Dear analysts, dear friends, and dear investors, good afternoon. Welcome to China Overseas Land & Investment Limited 2016 annual results announcement. Let me introduce the management to you, Mr. Chairman, Xiao Xiao. CEO, Mr. Yan Jianguo. Vice President and Chief Architect, Mr. Luo Liang. As well as Mr. Nip Yuen Leng, our CFO. Mr. Xiao will report to you our business performance in 2016. We'll open the floor for questions. Mr. Xiao, please. Thank you very much for your coming. A lot of people here. A big crowd. I believe that you must be here to see our new management. In a minute, I will ask our new staff, our new member, to talk to you. Dear friends from investment, dear investors, thank you very much for your coming to this results announcement, and thank you for joining for our online discussion.
I would like to share with you our business performance in 2016. Last year, our total contract sales reached HKD 211 billion, up by 16.6%. Net profit reached HKD 37 billion, up by 6.9%. This is the net profit attributable to our shareholders. After stripping out the impact from CITIC, net profit attributable to the shareholders went up from HKD 33.3 billion to HKD 38 billion, up by 14.1%. The shareholders' equity reached HKD 220 billion, up by 6.1%. Via our CITIC acquisition and auction, total land bank reached 56.8 million sq m. Along with the transferring asset to COGO, Currently, our total land bank is 567 million sq m, up by 37%. For the tier 3 cities, some projects were already transferred to COGO. The gross margin was 27.8%, up by 0.6% than that of 2015. Taking part of CITIC, the GPM reached 29.2%.
Based on the calculation for the equity of our shareholders, the overall return is 17.1%. Putting aside the revaluation of our property, the overall returns was 14.5%. The SG&A ratio went up a little, but still below 4%, which is a very low level. The board proposed a final dividend payout ratio of HKD 0.42. Plus interim dividend, total dividend reached a total of HKD 0.77, up by 26.2%. It is 26.9% of the payout ratio so as to share the value with the shareholders. By the end of FY 2016, we are holding the cash position of HKD 157.2 in the cash. The long-term debt maturing in more than 1 year accounted for 76.8% of the total debt. The group's debt structure and the repayment cycle are both healthy. Compared to that of end of 2014, the U.S. debt decreased to 27.8%. Other currencies other than RMB reduced from 82% to 56.5%.
We enhanced the capital inflow to Hong Kong. Our total remittance was HKD 14.5 billion. As for the USD debt of $750 million, it was already repaid. We still maintain the highest level of rating, we maintain very smooth financing channels. At the end of last year, our total land reserves was 5.4 million sq m. In tier 1 cities, is 1.05 million sq m, up by 5%. Last year, through the acquisition of a CITIC project, we acquired 31.55 million sq m, accounting for 76% of our total land reserves. Comparing the land acquisition from the public auction, the acquisition brings a more cost-effective land acquisition. Last year, in the public land market, we see a very heated situation, we bought altogether 18 pieces of land, accounting for 9.72 million sq m. Let's look at the sales.
In 2016, our sales increased by 16.6%, and the unit selling price also increased accordingly. The total contracted sales was HKD 16.154 thousand per square meter, up by 12.7%, based on HKD 14.333 thousand per square meter in 2015. Our total payment collection also increased by 28, reaching HKD 177.2 billion. We maintained a completion of GFA 13.35 million sq m, in which 11.67 million sq m are from our own projects. 80% of them already sold out. Because the sales went by very successfully, our inventory was maintained at 2.86 million sq m, which is a very healthy level. At the end of the year, the sold and not settled projects is HKD 10.46 billion. It's HKD 104.6 billion, and it was the highest level in the past years.
70% of them will be ready for sales, they will be a big major contribution to our core profit. As for our Investment Properties, projects in Foshan, Changsha, Huangpi, Xi'an, and so forth, are already open for business. The total revenue was HKD 2.14 billion, up by 6.2%. Hotels contribute HKD 420 million, up by 1.5%. By the book value, there was a 2.5% increase, reaching HKD 67.1 billion. At the end of the year, we are holding 2.5 million sq m of IPs, and under construction or to be constructed GFA is 4.4 million sq m, in which 1.2 million sq m will be completed by the end of 2015. In this chart, you can see the 80%-95% of these IPs will be ready for lease. Let's look at the market outlook.
There are a lot of black swan incidents in the market, a lot of uncertainties. While they influence the economy, they also brought along a lot of fluctuations in the capital market. Because of the political uncertainties, there are a lot of incidents in the markets, they have caused a great difficulty in our financing channels. We will continue to keep a close eyes on them. China's market, our economy, we have a full confidence on the economy. We had the two conferences not long ago, with the central government's targets plus our own prudent strategies, we will witness great opportunities in the market and maintain medium to high speed of growth. On the 15th of March, the Fed announced the first round of interest hike, the HKMA also announced the interest hike, we received a very smooth feedback from the market.
For EU and Japan, other economic entities, the QE was continued, therefore, there are more uncertainties in the market. Along with the central government tightening the liquidity, according to our observation, the financing cost and the debt cost will also go up. This is about the financing market in China. As for the property market, no matter the firsthand or secondhand or the land market, overall, we see the tightening in the market. As for the overheated market, it will be very helpful to curb the heatedness so that we can build up very stable and very well-ordered market situation. Meanwhile, we can see the tiering going down. For the auto-renewal of land utilization right, it's getting more and more clear. For the stability and the certainty, we hold full confidence on them.
As for the residential property market, along with the ongoing urbanization as well as the implementation of our government's policies, they already built up across several cities. The population is continuing to pour into cities. The demands will be further released. We believe that very likely, the residential market will stand for a 1 billion sq m of size. After 10 years of growth, the property market is slowing down in growth. We can see the divisions between the cities. In the tier 1 cities, the increase of newly built properties also slowed down. The tier 2 cities, they become more and more important. Therefore, a lot of people want to move to better houses for improvement. Therefore, we can see opportunities and the challenges through better management and better efficiency for operations.
We can consolidate more resources so that we can improve our market share. As for the IPs, there are limited premium quality commercial properties, therefore major risk from the overdevelopment of commercial properties in tier 3, tier 4 cities. We will continue with the IP projects in China. Let's look at our operations targets for 2017. I would like to invite Mr. Yan to share with you our operations targets for this year. Dear friends, dear investors, good afternoon. Very happy to meet you all. I would like to take this opportunity to thank you, first of all, for the support that you have been giving to China Overseas Land, as well as to me myself. I would like to continue with the report after Mr. Xiao, to share with you our operations targets.
In 2017, based on our judgment on the macroeconomy and the industrial changes, we will stick to the principle of achieving steady progress and stick to our brand building. We also keep a balance between the business size and the returns to our shareholders, and a balance between opportunities and challenges. In the first two years, our GFA, our sales revenue and sales area increased by 44%, 42%, and 28%. We increased 19 pieces of land in some cities, it was altogether 19. The developable area was 29 million sq m. Our sales target for this year is HKD 210 billion, basically the same level as last year. In the mid-year, we will review this target, and if necessary, we will adjust it. For the sellable resources increased by 12%, new products accounts for 23%, the old products are 24%, and the rest are 53%.
As for the supply, basically it will be a half-half situation. In 2013, our completion area will be 113 million sq m, at the same level last year. In terms of our CapEx, as well as the construction area, there will be a big increase. The new construction area, we are increased from 7.56 million in 2016 to 19.1 million sq m, with an increase of 151%. The GFA also increased, 30 million sq m, increased by 37%. As for CapEx, it will be 160 billion square meters with a big increase as well. As for the land acquisition, we are also increased to HKD 165 billion. The new projects will also increase dramatically by 126%. The newly acquired land will go up to 160 million sq m.
In 2016, if you look at all the indicators, the macroeconomy will be very complex and the competition in the market will be very fierce. We have been very cautious in preparing these budgets. For the management, we will stick to our principle and work hard to progress. We hope that we can build our size bigger. Now, I'd like to hand the podium to Mr. Xiao. The last part about our future strategy. You can see here, in this pie chart, you can see our operations strategy. If needed, we'll adjust the strategy, but our overall strategy does not change. A little bit elaboration about the strategy. We will continue to stick to the active and prudent strategy. In terms of the overall risk management, we will enhance our measures.
While we pursue for the profit volume as well as the continuous growth of returns for our shareholders. We hope that by 2020, our overall strength, be it hard or soft, we hope to be one of the top players. We hope that we can realize a 30% of GPM, 15% of returns to our shareholders, and a near 30% of dividend payout ratio. This is our target. This year or in the near future, we will focus ourselves on the following areas. First of all, we will actively and continuously participate auctions in land market for tendering. Our thinking is that with more participation, we will be very cautious in pricing. We will continue to diversify our channels of land acquisition through, in addition to the acquisition and renovation in the shelter area in cities, we will conduct more cooperative programs.
For example, with other SOEs, which have already got land reserves. This will be a further diversification of our land reserve. Number 2, we will further improve our capability in IP investments, as well as in operations efficiency. We will simplify the operations structure so that we can improve the design, construction, marketing, as well as the property management, so that we can deliver better services and realize the efficiency and the value of our IP projects. Number 3, in terms of the whole supply chain, we will work hard to enhance each of these supply chains in order to deliver better and improve the satisfaction from our customers. Based on the development phase, we will review our current operations structure, including the IPs as well as other areas, in order to adapt to the changing market and more competitive market and improve our efficiency.
Number 5, in terms of human resources, we will work more on it. We will implement an optimized compensation system. Mainly, we will make more efforts to increase our fixed salary. In the past, the fixed salary was only too small in proportion, which doesn't fit for the market. It doesn't help us to attract and retain the talents. From these five areas, we will focus more, and these will be the priorities for our FY 2017 work. With that, I would like to conclude our report. Now, I would like to open the floor for questions. Thank you. Thank you very much, Ms. Xiao, Mr. Yan. Now the floor is open for questions. Please raise a hand if you have a question. This gentleman, please. Jeffrey from Deutsche Bank.
The first one, can you please share with us, in the new environment, what is the strategy? Is it land acquisition and selling properties? Looking to the future, because in the past 4 months, you acquired a lot of land. Looking to the future, how do you balance them, the gross margin, the turnover, as well as the size growth? Because when I look back, you actually prioritize the efficiency very much. What about the size? The second question, I just want to know a figure. This year, you have the sold that are not settled resources, and the selling price was over HKD 11,000. Can you please share with us the gross margin and how do you think about this? What is the breakdown of this HKD 11,000? The first question is about the efficiency versus size or scale. Actually, we have been all the same. We haven't changed.
We pursue the growth in both profit as well as the returns to our shareholders. Without any scale of a business, you can't really do it. Therefore, in the land market, we have been very progressive, very aggressive in terms of acquisition, in terms of options in the public market. This year, according to our land plan, as I reported before, this is about the RMB 111 billion for land acquisition. Basically, this is our plan. We pursue both growth in profit as well as the returns to the shareholders. In order to achieve this purpose, we have to build up the scale of economy. Therefore, in the future, our size will be growing. This is our target. As we reported before 2020, we will strive to hit this target. Of course, we have prepared a series of plans for that.
Your second question is about the unit price of sold but not yet settled projects. There are two reasons accounting for this. Number one, in 2016, the overall property market in China saw a very good situation in sales. The unit price was going up last year. This is the one hand. On the other hand, there were sales in Hong Kong as well. The selling price in Hong Kong was higher than that of Mainland China, yet this is not the major reason. The major reason is the first one. The overall sales was better. The unit price was going up all year long last year. That's why you can see the unit price, the selling price was higher.
Thank you.
Thank you very much. Next question, please. I have three questions for you. Good afternoon, management. Just now you talk about this future strategy. You also mentioned slide 24 in your presentation. You hope that in the future, in major markets, you want to be one of the top three players. Apparently, there won't be any growth in sales. How can you become a top three player in the major cities, major markets in China? In slide 22, in the guidance, we saw a big increase of new projects. I just feel that these figures versus the HKD 220 billion sales, it seems that it doesn't really match. I just want to know whether these targets are too conservative. Based on this, how can you realize these HKD 400 billion sales by 2020? This is the first question.
The second question, your gross margin, you hope to maintain it over 30%. Based on our analysis and the land you acquired, based on our calculation, the gross margin was below 25%. Can you please share with us why? From December to now, what is your prospect? Can you really do 30% of gross margin? The third question is about your diversification growth. In the past, China Overseas have been focused on the residential property, particularly in Mainland China. Recently, there were a lot of reports around media. I just want to know, have you changed your strategy? Is that in the future, we will see more investment in commercial properties or overseas properties? Thank you. Your first question, the top three target, it doesn't fit for our sales. Actually, it is our target.
Actually, we have thought about it for quite some time, how to decide our target. It's true that we have operations in over 30 cities, within these four years, it's impossible for us to be a top three players in all these cities. Perhaps it really depends on how you understand our wording. Anyway, it is our target. It is always our target. Without this target, you don't know where to start and how to do. This is the best answer I can give to you. Do you find it interesting? Do you find it funny? I'm a very honest man, I try to answer your question honestly. As for the new projects, there's a big increase, it seems that it doesn't fit for the HKD 220 billion. Well, actually, this is also a result of our careful consideration.
We did calculations, actually, you have to understand it this way. For the new construction projects, it's 19 million square meters. How many area can be sold? How many can bring effective sales? It takes some time. You can see this year our sales volume, our sales revenue won't increase dramatically this year because of this reason. Secondly, just as usual, we usually propose a very conservative target at the beginning of a year, in the middle of the year, when we review our strategy. This is for our normal practice. This HKD 220 billion, it has a basis. You have to make it very clear, this HKD 210 billion is not kidding. It's a result of our calculation. It's based on the calculation of all our projects. As for gross margin, our target is 30%.
As for the land reserves, you may think that the gross margin won't be that high, but you have to consider them all as a whole, because there are still a lot of uncertainties. You cannot calculate the gross margin one per land. Our land reserve is because it is a very big figure here. Some land, we bought it at a low price, some at a high price. Last year, through the acquisition, we've got more land, 76% of them are from acquisition. This is the total land bank. The gross margin of this is usually higher. Also, we have a historical data, and we analyzed the market and came to this conclusion. That's why we put forward 30% of our gross margin. It's not that we must hit it, if we can't hit it, what do I do?
This is the way you do the business, right? This is only an anticipation. There are evidence in the past that we can follow to guide our future. As for the real gross margin in the future, it really depends. We've got land reserve, and it's not a one-on-one relationship. The third question about IPs and the overseas projects. For the IPs, we will continue to develop the commercial businesses from the designing, construction, so on and so forth. We already got some IP projects. We always think that in the core cities, there's still value for the IP investments, even though the returns are not high today. It really depends on how you see this matter. Because of the price is low, that's why there's potential. There's still great potential in the market, including we ourselves.
Actually, in the past, our performance was not fully satisfactory. From this year on, our overall IP will be reviewed thoroughly, and our target is to improve the operations efficiency, because there's still great potential. As for the overseas, our strategy doesn't change either. We are seek for the M&A businesses and M&A opportunities because they fit for our overall condition in the company, and this is also what we are really good at. In this way, we will be able to deliver better returns to our shareholders. Next question, please. Thank you, Manesh. Eric from CSCC. Just now, Mr. Xiao shared with us about the targets. Actually, what we concern a lot is about the target as well. Some are strategic targets, some are tactical targets. My questions on the tactical targets, the small ones. My first question is about the profitability.
In the past, you have been the leader in the market because of your better profitability and the bigger size of scale of economy. Your ROE, your net profit, both were leading in the market. In terms of your scale of business, you have unique understanding. In terms of a profitability indicator, for example, the net margin, actually, we already seen that in 2016, there was a slight drop. Of course, it has a lot to do with the acquisitions. Technically, I just want to know whether you have decided for this year and the next year, whether we will see a recovery of this, particularly for the City acquisition. City actually dragged a lot of the operations performance. Do you anticipate when there will be a recovery? Do you have any tactical plans? This is the first question.
The second question is about your gear ratio versus land acquisition. Currently, your gear ratio is very low. I just want to know, can we anticipate that in the gear ratio, in the debt level, you will be a little bit more aggressive so that you can realize better land acquisition? The third question is about the financing cost. Financing cost, we see that it is 4.76%. There is a slight increase than before. Just want to know in the future, any guide on this, any trend for this? Thank you. Thank you. I will take part of your questions, and Horace will take the rest, because some of the questions are very difficult and perhaps I cannot answer them very directly. In my understanding, your first question is about the profit increase. In the past, our profit enjoyed a two-digit growth, and above the 20% of growth.
This year, this figure was a single-digit growth. As I said before, mainly it was because of the consolidation of our financial statements. If I put aside this, our growth should be 14.1%. This is the one explanation. Our target, our profitability has keep improving, and our profit has to go up continuously. As for how much? In our understanding, it should be because our total size is about HKD 40 billion. We operate in such environment, and we always ask for 20% of our profit growth. Too high, of course, it won't be possible. I can quote from what the premier said, that we weren't courageous enough, if adult can do more. If it is a child, then the child can do less, but he already tries his best.
Since now our total size is about HKD 40 billion, we will seek for growth. We have our track record. Our scale will continue to go up. Our gross margin will maintain at 30%. You can see the total profit will definitely go up. As for gearing and land bank, last year, December, it was low, and now it is 17% already. Our guideline is no more than 40%. This has been the principle. This has been the percentage we have been sticking to all these years. Of course, at the appropriate time or continuously, we will continue to participate in the market in land acquisition. No matter how the price changes, high or low, we will participate. More participation and more cautious in bidding a price. This is our philosophy. We are very active in land acquisition. The gear ratio will get high.
You can see it as a consequence. As for the financing cost, Horace will take your question. I think Mr. Xiao answered to your other parts of the questions. For financing cost, it is true that we looked back our historical records, we also list all the financial costs before. We also see an influence. I don't think you asked this question, if you don't ask, then we don't answer. If you want to study this question about this consolidation of our financial markets, what kind of impact, of course, you can talk to me individually. The principle is very simple. We and CITIC, we are both SOEs. We all under SASAC. That is why we followed the accounting rules and consolidate our assets. What we acquired, no matter what is the price we paid, we have to consolidate the assets into our financial statement.
As for each item, including the balance sheet and the P&L, we have to redo all these financial statements. So that's why this is a big impact. But, as for the financing cost, there was an increase. What I can tell you is that mainly for China Overseas or the US dollar currency and RMB currency, our interest rate is very low, and also they are fixed. So the average financing cost was 4.7%, and it has lot to do with the acquisition from CITIC, because this acquisition, both in assets as well as borrowing, is about HKD 70 billion of bank loans. It was HKD 70 billion of loans. Some interest rates were nice and quite similar to ours, yet there are some others that interest rates were too high, too expensive debts. So we have disposed of some of it.
In China, we arranged HKD 28 billion of bank loans to refinancing. It is also true that there is still a part of our debt, about HKD 10 billion. It is still very expensive loans, and we have to continue disposing them. Personally, I estimate, on the one hand, the interest rate will continue to grow a little bit in the market because part of it is fixed rate, so comparatively speaking, it will be a little bit lower than the other loans. On the other hand, for those higher and the more expensive ones, products or trust, we hope that we can dispose them quickly. In this way, the interest rate will be kept lower. Generally speaking, in 2017, our financing cost will basically be at a stable level, and there won't be a dramatic increase. This is my estimation. Thank you. Next question, please. Good afternoon, management. Couple of questions for you.
For this 20%, you already gave up, right? 30% is just the target, right? The gross margin, 30% is only-- And the 20% of a profit increase, you don't have it, right? As a target? Am I correct? 20% is gone for a long time. You are here every year. But in the past. As a maximum, sir. Anyway, it is gone. Okay, it is gone. Yes, the land bank. The slide 40. The land bank. Why is there 49 sq m of available area? Even if it is transferred to COGO, in the second half of last year, you acquired about 9 million sq m. For this 49 million sq m, this morning, I just looked it up. This figure is different from my memory. It is about the 10 million sq m loss. It is gone.
Just want to know whether it is because of the consolidation of a financial report or any other planning for it. The second question, about the city projects. Now you acquired a city. What about the management situation? Recently, I noticed that in Chengdu, in the Shuangliu, acquired some land. It is RMB 8,000-RMB 9,000 per sq m. I remember for city, in Wujiang or Shuangliu in Chengdu, they have 3 million sq m of land, about RMB 1,200 per sq m. If you still keep it, why do you buy such expensive land? RMB 8,000-RMB 9,000 per sq m. So I just want to know the update of the acquisition. Let me take your questions one by one. The first one about the target. Our saying now is actually the same, 20%. Just as Harry said.
I also said, under such a business scale, under such a market situation, if we stick to this 20% or the so-called a concrete commitment or promise, I don't think it is a responsible way. It is not fair. Particularly considering the market situation, you still ask for 20%. 30% of our gross margin growth, we already explained a couple of times. We can anticipate it in the near future. The city projects, how to acquire land? There are two topics, land acquisition and city projects. You have already seen that last year, 76% of the land reserves is from the city. In 2017, they will gradually bring in new projects.
If I give you a more straightforward figure, according to our estimation and calculation, in 2017, city projects will contribute 7.3 billion million square meters of sellable resources with the sales revenue will approximately RMB 14 million. The profit, from all these projects, the gross margin fits for the margin level of ours or even higher than ours. Some projects, they have higher gross margin. This is about city projects. You also asked about the Chengdu projects. Of course, all these projects are undergoing. About land reserves, for these figures, I wouldn't read them all. If you want to know the figures, you can talk to us individually after the meeting. Because the figures on here, and sometimes because of the different statistical method, last year, from city projects, we brought in some land, and we sold some land.
Actually a lot of changing elements. I wouldn't waste your time by explaining all these figures. Generally speaking, the city projects are very good because they are cheap, and that's why we have a lot of things to do. We can do a lot of things about it. Next question, please. I'm talking about the Chengdu project. Good afternoon. I'm Frank from CCBI. Mr. Hao left all of a sudden, please send my best regards to Mr. Hao if you meet him, because we still care a lot about him. What's her name? CCBI. CCBI, Frank. I'm serious. Frank. Yeah, thank you. Just want to ask you that while I working in CCBI, I work with Mr. Kong, Mr. Xiao, Mr. Kong, Mr. Hao, and now Mr. Xiao.
Just I want to know, in your term, what kind of improvement you will bring to China Overseas? For the pursuit of construction projects will be better because you are Chinese overseas professional constructor. How to balance the cost and the costs? The compensation, can you please elaborate a little bit more? It's a very macro questions. Thank you. Just now, you talked about the quality of our construction projects as well as our compensation. Well, I'd like to take your questions. It is true that just now we said in the near future, we will try our best to improve the quality of our products and our services, as well as our services to the customers. This is exactly needed in the market. In our understanding, if you want to grow the volume quickly, it's not realistic, because the market is changing gradually.
In our understanding, we have to work on the premium. It's the low output, but better premium. It's not fast-moving. In this situation, we will pursue for high level of quality in our products. Of course, the quality is not on the construction or engineering only. It involves in designing as well as service. In China, there are some objective indicators on the service level. This is also something that we will have to do. We'll hire independent third parties to do surveys so that we can know how well we're delivering a service. As for compensation, we have a fixed part, a fixed salary, yet it is too small in the overall package. The proportion is too small, and it doesn't fit for the market situation. The employees, they work, they get paid, and they have to spend.
It is true that our compensation is very attractive among the SOEs. It's still very competitive, we have to make some adjustments. The purpose of adjustments is to motivate our employees and to improve the quality as well as the quantity of our working force. In the future, we will compete on human resources and on talents, and we need them for better competition. We have time for one. Next question, please. Good afternoon, management. Bacon Stanley Chung, two questions for you. Your sales target is HKD 210 billion, and 2020 is HKD 400 billion. Next year, that means it will be something around HKD 300 billion. I just want to know where 2018 and 2019, this year, the new projects, there will be more construction projects this year. From the construction to sales, it takes some time.
I just want to know that in 2018, we will see the apparent increase of sales. This is the first question. The second question, just now you said the saleable resource is about HKD 350 billion, saleable resources up by 12%. Then the sales, does it mean that in your gross margin and the sales level, you would prefer sticking to the 30% of a gross margin instead of achieving a greater sales volume? Can you please share with us a little bit more about Congo? Of course, each year there must be increase. As for the co-investments, I wouldn't elaborate too much about it. This year, if I remember correctly, we have more projects to be constructed this year. Next year, there will be some others. When the projects are finished, the sales will start.
For the sales target for 2018, we believe that there will be a big increase. As for how in Congo, I wouldn't answer this question today. Next question, please. Good afternoon. Ryan from Morgan Stanley. Two questions. Number one, for the profit growth. In your profit this year, we noticed that you consume some assets to get the profit. It's about HKD 10 billion. I just want to know that, is the increase based on this? In 2017, that means that 2017 will give us a very high expectation. The second question, for overseas You spent a lot of energies on consolidation, then you will increase more projects and sellable resources. If you have more construction projects, a lot of sellable resources will be available in the quarter for this year and the next year.
Do you worry that the market will not be as good as today? What about the risk management? The third, last question is about the regional deployment, because in the past, you got a lot of deployments in Northeast China. Now, look at the land acquisitions, South China and Eastern China more. Does it mean that your strategy changed? You focus more on Southern China. Your data is correct. We have a target to pursue the overall growth in profit in 2017. We continue to pursue growth. As for how much, it's hard to say now. Actually, we did our calculations because we know that we can get an increase this year. This is one thing. Secondly, our sales arrangement.
We have more construction projects this year, the sales can only be available at the end of the year or next year, the market may not be as good as now. It's really hard to say. Who knows? You do the business, you're not a predictor. We are such a big developer. We always pursue a long-term strategy, long-term development. This is my understanding. It's impossible for us to do something aggressively for this year, for a specific year, then you change your strategy after some time. This is not the thing we do. We are a large-sized developer. We have a long history. Our business model is already there. It's already established. Just as we said, sustainability. No matter what kind of a situation it is, we have to sustain our business to grow. Sometimes there are fluctuations in the market.
It's quite normal, even within the company, it's also normal. After the fluctuations, you have to look back your strategy, whether you're still following your strategy, your financial strength, your people, whether they still keep their shape. This is our focus. It will be easy for us to understand how we grow the business in the future. As for the northern region, it's a very important region for us. This strategy doesn't change. It's the same as other regions. It's only that there are not so many land for sale, we went for auctions, yet we didn't acquire much of it. Our strategy hasn't changed. We will continue to invest there because they have their own characteristics and really fits for our strategy very well. Time. Next question, please. We have Eugene from Cowen. Thank you, management. UBS, Eugene. Two questions.
Number one, this is the HKD 400 billion sales by 2020. Does it mean that you are going to enter more cities, tier 3 cities particularly? Actually, for this question, do you really enter more tier 3 cities? If the tier 3 city is operated by COGO, do you want to have it handled by COGO or somebody else? The second question is that, for this HKD 400 billion target, what about the gearing ratio for this target? Any guideline for it? Because for China Overseas, 50% of their gearing in the past and now is very low. Thank you. Your first question, for the sales increase, we look at it from the following perspective. First of all, the new markets then existing markets. For COGO, China Overseas will continue to operate in tier 1, tier 2 cities. There are so many of them in China.
For a lot of citizens, a lot of the cities we haven't entered yet. We are operating the existing markets first and make it bigger, then we will enter more tier 1 cities. As for gearing ratio, 40%, as we have always been saying. Of course, at the end of last year. 7.5% was very low. As I reported to you earlier, 40% of our gain ratio, we did the calculation and it generated this target. For the interest of time, the last question, please. Good afternoon, management. Wei-Min Cheng for CIMB. About the dividend, your leverage is very low. Other developers, their dividend rates are very high. For China Overseas, are you going to raise your dividend policies? Number 1, about the land acquisition, does it include Hong Kong market? 30% of our dividend. For the investment, this HKD 110 billion, it includes Hong Kong.
Hong Kong is a very small market, there are a lot of uncertainties here. It's really hard for us to say. For the auctions, if we win the auction, it can be a very big project, otherwise it will be 0. Generally speaking, if you look at a company like us, you have to look at long term, if whether we are making progress in the market. In Hong Kong and Macau. I'm not sure whether we can get land in Hong Kong and Macau. We will continue to participate in the land auction. The strategy, the same. More participation, maybe it will come true, our dreams. It's really hard to say, because this is how the market operates. These are our strategy. Thank you very much.