opportunities from accelerating development of digital technology, innovation, and application. ACO business recorded relatively fast growth, up 8.6% year-on-year, and its portion to total revenues continued to rise and reached 18.8%. On the market side, revenue from operators and non-operators accounting for approximately 50% each. Momentum from the two markets maintained balanced. In the following slides, we will highlight the development of the three major markets. In domestic non-operator market, amid the recovering macroeconomy, we seized opportunities from digitalization and intelligentization retrofit of traditional infrastructure, data center construction, and industrial digital transformation. Business mix was optimized and development quality was reinforced. Revenue increased 3.6% year-on-year, and its gross profit margin remained largely stable.
New contracts value was RMB 43.2 billion, up 7.6% year-on-year. Among which, new contracts from strategic emerging businesses increased over 20%. On over half of new contracts from strategic emerging businesses is from the domestic non-operator market, which has favorable development prospect. In key industries of domestic operator market, we achieved good results in industries such as government, construction, internet and IT, transportation, and electricity. New projects with contract value over RMB 100 million each, amounted to over RMB 3.4 billion. Among which, the proportion from strategic emerging industries exceeded 74%.
In the first half, apart from undertaking sizable data center and intelligent computing center projects, we consistently make breakthroughs in several areas, such as new energy, electricity, and utility, and ancillary facilities, digital government, smart transportation, and smart healthcare. As we further penetrated domestic non-operator market and further accumulated industry experience and successful cases, we could provide abundant integrated smart solutions to customers, which give us unique competitive advantages in smart services. In domestic operator market, we seized opportunities from the state in promoting the moderately accelerating deployment of new infrastructure construction, as well as the rapid development of digital technology, innovation, and application, to actively enhance capabilities in whole process planning and consultation, general contracting, general integration, and integrated delivery, achieving relatively fast growth. Revenue increased 7.5% year-on-year.
Domestic operators have been shifting their investment focus to intelligent computing network and industrial digitalization. Due to the increasing scale of new infrastructure construction, TIS and ACO businesses from domestic operator market maintained favorable growth, up 8% and 24% year-on-year, respectively. New contracts in domestic operator market was RMB 54.7 billion, up 4.9% year-on-year. We focused on new demand on digital infrastructure, dual carbon and industrial digitalization from domestic operators. Over half of new contracts was from digital infrastructure, such as data center and cloud. Moreover, we continued to penetrate telecom network infrastructure construction and maintained stable market share in traditional advantaged businesses, such as comprehensive installation and maintenance. In overseas market, we made steady progress in the implementation of overseas projects in regions such as the Middle East and Southeast Asia.
Revenue of the market increased 1.2% year-on-year. There is huge market potential in overseas market due to strong demand from digital economy along the Belt and Road. Investment increased from overseas telecom operators. Steady growth in overseas investment by Chinese companies. We will further optimize our deployment overseas, penetrate key regions and key customers, focus on key businesses such as communications, data center, dual carbon, energy and electricity, smart products and services, and strengthen risk control with a view to achieving safe and effective development.
Facing ample opportunities from digital economy, as the largest telecom infrastructure service provider and the main force in digital infrastructure construction, we'll further integrate communications technology, CT, information technology, IT, data technology, DT, and operational technology, OT, to penetrate high-value market potential of strategic emerging industries, including digital infrastructure, Smart City, green and low carbon, emergency management and security. Providing customers with full life cycle integrated services, from consultation and planning to construction, in order to promote the company's transformation towards professional and high end of value chain, and achieve investment in both scale and efficiency in key markets, including domestic operator, domestic non-operator, and overseas markets. Above is the business overview. Next, let's invite CFO, Madam Zhang Xu, to present the financial results. Thank you, Mr. Yan. Good afternoon, ladies and gentlemen.
I will now present our financial results for the first half of 2023. The table shows our key financial indicators, such as revenue, cost, profit, and cash flow for your reference. I will introduce our key financial performance. In the first half of the year, the company persisted in a principle of effective improvement in quality and reasonable growth in quantity, achieved continued improvement in operating efficiency. The growth of major profit indicators accelerated higher than revenue growth, with a growth rate of gross profit, operating profit and net profit at 7.4%, 7.8%, and 7.3% respectively.
We implemented various measures to improve the quality and efficiency, such as focusing on the development of high-value business, strengthening the management of low gross margin projects, enhancing the cost control on materials and subcontracting, as well as strengthening the capital management and tax planning. The above measures promoted the notable improvement of the company's operating efficiency and resulted in the continuous recovery of the gross profit margin and net profit margin. In terms of cost structure, the company implemented multiple measures to comprehensively strengthen the cost control. As a result, the growth of materials cost and subcontracting charges, in particular, dropped significantly compared with recent years. For the key materials cost, the company improved its operating efficiency by digitalizing the procurement system and increasing the proportion of centralized procurement.
For subcontracting charges, the company was devoted to strengthening its self-sufficient capabilities in marketing and delivery, with favorable results through enhancing the whole process of subcontracting management. For direct personnel costs, the company continued to improve the labor productivity and the direct personnel cost as a percentage of revenue continues to decline. For SG&A, SG&A cost as a percentage of revenue increased slightly due to factors such as resumption of economic activities. The table lists out the key indicators of the company's balance sheet for your reference. As of 30 June , 2023, our liabilities to asset ratio and debt to capitalization ratio were 64.1% and 2.3% respectively. The solid financial position will lay a solid foundation for the sustainable and high-quality development of the company.
In the first half, the company continued the high-quality development trend in last year, and we believe there is a potential for China Communications Services to further increase its value in the capital market due to the following factors. First, the blessing from national policies. The policies such as Digital China and industrial trend, including AI and industrial digitalization, bring ample room for development. Second, the solid leading position of the company. As a new generation integrated smart service provider, the company possesses over 70 years of experience in communications industry and has good operation, cooperation, relationship with customers. It is also equipped with distinguished advantages of consultation and design, as well as integrated general contracting capability. Third, the emerge of profitability inflection point. The major indicators of the company's operating efficiency have maintained a positive trend in recent years.
Coupled with good top, good cash flow, they strongly supported the company to pay sustainable and steadily increasing dividend to shareholders. Amid the factors such as solid fun- fundamentals, favorable policy support, promising development prospects, the proportion of company's high-value businesses has gradually increased. There is great potential for high-quality development. We believe that the company's valuation has room to increase. Now we're very pleased to answer your questions. Thank you.