Ladies and gentlemen, good afternoon. I am from China Overseas Land & Investment Limited, Wu Yi from Corporate Communications Department. Welcome to China Overseas Land & Investment Limited's 2022 annual results presentation. We are now being connected in Hong Kong for this exchange session. We have in attendance China Overseas Land & Investment Limited Chairman Mr. Yan Jianguo, Deputy Chairman and Chief Architect Mr. Luo Liang, CEO Mr. Zhang Zhichao, Vice President Mr. Guo Guanghui, CFO Mr. Lu Xijie. There are three parts in this presentation. First of all, Mr. Guo will go through a 2022 brief results report. After that, Mr. Yan will engage in a short exchange with you, followed by a Q&A session. You may leave message on the phone or on the webpage to ask questions. May I invite Mr. Guo to make a report on the 2022 results.
Good afternoon, analysts and investors. Now let me begin to present to you the 2022 annual results of China Overseas Land & Investment Limited, accumulating momentum for long-term success. The presentation comes in three parts. First, we review our annual results highlights, and next, move on to the business and management review. We will walk through the group's outlook and strategy in 2023. Finally, we will have a session to exchange ideas. First of all, we present to you a summary of the group's 2022 annual results highlights. In 2022, the global economy was impacted by factors including COVID-19 pandemic, the Russia-Ukraine war, and US dollar interest rate rises. The Mainland China's economy faced triple pressures. With weakening of growth expectations for the domestic economy and national income, domestic real estate market continued to decline, entering a slump.
Despite the sharp downturn on the market, the group actively responded to various challenges, gained momentum, and forged ahead against the market headwinds to achieve quality development. Result highlights include the following aspects. First, contracted sales and cash collection performed well, and the group's position in the industry was further enhanced. In 2022, contracted sales of the group series of companies reached RMB 294.8 billion, ranking top five and top three in the industry in terms of gross sales and attributable sales, respectively. Sales quality was further improved with cash collection rates remaining at a high level of 93.1%. Second, the group maintained a leading position in land premium amount to drive sustainable development. The group strategically acquired Quality Land Bank.
In 2022, group series of companies' total land premium reached RMB 120.9 billion, among which the land premium of the group reached RMB 110.7 billion, maintaining leading position in land premium amounts. The group actively seized M&A opportunities and invested more than RMB 10.7 billion in major cities. Meanwhile, the group further focused on high-tier cities with new sellable resources in first-tier cities of the group, accounting for 48.1%. Third, the group exhibited financial stability with 59.15% of liability-to-asset ratio, 45.16% of net gearing, 3.57% of average borrowing cost, and RMB 110.3 billion of cash on hand. Among the volatile fluctuations in the real estate industry, the advantage and stability of the group's financial resources are more outstanding.
Fourth, the group maintained leading position in value creation. Although the industry's profit margin keeps dropping, the group bolstered an improved cost and advantages and refined management. SG&A as % of revenue was 3.6%, which remained low in the industry. In 2022, the group realized core net profit margin attributable to shareholders of 13.5%, among the highest range in the industry. Core net profit attributable to shareholders was RMB 24.4 billion, maintaining an industry-leading amount. The second part reviews the business and operations in 2022. In terms of contracted sales, facing a declining market, the group looked shrewdly at the market and operated prudently and steadily. With hard work and collective efforts of all colleagues, the group realized a growth in market share, and its industry position was strengthened against market headwinds.
In 2022, group series of companies contracted sales outperformed the industry with market share up 0.18 percentage point. Growth sales ranking and attributable sales ranking of the group series of companies rose to top five and top three in the industry, respectively, with average selling price of 21,251 RMB per square meter, up 8.7% year-on-year. For cash collection, the group focused on cash flow management to strengthen cash collection. Group series of companies realized a cash collection of 274.3 billion RMB, with overall cash collection rates of 93.1%, of which cash collection rates in domestic market reached a high level of 95.1%, maintaining a leading position in the sales quality. The group had competitive advantage in sales focusing on key cities.
During the year, the group further focused on major cities and mainstream locations. Sales contribution from first-tier cities, including Hong Kong and Macau, and major second-tier cities continued to increase and achieved contracted sales of over RMB 192.1 billion, accounting for 65%. The group further market penetration with 30 cities ranking top three in terms of market share. The group had a leading market share in sales in key cities. In 2022, 7 cities achieved contracted sales of over RMB 10 billion, including Beijing, Tianjin, Shenzhen, Guangzhou, Xiamen, Hangzhou, and Hong Kong. In particular, Beijing's contracted sales reached nearly RMB 50 billion, and market share ranked first. In terms of land investment, in a significantly declining land transaction market, the group continued to invest and its land premium amount is at a leading industry level.
In 2022, the total land premium of group series of companies was RMB 120.9 billion, corresponding saleable resources of RMB 240.3 billion. Adding the equity acquisition of Guangzhou Asian Games City, Xuzhou and Jinhua projects, and continuous investment in the urban renewal projects, including East Jianguo Road project and Beijing City Town projects, et cetera. Land premium was RMB 135.5 billion with corresponding saleable resources of RMB 266.7 billion. During the year, total new land premium of group series of companies excluding COGO reached RMB 110.7 billion, corresponding saleable resources of RMB 213.9 billion.
Adding equity investment of Guangzhou Asian Game City and urban renewal projects, new land acquisition premium reached RMB 124.4 billion, corresponding to RMB 237.8 billion. Among which the group series of companies excluding COGO, acquired 34 land parcels in first-tier and major second-tier cities, with total new land premium of RMB 94.6 billion, accounting for 85%, up 11 percentage points year on year. Corresponding saleable resources of RMB 186.2 billion or 87%. The group remained active in non-public and M&A markets, and acquired quality land through multiple channels. During the year, the group leveraged the advantages of financial stability and ample cash to focus on quality assets in hi-high tier cities with investment of more than RMB 10 billion in M&A projects in three major cities, Shanghai, Guangzhou and Chengdu.
At the same time, the group continued to develop quality urban renewal projects such as East Jianguo Road project, Beijing City Town projects and Jigutian, Longxiang and Longguan, Longgang Nanyue projects in Shenzhen, with investment of about RMB 10 billion. East Jianguo Road project and Beijing City Town projects will be launched in 2023, corresponding saleable resource is over RMB 50 billion. In addition, the group also adopted innovative investment models to acquire quality projects in Qingdao West Coast new area. The group maintained a sizable and quality land bank, as at the end of 2022, group series of companies' total land bank was 68.42 million square meters, corresponding saleable resources of RMB 1,150 billion.
Of which group series of companies' total land bank excluding COGO was 43.89 million sq m, with attributable land bank of 37.58 million sq m. The group had a quality land bank with a focus on major cities. Group series of companies land bank excluding COGO in first-tier cities, including Hong Kong, and major second-tier cities was 28.47 million sq m, accounting for 76% of total land bank. The group adhered to customer orientation, continued to create excellent products and provided quality services. In terms of products, the group tailored product design to each city to meet differentiated requirements of customers to strengthen product competitiveness. Flexible units lodged by the group received recognition from the customers. In addition, the group has obtained accumulative 290 patents in innovative green building technology to create excellent products.
For services, the group adhered to customer orientation and provided quality services. During the year, the group delivered 76,000 residential units with 100% on time delivery rates, demonstrating our strength in delivery. In addition, customer satisfaction level of the group remained top three among the top 20 developers. The group adhered to customer orientation and customer care, and timely responded to customers' need. While the industry's profit margin keeps decreasing, the group succeeded in refining professional management, as well as continuously reduced cost and increased efficiency, strengthening cost and advantage. In 2022, net profit margin attributable to shareholders was 13.5%, gross margin 21.3%, maintaining industry leading value creation capability. The group announced final dividend of HKD 0.40 and total dividend of HKD 0.80 for the year.
Dividend accounted for 30.8% of core net profits and 37.4% of core net profit, including net foreign exchange gains and losses, creating continued returns for the shareholders. During the year, the group's SG&A, as percentage of revenue was 3.6%, with average borrowing of 3.57%, maintaining at a low level in the industry. In terms of financial position, the group upheld its robust financial position, maintained low liability to asset level and optimal debt structure. As at the end of 2022, excluding presale proceeds, liability to asset ratio was 53.69% and net gearing was 42.91%. After subtracting the presale proceeds of properties, moreover, every metric maintained excellent performance. Residential properties had no off balance sheet financing and perpetual bonds so as to maintain all by 6%.
Fixed-rate debts as percentage of total increased 8.6% - 49.4%, demonstrating its financing advantages. Under the circumstances of frequent occurrence of credit risk in the industry and intense financing environments, we had the highest credit ratings and smooth our financing channels, and continued to exert our financial advantages. In 2022, the group successfully issued green notes of RMB 4 billion in total, including the first green interbank notes, and issued the largest ever carbon neutrality CNBs in the domestic market at issuance of RMB 5 billion. In addition, the group also completed first M&A loan supported by the Central Bank. For unbooked presale, as at the end of 2022, the group series of companies unbooked presale was RMB 245.3 billion.
Group series of companies excluding COGO attributable unbooked presale was RMB 172.7 billion. Unbooked pre-sales remained steadily, bringing positive impact to secure the revenue and profits of the group. In 2022, despite the impact of COVID-19, revenue from commercial properties achieved steady growth against market headwinds, a growth of 1.8% year-on-year to RMB 5.26 billion, up 7.7% year-on-year, excluding rental relief. During the year, the group expanded asset light business to further unleash asset management capability. Asset light business reached 94,000 square meter, accounting for twelve. Office building remained steady with operating efficiency at a leading position, supported stable growth in revenue from office building.
Newly signed GFA in 2022 reached 840,000 meter, million square meter or 840,000 square meter, up 12% year-on-year. Cornerstone tenants with GFA over 2,000 square meter accounted for 45% of, and an excellent opening rate of 91%. The group accelerated corresponding to GFA of 880,000 square meter were launched in 2022. 20 new projects will be launched in 2023. GFA of commercial properties owned by the group series of companies will increase 60% after all. Scored 91 in Refinitiv, ranking the first among 479 developers. In addition, the group maintained a leading position in ratings of Sustainalytics and Mio Tech. In terms of environments, 100% of newly built full fitted projects of the group met at least one-star green 0.03 million square meter certified GFA.
During the period, breakthroughs have been made in green buildings and the number of green building benchmark projects have been successfully established. The company continued to promote green supply chain management with 62% of suppliers obtaining green product certification. For social responsibility, we attached great importance to stakeholders, including employees, customers, partners, and society, and kept corporate social responsibility in mind. In 2022, employee satisfaction scored 82 points, with average training hours of 93 hours. Overall customer satisfaction was 90 points, ranking top three among the top 20 developers. For corporate governance, we have incorporated climate change risk and ESG risk into our risk management database to strengthen ESG governance.
The climate scenarios analysis of RCP 8.5 and 4.5 according to TCFD framework was completed. Measures were proposed for representative buildings to adapt to climate change so as to enhance the group's climate risk management capability. The third part is outlook and strategy. GDP growth target is about 5% in 2023, a progressive target. The proactive fiscal policies will enhance the efficiency. A series of policies were introduced to support demand from first-time home buyers and upgraders, new citizens and young people, which will effectively boost the demand. Property market is expected to stabilize and rebound. The group will continue to forge ahead, strengthen its competitiveness, and proactively accumulate strength for sustainable and high quality development in the future. Key corresponding strategies include the following.
First, adapt to the second phase of the property market, adhere to the strategy, and pursue innovation through integrity based on new development model. Secondly, focus on major cities, lift market share of residential properties, and accelerate development and efficiency of commercial properties. Third, strengthen customer orientation and enhance product quality and value creation capability. Fourth, create organizations, systems and teams adaptable to the second phase of property market. Fifth, refine digitalization-oriented management and reinforce flexible management capability. The 2023 targets are presented next. The central government re-emphasized that the property sector was one of the pillar industries of the national economy, and a series of policies were introduced to support demand from first-time home buyers and upgraders. The property market is expected to stabilize and rebound.
From January to February, contracted sales of group series of companies reached 40.6 billion RMB, up 58.5% year-on-year. Group series of companies has ample saleable resources of 790 billion RMB, with first-tier cities and major second-tier cities accounting for 62%. The group is confident to achieve high quality development with 20% growth in contracted sales. The group will accelerate project launches in 2023, and internal growth and external expansion will support 30% growth in commercial revenue. In terms of land investment, the group will adhere to its positioning in major cities and mainstream areas, and its investment disciplines to maintain industry leading investment amounts and sustainable development momentum, striving to achieve double-digit growth in the attributable new land premium. During the turning point of the industry, challenges and opportunities coexist.
In 2023, the group will continue to gain momentum to forge ahead and endeavor to achieve a steady growth in net profit. That's all for my presentation. Thank you.
Thank you, Mr. Guo. Next, may I invite Mr. Yan to go through a brief remark. Mr. Yan, please.
Analysts, welcome to China Overseas Land & Investment Limited's annual results announcement. Just now, Mr. Guo had already presented last year continued to decline. Our revenue and profits have seen certain degree of decline. The reasons of decline in large volatility in exchange rates. In 2022, exchange rates loss on the accounts was quite big. These factors and impacts are such that we have not reached our targets. In the... this is a critical action in the industry.
We are going to remain progressive and go for sustainable growth, refined management, and we will accumulate resources and increase our growth momentum. I would like to talk about and share with you three of my reasons for confidence about the market and industry. First, macroeconomy and property sector adjustment and management measures have led to good external environment. We have confidence in the recovery of the industry. During the two sessions, the government's working report said that economic growth target is growth and mid-stability. Fiscal policy is there to stimulate demand and to guard against risk. This is a very favorable external environment for our industry. Based on the current situation in Q1, turnover of residential property has already ceased the decline, especially in Tier one, two cities.
We have seen positive development sign. The second factor of confidence is that now we are in a transitional period in the industry, and we are maintaining our leading position. In the second phase of development, we are confident to maintain high-quality developments. The development model is changing. In the second phase, comparing with the first phase in terms of development model, there are a few changes. Of course, I think other peers have already shared a lot, and we have talked about these in the past two years. There are three points. One, changes in the market environment. In the second phase of the industry, we will see a high growth rate sale of property market. In the second phase, there will be a buyer market.
Besides, land is the king, scale expansion was given much importance. High leveraging and high turnover, that's the old model. Under the new model, well, recovery comes first for property companies. Financial stability is most important. Core business is being given attention. Green, smart and flexible customization are there to upgrade products. Under the old model, property enterprises' management is different from the current situation. Under the new model, property companies need to enhance, refined, standardized and digital management standard. We have to enhance our modernization of corporate governance. For our company, in terms of development model, we are actually transiting towards the new model. In the second phase, we are confident in maintaining high growth.
The third point is, we have actually laid a strong foundation, and we have strengthened our competitive advantage. We have confidence to achieve improvements in our operating results amid stability. We have stable foundation and good resources. In terms of a firm foundation, at the turning point of the industry, our competitive advantages are now more apparent in terms of our layout in cities, saleable resources, advantage in financial funding, advantage in financing costs and also cost of production. Besides, we have also good resources. In the past two years, we invested in acquiring land. The amount is leading in the industry. Return rate of our new projects has risen. Besides, from 2021 to 2023, our commercial projects are gradually launched. We believe that there will be high speed growth this year.
In terms of our annual targets, we said that our goal is to. Thank you.
Thank you, Chairman Yan.
Let's proceed to Q&A. Company, can the meeting secretary take the first question? Thank you.
Results and financial performance, I have to commend you. Just now, in Mr. Guo's presentation, and also your advantage, as a company, I think, it is good for you to grab more market share. If you look at changes in the market layout, if you look at your future growth and potential and targets and momentum, how do you see, if you consider a profit margin, what will be your target and plan regarding land acquisition? I just mentioned my three points of confidence.
Just now, I said no matter whether we are talking about 2023 targets or future targets, our industry market structure and also industry layouts will see a lot of change. Our peers have shared many points. We think first, concerning market scale, it will come down a bit, and then it will stabilize. Well, RMB 4 trillion market is still there. It is still a good and big market. In the year 2020, RMB 1.7 billion. In 2021, RMB 1.8 billion. Last year, RMB 1.3 odd billion. Last year, it's down 26%. In the coming few years, I think there will be a RMB 4 trillion market. For market scale, it is enough to support the industry. It is still a big industry.
If you look at development model as such as now, from a Buyer's market to seller's market, from scale to efficiency. First of all, we want to be sound and stable and then profitable. Scale is not something we pursue a lot. That's about our growth model. For management model, now we adopt refined management, standardized, informatized, and also digitized management. In the future, we attach more importance to property owners' demand and also operating efficiency and product innovation. Development model definitely will change. There are variances. Of course, there is more variance among cities. There is more divergence. It is more apparent last year. The more volatile the market is, the more downturn there is, Tier One cities will show stronger resilience, volatility will be bigger in Tier Three, Four cities.
When the economy and the industry stabilizes, volatility will decrease. In the coming, in the future development, population, industries, these factors will affect the industry's development in a certain city or region. City divergence is inevitable. Concentration in the industry is expanding. Many property companies have made an exit, so the total number is smaller, but then the market scale has increased. Last year in the market, it was down 26%, but then our market share improved. Industry concentration in the coming years will come down further. Given this industry layout, if we look over a longer term, and if we also consider our strategic targets for the 14th Five-Year Plan period, we will maintain the original targets. For our fundamentals, they have not changed much.
It has been a few years since we talked about the turning point between first half and second half of the property market, and there was the pandemic. In the mid to long term, the factors of volatility are short term. Economic and industry long-term development, and also our company's operation, is about a long-term raise. I think to certain enterprises, all these factors of volatility have caused bigger impact. There is also big impact on us, but not in the long term. We will do a lot of strategic enhancements and adjustments to our tactics. For example, our strategic goal and direction will not change. We hope to become global leading property developer. If you look at our business structure, today, tomorrow, and the day after tomorrow, our structure and direction will not change.
We will insist on the direction of growth. In these two years, because of market volatility, our growth was not as good. There may be negative growth. We are still stable. We will maintain a stable and upward trend. This year we have confirmed the 20% target. For residential and commercial property developments, we will follow five-year plan. For example, for residential development, first, we will insist on residential development as our core business. We will maintain above 90% investment into it. No matter whether you talk about profit contribution, and turnover rate, if you look from a business point of view, residential development is still quite a good business. Second, profitability. Profitability led. In other words, we will not give scale. Say profit comes first. All along, this has been our approach.
Number three, we will expand our scale in an appropriate way. That is not the most important target. While we can maintain financial stability, we will also look at market share. The industry concentration will be higher. We will expand our market share. For residential property developments, we have much confidence. We have resources, capabilities, and confidence to do a better repeat the details. In these three years, number of new projects has increased a lot. In the coming few years, commercial new projects which will be launched. When there is high growth rates in revenue. Overall speaking, regarding industry's development and also our trend in the coming few years, the above is my view.
The next question is about land and strategy. I will defer to Mr. Zhang.
Yes. Thank you for your questions.
If you look at land bank, last year when the market was under pressure, well, we actually did expansionary inflation. For our own company, we invested CNY 124.4 billion in the open market and M&A in Shanghai, Beijing. In terms of large city renewal or urban At the beginning of the year, we have CNY 360 billion worth of saleable resources. Total saleable resources, CNY 667.7 billion. I think this is going to lay a strong foundation for future development. This year, we acquired 40+. Last year, 21 projects were launched and right now 31 already. If you talk about our turnover efficiency and also return, I think it is the best situation this year. We have a lot of confidence in this year's sales.
First of all, this year, in terms of our investment strategy and targets, we will be more aggressive. In terms of our guidance, we gave a double-digit growth target. In the process, we will also look at our sales, cash, income, and our financial situation to make necessary adjustment and arrangement. Besides big land investment in the past years, in terms of land scale and structure, overall speaking, it's last year in tier one, two city sellable resources amounted or accounted for 87% in new investments. This year, for sellable resources, 73% are in tier one and strong tier two cities. This year, in terms of our investment mission, we will focus on tier one and strong tier two major cities. Besides, we will also consider, for example, Pearl River Delta, Yangtze River Delta major cities.
Given our investment scale and volume, we can consider certain breadth of investment. In those belts, there are good locations and sites which present opportunities. Number three, we will insist on some criteria of investment. Usually, we focus on net profit margin of 12%. At the same time, we will pay attention to cash flow and IRR. In principle, usually not lower than 12% of IRR. That is a criterion that we adhere to. For some major cities and projects, we will also make specific judgment and decision. Overall speaking, we emphasize our investment discipline. When it comes to profit margin, profitability, we are at a leading level in the industry. We will give full play to our strengths and our financial health and also adequate financial resources in terms of M&A, urban renewal, and also land acquisition.
We hope to make good use of our reserves. Next year, in relation to land bank, we have quite a lot of confidence in our land bank next year. Thank you.
Thank you, Mr. Yan and Mr. Zhang. Meeting secretary, can you take the next question?
Next question. Karl of JP Morgan, please.
Greetings, I'm Karl of JP Morgan. Two questions. First, about the 20% growth target. After this target was released, many investors were excited because all along, your style is relatively more conservative. This year, you give a target of 20% growth, so we are happy. We would like to ask, how should we interpret this 20% growth? Is it towards the low side, or do you have a higher internal target, or have you included some M&A possibilities to achieve 20%?
Do you need to do more M&A? My first question is about this 20% growth target. Second question is about delivery. Last year, delivery was down around 30%. What are the reasons? Is it because of delay in delivery? Why is there a delay for 2023? Do you have a clear target about delivery as to year-on-year growth?
Thank you, Karl. First question, 20% target. Whether it is a static or dynamic target, I will ask Mr. Zhang to answer. Regarding delivery last year and related problems, I will defer to Mr. Guo. Mr. Zhang, please.
Thank you for your questions. Just now, I basically explained that our full year sellable resources amounted to RMB 760 billion. It doesn't include the new investments and also the sellable resources available afterwards.
At the beginning of the year, we had RMB 450 billion sellable resources. In terms of resource reserve, it is very good, and also the structure is satisfactory. For our own company, full year sellable resources amounted to RMB 667.7 billion. For 0688 ourselves, our total land resources, the main structure is in the early period. That is first half of the year, more than 50%. For first half of the year, 60% share of the total. If you talk about the volume and structure and rhythm of our supply, it is very good. For the whole year, if you look at 0688, it is 73% sellable resources in Tier one and strong Tier two cities.
For the whole year, in our sellable resources, tier one cities account for 40%. That's our focus of investment. In the past one to two years, we seized market opportunities. Last year, given the market environment, we adopted the right operating strategy. Unlike some peers with high operating pressure, well, they had to offer a big discount to price. We strike a balance between the volume and price and also the relationship with profit. That's the arrangement we have put in place. Concerning completion of this year's sales target, we are confident. Internally, we may have a higher target. Thank you.
Let me answer your second question. In 2022, if you look at delivery, conversion, there was some volatility because in China and also overseas, there are impacts on the external economic environment, and there is COVID-19 and also in-industry related factors.
Concerning sales, there was also some impact on construction progress. The pandemic was very volatile. There was impact cost to our construction progress and also our property sales offices work. Overall completion GFA was 14.44 million square meters, and we achieved a 100% delivery according to contract. It is perfect delivery. Regarding 2023, if you look at our overall delivery and conversion, we are full of confidence. When it comes to revenue recognition, there may be double-digit growth. We have confidence because of two reasons. First, we have the foundation. The foundation was such that in 2022, there is RMB 142.7 sale, unbooked sales. Some will be recognized in 2023. We have the resources as well.
As Mr. Zhang said, sellable resources in 2023 was RMB 790 billion. Our goal is a 20% growth target. For unbooked sales, there would be a very positive boost effect. In 2023, for revenue recognition, I think there is going to be a very positive impact. We have confidence that in 2023, we can achieve double-digit growth. Thank you.
Thank you, Mr. Zhang and Mr. Guo.
Meeting secretary, please take this next question.
Thank you. Next question is from Haitong. Please go ahead.
Thank you. I am from Haitong Securities. I have two questions. First, recently, you announced your profit margin and also the volatility in these numbers. Last year, in the financial statements, in terms of profit margin, if you talk about, for example, gross profit margin, would that be bottoming up or a more optimistic improvement?
My second question is, recently, it seems that consumption has been recovering in shopping malls and also in office buildings. You have enhanced your strength and your asset base. Are you going to have more arrangements about off-balance sheets arrangements? Thank you.
First question is about profit margin. We will ask Mr. Guo to answer. Second question is about commercial property. Perhaps, we will ask our Vice President, Mr. Guanghui , to answer the question. Mr. Guo. Thank you.
Let me take your first question. First of all, as management of China Overseas, well, you mentioned history. Yes, some provision has been made in our financial statement. The management is very prudent in this work.
In 2022, when the overall industry operates at a low level, there is also the impact from COVID-19, we followed accounting standards to make provision and impairment. This arrangement is reasonable and appropriate. Given such circumstances, our asset can be solidified. If you look at our total assets, it accounted for 0.3% only, a very small amount. Overall risk is controllable. That's the first point. Secondly, as you said, in 2022, our sales and also future gross profit margin, we have already shared with you the information. In 2022, our gross margin was 21.3%, core net profit margin 13%. These are industry-leading levels.
In 2022, in the sales process, benefiting from land acquired at very low cost in 2021, overall gross margin and also gross margin of our current revenue is more or less the same in 2022. During market downturn, we acquired quite a lot of quality land. In 2022, 50% of them have been launched. Work will continue in 2023, gross profit margin will recover. What I want to say is, for our management, we still believe that gross margin is only an intermediate process, we are more concerned about core net profit margin level. Right now in the land market, there is restriction on price and restriction on land price. How to realize gross margin? If you talk about the core metrics and also realization of core metrics, it is not as good as net profit margin.
Net profit margin has to do with precise investment, good design, good sales, precise sale and marketing. Each and every expense will affect the final net profit margin. This year, 13.5% net profit margin is at a leading level in the industry. We believe that with the efforts of our team, and when market environment stabilizes, our net profit margin will still maintain a leading position in the industry.
Thank you.
Thank you for your question.
Thank you very much, analysts, for your interest in the commercial segment. In 2023, I think it is going to be a very busy year. I think there would be economic restructuring and also important leverage for property development. If you look from a longer term perspective, I think risk is going to be an opportunity.
We have to build an advanced property development model. From that perspective, we will look at the impact on commercial business model. For China Overseas, we will not consider that as purely an exit. Regarding the company's business development model, we will make sound strategic moves. We hope that we will build a highly effective investment and financing cycle, and it should serve our company strategy. More importantly, efficiency of resources should be enhanced so that we can have high quality development. That is our goal. Right now for series, policy interpretation, apart from ground layer, assets requirements, there is the need for a number of conditions to make sure that there is healthy, stable operation of the business. Dividend rate will have to be market-oriented.
In the process, we follow this development logic and requirement and transfer it to our operating system, so that while we are in compliance with policies, we can also see virtuous cycle. If you are familiar with our company, in the past few years, we have been cultivating deeply into our city operation ecosystem. We have more than RMB 100 billion of asset scale. If you talk about our shopping malls, Huayu Cheng, Huayu Hui, and so on, we have three product series, and we keep on cultivating in tier one, two cities to be stronger and better. In, for example, Social Security housing and other areas, we have good resources and foundation. As you searches now, when this kind of public REIT arrangement is more mature, in the future, I think standard assets like office buildings can also be covered.
In this way, we have more advantage because for office we have quite good quality resources and also leading operating capability. At present, we will focus on our own resource endowments.
As Mr. Yan said, we will adopt refined management and enhance our financial management. Concerning this kind of promotion of REITs, we will do all preparation work required. Our operation and development capability and also our service capability in each segments, our commercial resources, all these will have to be better enhanced so that our asset operating efficiency and profitability can improve. Through the public REIT market, we can realize a release of our market value. At the same time, we want to contribute more return to shareholders. Thank you.
Thank you, Mr. Guo and Mr. Zhang.
Meeting secretary, please take the next question.
Yes. Thank you. Next question. Is from Cao of Bank of America.
Thank you. I have two questions that I would like to follow up. One, about land market. Just now you said that you will acquire land through multiple channels. The land market is rather hot, do you think you have more intention for M&A? If you acquire land in the public market or open market, there will be less opportunity and gross profit room will be smaller. On M&A, if you look at risk management, what kind of measures will you adopt? Second question about provision in 2022. When was those land acquired? What types are they and in which regions? What are the project types? Thank you.
Thank you. Two questions. First, about land market and land reserve.
In the past two months, it seems that it is difficult to acquire land. You asked about M&A. I will ask Mr. Zhang to take the question. The second question is about provision. In which projects did you make provision? I will ask Mr. Guo to answer. Thank you for your question.
In these months in the market, there was some stabilization and recovery. In major tier one and strong tier two cities, recovery is better. Looking at our sales end, there was some realization of that. In Q1, growth was quite fast. In January and February, there was the CNY effect, so land supply was smaller. In March, in mainstream cities, there is gradual land supply. We have taken active part and we won tender in two projects, RMB 4 billion of land premium.
No matter whether we are making open markets investment or M&A non-public investment, there is a criterion, and that is the quality of the project. In this market environment, we attach importance to the certainty and rate of return of project. On project certainty and rate of return, we hope that they will be even. We will not only go for increasing scale of land bank and blindly expand. In terms of M&A investment, we will not just sacrifice project quality. That is a basic investment discipline and strategy that we adhere. Besides, in large urban renewal projects, in M&A in the past two years, we did a lot. Let me briefly explain. In March or yesterday, there was the Zhongxinchang project which started, and on the first day we sold RMB 9.2 billion.
After two to three years of land investment, that's the result we achieved. Just now, Mr. Guo said in his remarks that was the Shanghai Jianguo East Road project, there was RMB 35 billion of demolition and relocation expenses. For this kind of core city, large scale urban renewal project, in terms of investment, our investment was quite adequate. Regarding this year, in terms of achieving our investment goal, we have confidence. Regarding investment channels, we will do a good job in both public and non-public avenues. For M&A, because of some legal issues, in some cases, we will also consider the conversion efficiency. On standards, we will also make sure that they are on par with public market criteria and so on, and all the required indicators. Thank you.
Let me answer your second question. Overall speaking, regarding the provision, in the past land acquisition process, there was some cooperation. There are two types. Villa, car parks, and so on. In 2022, there were opportunities to sell in package. There are government departments and agencies which acquired as a whole. We seized the opportunity to sell and we recovered cash. As a result, there was provision. The overall effect was satisfactory. Our cash flow was early and satisfactory. We don't need to wait a long time, and we don't need to do write-off. The second type is collaboration project. Last year, given the overall market downturn, the projects have to be exchanged for cash flow in order to achieve delivery, because we have to guarantee delivery.
For JV, there is an impairment provision in certain collaboration projects. Thank you.
Thank you, Mr. Zhang and Mr. Guo.
Because of time, we will now take the last question. Meeting secretary, please take the last question.
Last question is from Guo Zheng of Guangfa. Please go ahead.
Thank you, management. I am Guo Zheng from Guangfa Securities. I have two questions. First, in 2023, your cost is still at a leading position. If you look at current market, domestic and offshore financing environment change, in 2023, will there be some more room to lower financing costs? For cross-border financing structure, is there any adjustment plan? Second question is about SASAC appraisal of SOEs. Now, more emphasis is placed on ROE, so in the past you achieved high net profit margin, but also some leveraging.
In line with SASAC requirement and the three red lines and also a rather relaxed environment, in the future, do you have the plan to enhance ROE? Thank you.
Thank you. I think these two questions should be answered by Mr. Guo Guanghui. First question is about financing costs. Can it go further down in 2023? Second question is about ROE and also a new appraisal change by SASAC, will there be impact on us? In terms of our operation, will there be any change? Mr. Guo, please.
Thank you, Guo Guanghui. Overall speaking, in 2022, given the market situation, we paid attention to both onshore, offshore financing platforms and financing flow. Our average financing cost is 3.57%. This did not come easily, and we are leading in the industry.
In the process, we have done three work. Number one, in face of interest hike overseas and also large exchange rate volatility, while offshore flow is most important. We made structural adjustment in terms of currency, and we increased onshore RMB debt and reduced offshore debt. As a result, our RMB loans overall asset liability match is strengthened. In 2022, RMB debts accounted for 62.6%, up 2.5 percentage points year-on-year. We are stronger in our ability to hedge finance exchange rate risk. In 2023, we'll continue to do more and strengthen this area. Number 2, for fixed rates arrangement, we have made advance arrangement. Onshore, offshore, we increased the share of fixed rate loans, especially in first half last year.
We expected that interest hike is going to be faster, especially overseas in the US and EU. We took the initiative to take out some fixed rate offshore loan. In 2022, 49.4% was fixed rate. For the term structure or durability structure from overseas interest hike rates, were actually on the average, they are accelerating interest hikes, so we have to look at our own duration. We enhanced our work in duration. Three year and above duration, they accounted for 40.4%, up 11.4 percentage points year-over-year. With these three work, our final financing cost is leading in the industry. In 2023, the situation is more complicated. On one hand, we have to face up to further interest hike overseas.
How can we lower our offshore debts further? Besides, Chinese economy is recovering and there is strong upward momentum. Will there be the case that onshore debts cost and interest rates will also go up? We do three work. First, we follow up interest rate and exchange rate policy, both onshore and offshore. Through the structural adjustments that we mentioned just now, we will respond to the situation. Secondly, for offshore, we will increase sales of properties in order to offset and hedge foreign exchange risk. Besides, by more interconnection between the two places, financing and funding platform, funding pool can improve. Our overall financing costs can be redistributed. By means of rolling test, internally, we hope that we can maintain the same financing costs or even lower it.
Of course, it all depends on overall funding arrangement and business development needs. That is the direction of our effort. Thank you. Second question, please. Yes, yes. Sorry. There is another question asked about SASAC's new appraisal method. One profit and five rates. Basically, we must have profit return, and there must be profits and revenue with cash. This year in 2023, our team has already explained. In terms of sales contracts, we target as a 20% growth. In terms of revenue, we hope to have a double-digit growth. In terms of profit return requirements, the management has confidence. Because we have profit support and also profit return rates, in terms of ROE will realize an improvement. Of course, ROE is an integrated consideration factor.
There will be some increase and some decrease. There will be collaboration and also dividend payouts. It is going to be an integrated consideration. With our efforts, with our stable operation and sustainable development, we'll continue to upgrade our ROE level so as to pay back to shareholders and society. Thank you.
Thank you, Mr. Guo. Thank you for joining China Overseas Land & Investment Limited's 2022 annual results announcement. Thank you, analysts and investors, for your long-term interest and support for China Overseas. On the coming days and next week, we will conduct roadshow for more in-depth communication. We will conclude the presentation session here. Thank you.