Earnings Call: H2 2020

Mar 29, 2021

Ladies and gentlemen, good afternoon. I am Wu Yi from China Overseas. Welcome to China Overseas 2020 Results Presentation for Investors. This presentation is that It will be conducted in both China and Hong Kong. The management will communicate with you. So let me introduce to you our management in Shenzhen and Hong Kong headquarters. In attendance today are Vice Chairman, Executive Vice President, COO and Chief Architect, Mr. Luo Liang. China Overseas Land and Investment Limited, Mr. Zhangji Chow, CEO Vice President, Mr. Guo Guang Hui. These 3 senior executives are in Shenzhen. China Overseas Land and Investment Limited CFO, Mr. Lu Xuezie is in Hong Kong. The Chairman, Mr. Yan Jian Guo, because of other business engagement, cannot attend this results presentation. Mr. Yan has prepared a video to send his greetings to investors and analysts. So now please enjoy the video. Thank you, Mr. Yan, for his sharing. This presentation is divided into 2 parts. First, Mr. Kuo will go through the 2020 results. After that, there will be a Q and A session. So on the phone or on the Internet, please feel free to leave your questions. So now let me invite Mr. Guo to present the results. Dear analysts and friends from the investment community, good afternoon. I now present to you COLI's 2020 results. The theme of our annual result this year is 2 innovation through integrity, robust and secure to achieve growth. The presentation comes in 3 parts. First, we'll review the performance an operation overview in 2020, and then walk you through the group's 2021 outlook, strategy and targets. First, we present to you the group's 2020 overall performance. Under the impact of COVID-nineteen pandemic, in 2020, Global economy was in severe recession. As China brought the pandemic situation under control and resumed work By implementing pandemic prevention and control measures as well as promoting economy and social developments, China's economy became first to recover from negative growth. The group had overcome impact of the pandemic and achieved quality growth in business performance against Headwind, including 5 highlights as shown below. 1st, double digit sales and revenue growth against market headwind. Contracted sales rose 12.5 percent year on year to JPY 360,720,000,000,000, surpassing average growth rates of top 10 Real Estate Companies. 2nd, the group maintained industry leading value creation ability with a double digit growth in profit attributable to shareholders, excluding fair value gain, increased by 10.9 percent to JPY 38,030,000,000 and net profit margin remained among the highest in the industry. So for profit attributable to shareholders, it showed a double digit growth at 10.9%. 3rd, the group is committed to create consistent growth in value return. Dividend payout ratio was over 30% and dividend per share was HKD 118, increasing by 15.7% year on year. Final dividend reached HK0.73 per share, up 28.1% year on year. 4th, the group stays proactive in land acquisition, leading the industry in terms of speedy growth in new land Investment. Attributable land premium of the group series of companies in 2020 was JPY170,470,000,000, increased by 24.8% year on year. Attributable land premium of the group in 2020 was KRW 131,840,000,000, increased by 16.3% year on year together with partially paid land parcels of Shanghai East Tian Guo Road Project, Beijing's electricity and Suzhou Wuzhong District, Taihu project. The group's attributable land premium in 2020 reached 144 JPY 7,000,000,000, exceeding the JPY 140,000,000,000 investment budget of the year. 5th, the group maintained financial stability with liability to asset ratio being 60.1 Chen. Net gearing being 32.6 percent average borrowing cost being 3.8 percent cash on hand, JPY 110,470,000,000. The tightening real estate financial supervision policies highlighted strength of the group in financial resources, demonstrating stable and enduring growth. The second part reviews the business and operations in 2020. In terms of contracted sales, group series of companies achieved double digit Contracted sales growth against the market headwind, which rose 12.5 percent year on year to 360,720,000,000, And the JPY 400,000,000,000 sales target in 2020 was accomplished. In 2020, average selling price was JPY 18,800 per square meter, up 5.3% year on year. Average selling price, excluding Gogo, was 21,300 per Square Meter, which was among the highest in the industry. During the 13th 5 year plan period, contracted sales increased to 1.5x CAGR 20.4%. In terms of cash collection by strengthening cooperation with banks and enhancing efficiency of mortgage drawdown, The group series of companies achieved cash collection of JPY 342,550,000,000, up 14.5 percent year Cash collection rate maintained at a high level of 95%. The group kept its focus on major cities to maintain quality operation. Sales revenue in major cities grew consistently. In 2020, sales revenue in 1st tier cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Hong Kong reached JPY 112,600,000,000. Six projects of the group series of companies ranked top 15 in national single project sales, namely Zhenrumansion Shanghai the Paragon Jinan jianguali Shanghai Jade Lane Shenzhen La Cite Beijing and Guangzhou Asian Games City. Our market share ranked top 3 in 18 cities. In terms of land acquisition, The group increased investments and accumulated land parcels proactively to ensure sustainable development. For 2020, group series of companies invested an industry leading total attributable land premium of JPY 170,500,000,000, among which the group acquired 64 land parcels With attributable land premium rose 16.3 percent to KRW 131,800,000,000. Together with the above mentioned projects of Shanghai East, Tianhua Road, Beijing Citic City and Suzhou Taihu. Attributable land premium of the group rose 27.7 percent to JPY 144,700,000,000. The group adheres to investing in major cities, mainstream areas and mainstream products. 59.6% of new land investment was located in the 3 major metropolitan area in which first tier cities, including Hong Kong, saw an attributable land premium of JPY 43,500,000,000 accounting for 33%. The company promoted Blue Ocean strategy proactively To build large scale projects with strong owners in a big market, cooperative closely with state enterprises and enterprise units So as to acquire large quality land through multiple channels, in 2020, attributable land premium through multiple channels was RMB 32,700,000,000, 24.8 percent of total new attributable land premium. This included large scale urban renewal, Shanxi Town redevelopment, Industry Resources Integration as well as Large Scale Mixed Use Projects. In terms of scale and composition of land bank as of the end of 2020, Group series of companies' total land bank was 91,900,000 square meters. The corresponding total saleable resources was JPY 1350,000,000,000, among which group series of companies land bank, excluding Cogou, was 61,790,000 square meters. Attributable land bank 52,360,000 Square Meters. The quality land bank focused on core areas in mainstream cities. About 20.4 Percent of the group's land bank was in 1st tier cities and about 40.3% in 3 major metropolitan areas. In terms of profitability, the group maintained industry leading profit margin. In 2020, gross profit margin was 30.05 percent Net profit margin, 23.6%. Net profit margin, excluding fair value gain, was 20.5%, leading the industry in value creation. Meanwhile, the company constantly improved delicacy, specialization and digitalization and management, Achieved industry leadership in operation and management efficiency. In 2020, selling, general and administrative expenses as percentage of revenue was 3.3 Maintained at a low level in the industry, average borrowing cost was 3.8%, the lowest level in the industry. In terms of financial position, the group upheld Robust financial position, maintained low liability to asset level and optimal debt structure, was in compliance with 3 red lines So as to support momentum as well as stable and enduring growth, as at the end of 2020, liability to asset ratio 60.1% net gearing, 32.6 percent, maintained at a relatively low level in the industry. Interest Interest bearing debt was JPY 212,980,000,000, in which RMB interest bearing debt as percentage of total was 53.5%. Debt maturity within 1 year, 20.6 percent, showing limited repayment pressure and optimal debt structure. Cash on hand, JPY 110,470,000,000, which was well capitalized to capture market opportunities. Meanwhile, the group maintained highest credit rating in the industry and leading financing advantages. In 2020, the group was the only mainland developer issuing 15 year USD bond in the industry. The newly issued 5 year and 10 year USD bond The lowest yields ever for the company and in the industry in terms of the same ton of USD notes. The group successfully issued 2 tranches of CMBS With a total scale of issuance of JPY 6,700,000,000, the first tranche was the largest ever domestic green CMBS project with lowest issuing rates and earned Green Certification and CMBS of the Year at Frontier Awards in the 5th China Real Estate Securitization Summit. In terms of unbooked presales, as at the end of 2020, group series of companies' unbooked presales was 311,000,000,000, up 13% from 2019 year end. Group series of companies excluding Cogou attributable unbolked presales was JPY 185,600,000,000, up 17.6% from 2019 year end. Unbooked presales will be booked gradually, bringing positive impact on securing the revenue and profits of the group. In 2020, commercial assets of the group overcome the impact of the pandemic, achieving quality growth in core assets such as office and Shopping Malls. Revenue from commercial properties rose to RMB 4,400,000,000, achieving revenue target as scheduled. Revenue from commercial properties in the past 5 years saw a CAGR growth of 19%, maintaining faster growth rate. In terms of operation scale as at the end of 2020, total area under management of the group was 5,220,000 square meters, covering 28 cities. There were 81 held commercial properties with total GFA of 4,840,000 Square Meters and 7 asset light management projects With a total GFA of 380,000 square meters, commercial assets focused on core cities with a GFA percentage of 1st tier and core 2nd tier cities accounting for 86%, gross profit margin reaching 65.5%. Management scale of the group's offices reached a GFA of 3,450,000 square meters. Under the pandemic, office revenue grew against the headwind, growing 9.5% year on year to RMB 3,170,000,000, highlighting resilience in core business in which revenue from 1st tier cities accounted for 58.4%. During the year, 4 new offices opened in Beijing, Shenzhen and Lanzhou, respectively. 2 new asset light projects were established in Chengdu and Shanghai. Newly tenanted area of the year reached record high of 587,000 square meters and occupancy rates reached 85.9%. In 2021, 6 new offices in Beijing, Nanjing, Wuhan, Ning, Bo Zhuhai and Hefei will be opened, remaining a strong internal strength for growth. The group keeps leading Office Revolutions through quality management and innovative extension. Firstly, it had stable quality tenant mix, which demonstrates strong resilience as cornerstone tenants accounted for 44% and cooperation was built with over 250 Fortune 500 Companies. Secondly, it developed diversified businesses such as smart working space, Global Business Conference Center and International Nursery Center in office building so as to innovate and expand profitability model. Thirdly, it continued to expand asset light services by successfully developing 2 asset light projects in Chengdu and Shanghai. China Overseas Office Capital also gained market recognition with well known industry awards. In terms of shopping malls, revenue in 2020 was JPY 870,000,000. CAGR in the recent 5 years was 33%. During the year, 3 new projects were launched in Foshan, Chengdu and Lanzhou. In second half twenty twenty, projects operating overcome the impact of the pandemic immediately, with retail sales and footfall increased by 12% 8% year on year, respectively, showing resilience in operations. Average rents throughout the year increased by 9.7%, occupancy rates up to 97.5%. In 2021, 4 new shopping malls, respectively, in Beijing, Zhuhai, Ningbo and Wuhan will be launched, promoting the China Overseas Uni brand continuously. In March 2020, the group completed the 1st offshore equity acquisition during the pandemic, upgraded and redesigned Foshan Ying Yue Lake Uni Park within 90 days without closure, adjusting 75 brands and creating nearly 5,000 square meters of 4 themed sections. With the brand new quality and image, business performance of the project saw explosive growth. In January 2021, Year on year increase in sales was 27%. Year on year increase in footfall was 34%. Increase in new rental income was 21%. Displaying strength of China Overseas' uni brand in asset acquisition and enhancement capabilities. The group has accumulated ample 2 commercial projects. The number of offices and shopping malls is estimated to increase 23 21, respectively, after the launch of all commercial properties on hand. The increase in office buildings GFA was estimated to be 78%, increase in shopping malls GFA estimated to be 88%. In the future, the group will increase allocation to shopping malls with dual core business comprising office and shopping mall continue to support Several industry expansions yielded fruitful results. Under the national strategy driven by technological innovation, Taking advantage of the group's wide scale application of new technologies and new products, we expanded upstream and downstream investments, built a technology investment ecosystem. In 2020, the group established Ling Chao Supply Chain Management Company, further strengthened the cost advantage of centralized Procurement to building an integrated industry leading B2B service platform for buying and selling building materials. The group also established Haijichuan Technology Company Limited. Through cooperation with several high-tech companies, it focused on investing in smart space and smart community products, Technology Research and Development and Application and invest in technology based companies in related fields. We sincerely welcome fellow businessmen in upstream and downstream Enterprises to join hands, empower each other and grow together in an open manner. The group adhered to development's framework of being a company of 4 excellences, adding 64 new projects, obtaining green building certifications with certified GFA of 10,950,000 square meters. As of the end of 2020, the group has accumulated 379 certifications, a cumulative green GFA reaching 71,470,000 square meters. The company was obtaining higher rating in sustainable development as it was included in the newly introduced Hang Seng ESG 50 Index and was included in the Hang Seng Corporate Sustainability Index Series for 11 consecutive years, rated BB by MSCI ESG ratings as well as lowest risk weighting of ESG for Mainland Real Estate Companies. Meanwhile, the group promoted developments of Green Finance during the year and commenced climate change management Part 3 is outlook strategy and target. The group adheres to houses are for inhabitation, not for speculation. The real estate policies continue to be stable land prices, stable housing prices and stable expectation to promote healthy and balanced development. Looking Towards the second half of the real estate match, five segmentations will be the key characteristic. Firstly, market segmentation, in which 1st and second tier, strong 3rd tier cities will be the main battlefields. Secondly, enterprise segmentation, in which the 3 red lines financial supervision policy For real estate companies and the two red lines for commercial bank real estate loans and personal housing loans will speed up industry consolidation. 3rd, investment segmentation, in which companies with stable finances and strong capital have more opportunities. 4th, management segmentation, companies with Strong organizational and digital management capabilities will triumph. Lastly, product strength segmentation, in which good products and services are always the key to winning customers. Facing this market segmentation, the group adheres to the development strategy of focusing on major cities, mainstream areas and mainstream products, With Land Bank located mainly in 1st and second tier cities, as a green category company and a leading real estate company, the group benefits from ample finances an opportunity to further expand market share. By adopting full cycle digital management, the group maintains leading position in net profit. Besides With high standard and reliable quality, the group also leads the industry in terms of customer satisfaction. In the future, the group is confident to maintain competitiveness in the second half of the real On the long term, maintain leading residential contracted sales and pursue Tier 1 in terms of national commercial asset scale so as to target a steady total profit In the previous year, uncertainties in global economy increased With calm and effective action taken by the management and great efforts by all the employees, the group achieved solid growth amid uncertainty. Looking forward to 2021, under the continuous policy control, challenges and opportunities both exist in the real estate market, The group gives out the following operation guidance. The group will follow the market closely and speed up turnover, ensuring contracted sales to realize double digit growth. In terms of land investment, the group will maintain a proactive attitude. The group's attributable new land investment budget in 2021 is RMB 165,000,000,000, a year on year growth of 25.2%. Facing new opportunities and new challenge, the group will insist on focusing on the long term, growing through openness to achieve another new year of great creating more value for shareholders. Thank you. Thank you, Mr. Guo, for the presentation. We will now proceed to Q and A. Thank you for your support. There are many online questions. May I remind you that you can also ask questions over the phone or on the website. Now let's take the first question. Thank you. First question, CICC Eric Zhang. Please go ahead. Thank you. Greetings. I am from CICC. Eric, congratulations on your profit and your high quality stable growth. I have two questions. First, concerning the 14th 5 year plan target, Now it seems that for the coming 3 to 5 years, some very active positive guidance have Been given by a number of companies. So during the 14, 5 year plan, concerning your plan and growth targets, do you have any Details for us, quantifiable details. In the past few years, your growth Was not compromised by an increase in leveraging. It is a hard growth. And then at the end of 2020, looking at your financial position, In the future, how are you going to use this financial advantage? Your net gearing is only 30 odd. Your Financing cost is only 3.8%, so I think you have the best financials in the industry. And last year, interest bearing debt increased 13%. So in the coming few years, I think you will be at the highest green line. So are you going to use are you going to be at 15% to support Business Growth, those are my questions. Thank you. Thank you, Eric, for your questions. Let me first talk about the 14th 5 year plan. Analysts, I think you are quite concerned about our 13th 5 year plan. Last year Well just now Mr. Kuo presented our results. That's the final year of our 13th 5 year plan. And during the pandemic, our company Has overcome the impact of the pandemic and other difficulties and challenge. No matter whether you look at sales or revenue and net profit And then profit margin, I think we have all achieved our 13th 5 year plan targets. Then concerning the 14 5 year plan, our overall point is on one hand we strive for Development speed at the same time development quality. So all along, we have been saying that we have To be both, fast and well in our development. As regards quantifiable targets, I can tell you, in the coming 5 years, first of all, our sales Must be at at least double digit growth per annum. Well, that is quite concrete, quite specific. And then for commercial revenue, you may realize that originally we have a target. In 2023, our rental income should reach HKD10 1,000,000,000. That target will not change. And in fact, we are moving towards that as well. We are moving forward. Besides, We have a 2025 revenue target for commercial. So every year, the growth It's going to be a high double digit growth. That's the first question. Second question regarding the financials. Mr. Guo, can you take the question? Thank you, Eric, for your question. All along, our company has maintained a Sound financial strategy. It is not only an understanding of our business and finances. Actually, Over the past years of our history of developments, our operation and development, financing scale Actually support and complement each other. So in other words, we need to look at our own development and do a match. And for business development, it needs to be able to support financing development. So our past CAGR is 20.4% or 1.5 times. We did not do it by an increase in leveraging or high interest debts. We rely on precise Investment, refined management, very good sales and production and services to realize the goal. So This is a virtuous cycle. That's the first point. Besides for our company, we have been disciplined. Before the introduction of 3 red lines, well, we have not trespassed any of the red lines and we have not All fairly utilized the leveraging. Well, there is not more than 13% increase in interest bearing liabilities, And we did not use the allowed 15%. So that is precise investment and it also shows our discipline. So we do not use 15% for the sake of using it and we do not invest for the sake of investing. So in the future, concerning high quality of development, Well, I think there may be the accumulation of assets. And in the process, we need The whole team to work together to evaluate and to Rectify our own business and financing needs so that our finance and operation can be integrated, So it can help the long term and future development of our 14 5 year plan. Thank you, Eric, for the question. Thank you for the answers. Next question, please. Thank you. Next question, JPMorgan Ryan Lee, Please. I am Ryan of JPMorgan. I have two questions. First, Just now, you talked about some quantifiable targets or indicators in the 14th 5 year plan. If we go back to 13th 5 year plan, sales was doubled. And then if you look at revalued, Net profit increased from 20.15, 20,000,000,000 yen net profit in 20.20, 38,000,000,000 yen of net profit. So I have done a calculation. In the 13th 5 year period, the growth was 11%. So in the 13, 5 year plan, sales increased 20%, profit 11%. So that is the result. Just now the management said that the annual So this annual growth of sales should be double digit. But if we look at 2015 to 2020, if we look at the trend, net profit May only have a single digit growth in the 14th 5 year plan. Regarding profit, what do how do you see it? In 2020, GP margin was 30%, net profit margin 20%. If we look at the presale gross profit margin, can that be maintained? That's my first question. 2nd, Regarding your development, every year, you have a target On the amount in 2021, 25%, last year during the results presentation, I asked Mr. Yan This question. So should the targets be matched with Sales, and the answer is yes, more or less. In 2021, concerning the land acquisition, 25% growth, is it going to correspond sales growth on the resources level? Comparing 2021 2020, how big will be the change? You have quite a big amount of cash on hand. It seems that you are going to make some moves. You may be making some large acquisitions. So from these two aspects, what are your main strategies? Thank you. Thank you, Ryan. 14th 5 year plan. You may see recently Various companies' annual report and no matter whether you look at gross profit, net profit, net profit margin, They all came down. This is a trend in the industry. For our company, we are very confident that among our peers, we will be able to maintain the best level. For example, net profit margin or gross margin, We hope to achieve the best level. As regards our total profit, Will it correspond to growth in sales? Well, definitely, This will have to do with the industry situation and our own management standard. During 14th 5 year plan, we said there should be double digit growth. But then during the 13th 5 year period, you can see that There's a 100% growth, but will that happen again in the 14, 5 year plan? Well, we do have our target and expectation. We will work hard. Besides, we have enough confidence to achieve an annual double digit growth. Then regarding land acquisition growth, I would ask Mr. Zhang to answer you. Well, let me thank you for this question. Regarding land acquisition, you can see In the past few years, we have maintained stable, fast growth. Last year, our attributable Land was 130 odd 1000000000, so it's a big growth. And in Shanghai, Tian Guo East Road and also Beijing, a city, Our investment was 20 odd percent, JPY 140 odd 1000000000, which is fast growth. This year, The target is 165,000,000,000, so 25% growth. We are confident To reach this target, we have been active in investments. So We have the financial resources and operation quality, and we do have the need for such operations Concerning investment growth and sales growth and the relationship between the 2, actually the 2 do not match perfectly. Now for 688, our business structure focuses more on Tier 1 and Tier 2 cities. Last year, in Tier 1 cities, sales accounted for 32%. In Tier 1 cities, last year attributable investment was around 33%, so more or less a match. In Tier 1 cities, The presales standard, except Beijing, is higher. But for projects that we invest in, The inventory will be released gradually. For 688, in order for us to have Healthy high quality development in the future, this can give some support. In recent years, given the national We have the capability to work in big projects in main locations in ShanxiTown Redevelopment. So recently in Shanghai, Beijing, Shenzhen, Guangzhou, our investment is big. Last year, We continue to invest in Hong Kong. So for Thank you for the sharing. Next question, please. Thank you. DBS, Daniel Wong, please go ahead. Management, greetings. Thank you for giving me the chance to ask questions. I have two questions. First, growth rates. My question is, in 2020, there was impact from the pandemic. You were still able to achieve 12.5% growth in 2020. The land acquisition Rhythm was quite good in 2021 without pandemic impact. And also in 2021, Apart from double digit guidance on growth, can you elaborate? Can you say that 2021 growth will be better than in 2020? This is a follow-up To other analysts' questions. Mr. Yan is not here today. As far as we can remember, it seems that there was no occasion in which Mr. Yan did not Does this mean that there is some kind of Delegation of power in your corporate governance and would there be change in your incentive management that you would like to Share with the market. If possible, I have a question on share buyback as well. This year, So you had done a few share buyback and what is your strategy for that? What are the principles behind your actions? Thank you. Thank you for your questions. Now concerning share buyback, later on, I will ask our CFO in Hong Kong to answer your question. I will answer your first two questions first. First question. Mr. Yan is still the Chairman of our Board. There is no change to that. So concerning our business results and also now we are communicating with investors. So concerning our objectives, our answers to investors, Well, all these are worked out together with Mr. Yan and other colleagues. So I can tell you that There is no change to Mr. Yan being the Chairman of 688. He is not here because of other business engagements. As Chairman of the Board And also concerning corporate governance and his discharge of responsibilities, there is no change. Then your first question, 2021 growth rate, will that be better than 2020? Now in 2020, we achieved growth of 12.5%. This is not easy. Under the challenge of the pandemic, our company reacted fast. At that time, We have to snatch workers, materials, equipment and time. We have to fight for all those. And for our 100,000 workers within half a month, they are all Back to their positions. And last year in Wuhan, Beijing and some other cities, because of the pandemic Restrictions, supply of products It was delayed for understandable reasons. However, we have adjusted Other projects, timetable and supply, so we have almost 1 third and or 100 1,000,000,000 of products being delivered with or earlier than scheduled. So in other words, our supply did not decrease. On the contrary, it increased. According to original schedule, there was an increase really. And some profit was realized earlier. So this ensures that We could achieve growth in sales and profit. In 2021, Looking at the Q1, our company's sales and also project operation are all satisfactory, including commercial operation. So everything is In accordance with our expectation, however, this year, There are still some uncertainties. So for the market, We see very bright side. At the same time, we still need to make preparation and be prepared for the worst. So that's why we have given the guidance of a double digit growth. We are trying to be realistic. How much can we achieve? Well, for double digit growth, well, that is double digit, and we will definitely Achieved it. Thank you. Next question? I will defer to Mr. Lu. Thank you. For share buyback, it is a commonly used capital management method. I'm sure many of you are experts in the capital market, so I will not go through the details. In the past year, Well, there was trade war and finance war, and so the situation was volatile. Starting June last year, We did share buyback. It's the 1st share buyback since 2005. In June till the end of the year, We bought back 11,380,000 of shares and we spent 189,000,000. So by this share buyback, We would like to send a message to the market and we wanted to express to investors that Our stock price is much lower than our own value. In the past half a year, our PE It's no more than 5 times PB, 0.5 only. When there is uncertainty in the market, Our operating efficiency all along has been very good. Besides, there is stable growth. So in the future, We will continue to monitor closely our stock price trend and we will see Whether our stock price is in line with market trend and the trend of other peers and When necessary, we will consider doing share buyback to protect and enhance shareholders' value. Thank you. Thank you, management. Next question please. Thank you. I am Guo Zheng from Guangfa Securities. Thank you for the stable business growth. And this year, We can see that investors have more and more recognition for COLI. Just now, many questions were asked about the future. I have a question about the past. Since 2017, there are much change in Internally and externally for COLI, from 2017 to 2020, well, what is the biggest change Within COLI and what are some problems in future competition, what are some weak points in your company, in achieving high growth, my second question is, in the past few years, How what is the percentage of land acquired through application bidding and auction? Are you going to rely more on that? Or are you going to rely other rely on other channels to get land with a higher performance over price ratio? Thank you. For the question about auction application and bidding, I will ask Mr. Jiang to take it. Let me answer your first question. In the past few years, you wanted me to talk about the Change in COLI and also our weak points. We have a history of 42 years. In the past 42 years of history, we have deep cultural heritage and also heritage of management culture. So if you look at our own corporate culture, well, I think you can see Some very outstanding characteristics. And as usual, over the past 40 odd years, We have accumulated rich heritage and tradition. For example, stability Being steady, well the 3 red lines were introduced last year. However, since 1998, We have been exercising discipline not to trespass these three red lines. That's our culture. And there are a lot of things that have not changed. We have Mr. Yan as Chairman and he has worked in COLI for a long time. He has Your working experience of 20 odd years in this company, so I think this Chairman definitely is very, very familiar with the culture of COLI. In the past 5 years, In accordance with the new situation and new operating conditions and the changes, while everybody is talking about The point that the real estate market has now moved on to the second half period of the game. And in face of external challenge, We need to maintain our operating competitive advantage and it is inevitable that we need to Change. And over the years, we have been changing. We have been self criticizing Ourselves and we have found the most appropriate path for us. In the past 5 years, In the 13 5 year plan period, our sales growth and operating efficiency In the industry and also among analysts Have changed? Do we have weaknesses? Of course, we are Constantly identifying our weaknesses, as such as now, we have a lot of cash on hand And there are also issues about investment in our company's history. There have been moments in which the gearing ratio was very, very low. Then during that time, investors will be concerned about our Investment Efficiency. So concerning specific weaknesses In our operations, of course, we have been thinking of them. We have been reflecting upon ourselves. We have been Improving and just now you talked you asked about the percentage of land from application auction and bidding and it is quite Hi, the ratio is quite high. Last year, we set up a new structure to Explore some industry segment markets and all these are being strengthened. All these are to face up to all the uncertain challenge. We want to deliver the best results to pay back to shareholders and investors. Now I will defer to Mr. Zhang to take your second question. Let me answer your question on method of investment. At the beginning of starting the property development industry, We have been making investments in other methods like M and A and also residential business and so on. And in since 2019, we attached more importance to non public project acquisition. So on the group level, we have established a development and Enterprise Collaboration Division, hoping to expand our ecosystem. And with our financial management, refined management, profitability, synergy with other Companies, we want to do a good job in this non public segment. And as in the case of public markets, We use the same investment criteria to consider projects. For example, profit margin, IRR, Turnover or conversion cycle, cash flow, cash return and so on, all these Our criteria that we adopt, they are the same. In 2020, in the non public market, we completed investment of Around 25% of the total in the future in the non public market, we will Do more work to accomplish our Blue Ocean strategy. So in main in big cities, we will work on big projects with big land For Shanghai, Xianhua East Road and Wuhan, we have built some big complexes. So on these, we have achieved quite big breakthrough in Taiyuan. We are also cooperating with a big resource owner. Early this year in Suzhou, There is another non public project with many stories and the amount of money will exceed JPY 10,000,000,000 in Changsha. We may be able to get a project with a total scale of 2,000,000 square meters. So all these is because over the past years, we have accumulated a lot of experience and capability. So in getting good projects no matter in the public or non public markets, We will definitely work in all these areas to make sure that we will have healthy, stable and high quality development. Thank you for the answers. Because of time, we will take the last question now. Thank you. Last question, Karl of Merrill, please. Good afternoon. I'm Karl from Merrill. Two questions. First, last year, dividend payout was 30%, which is at your guidance. Do you have any new goal for the coming few years? Second question, this year, for saleable resources, How much increase would that be comparing from last year? Thank you. Thank you, Carl. First question, I will ask our CFO, Mr. Lu in Hong Kong to answer. Okay. Thank you. In the past few years, all along, We have been raising our dividend payout. In 2020, dividend payout Exceeded 30%. It's at 30.2% for the whole year. Dividend Was up 15.7 percent at HK118 per share. In the future, we will not rule out the possibility that dividend payout May go up, but now we do not have a definite goal. We don't have a number in mind, but we are confident that every year according to our actual situation can raise dividend payout, So we will be able to create more value for shareholders. Let me share with you, in 2016 to 2020, Accumulated dividend to all shareholders, HKD 51,161,000,000. Now of course, we have to look at our operations And we do have a vision to grow our dividend. When profits and scale grow and also with growth in EPS, we hope that every year Dividend total dividends you had to shareholders can increase year after year. Thank you. Okay. 2nd question, Saleable resources for this year. I will ask our Executive President, Mr. Zhang, to answer. Overall speaking, this year, our saleable resources We'll reach a high point in history. Mr. Zhang, please. Yes. Thank you. For the whole year, estimated salable resources, JPY 770,000,000,000 yen JPY 370,000,000,000 will be new resources For first half and second half, JPY 279,000,000,000,000, so altogether, the Total will be 770,000,000,000 salable resources. This does not include the newly acquired land this year. So I think comparing with the same period of last year, there is an increase of 15%. Thank you. Thank you, management. Thank you for joining The 2020 results presentation of China Overseas Land and Investment. Thank you, analysts and investors, for your attention and support all along. In subsequent results roadshow, we will have further communication with you. So we will conclude our presentation here. Thank you.