Ladies and gentlemen, those who are watching webcast, good afternoon. I am very happy to meet with you here again. Before I formally announce our results, I would like to give you a brief introduction. As you have already seen on Monday of this week, we announced the transaction on integrating the property business of CITIC Group. In today's presentation, apart from going through our annual results and our operating results, we will also talk about the integration with CITIC Property. I guess you are all concerned about that. We will talk about our future plan and arrangement as well. This slide is not in the PPT. In the past years, because of capital injection and spin-off and some other reorganization moves, the financial structure has been reshaped, there are major changes in some parameters.
Year-on-year or quarter-on-quarter comparisons may not be very meaningful as reference. I would like to stress that no matter what kind of capital operation we are engaged in, our objectives are the same. Our objective is to maximize shareholder value, we are striving for growth and rapid development. At the same time, we attach importance to scale and profitability. We want to maintain stable shareholder equity return. In this way, we want to strengthen ourselves, our company. Before I announce the results, this is the point I would like to stress. If you look at the financial statements, after a few years of reshaping, there are many changes in many numbers. If you ask me about quarter-on-quarter or year-on-year comparison, I may not be able to give the numbers, you are all very professional. I guess you all understand what is it all about.
I still want to make this explanation first. Back to this theme. Annual results of 2015. In 2015, there is more serious market segmentation. The industry is in the process of clearance of inventory, we are adapting to market changes. Our revenue was $148.07 billion, net profit $33.31 billion, up 22.5% year-on-year. The board proposed to pay out final dividend of HKD 0.41 per share. Together with the interim dividend and special dividend, altogether for the whole year, we are paying out HKD 0.92 per share, up 67.8% year-on-year. These numbers are shown on the slide. I will not read them out one by one. You can see our revenue and our profits, the segment breakdown. The slide shows that within the period, our property development records revenue of HKD 143.7 billion, accounting for 97% of total revenue, up 7.2% year-on-year.
Rental income from properties grew 16.6% year-on-year, reaching HKD 1.92 billion. Here, you can see that our shareholders' equity increased 43.3% from last year, reaching HKD 191.6 billion. Net asset value per share was up 18.3% year-on-year to HKD 19.4. For the whole year, average shareholders' return on average capital was 20.5%. We have maintained that above 20% for a long period. Shareholders' value generation ability is leading our counterparts in the industry. In the coming days, I believe more and more property developers will announce their results, you can also see our figures. You can do a comparison. As of the end of December, cash on hand was HKD 102.4 billion. Net gearing ratio came down significantly to 6.8%. Our balance sheet is very healthy. We have adequate financial flexibility. Next, financial and credit.
In the second half of 2015, we successfully issued EUR 1 billion bond and also RMB 8 billion onshore bond. Because of the strong USD, we have opened up new financing channels. We seized the opportunity of a low bond interest rate of EUR and RMB. Besides, at the end of the year, we are the first residential property developer getting A- rating from Fitch. This shows that we are strong in cash generation ability. We have also diversified financing capability and sound business performance. Next slide, financial resources and debt structure. At year-end, cash on hand, RMB accounted for 79.5%, HKD and USD 18.7%. If we add the unused bank credit facilities of HKD 10.6 billion, total financial resources available was HKD 113.1 billion. This is adequate preparation for future business development. Looking at types of liabilities, corporate bonds totaled HKD 66.2 billion, bank loans, HKD 49.26 billion.
Long-term debts over one year term accounted for 93.7%. The debt structure and the debt repayment cycle are on healthy level. Last year, RMB against USD exchange rates came down. There is an accumulated depreciation of about 5%. According to market changes, we have adjusted our financing strategy. We opened up financing channels. There are double channels and multiple currency financing to diversify risk. At the end of the period, our HKD and USD liabilities accounted for 78.3%, falling to 69.7% for medium-term. We are able to complete our interim estimate. At that time, back then, I said that our goal is 70%. At the end of the year, we have already achieved our estimates. Adjustment to the debt structure has seen some effects. Now let me do a business review of 2015. For the whole year 2015, contracted sales was HKD 180.6 billion.
We completed the whole year target, the revised upward whole year target. Cumulative GFA was 12.6 million sq m. At the end of December last year, there is already the order or subscription of HKD 7.4 billion. Contract is yet to be signed. Within the year, we maintained our stringent management of payment collection. If we do not include JV projects, we realize payment collection of over HKD 138.5 billion, which is a high collection rate. Including JV items, altogether there are 74 projects completed. Total completed GFA reached 12.57 million sq m. Here you can see projects completed in the year 2015. As of the end of December, completed and saleable GFA, 86.1% was sold out already. Sell-through ratio or sell-through position is satisfactory. Here, you can see pre-sales and inventory.
In terms of booking of sales for our own projects and JV projects, altogether HKD 154.7 billion was booked at the end of last year. Including JV projects, we still have 4.78 million sq m that had completed pre-sale and waiting for completion and intake of population. Total value was HKD 86.2 billion. For pre-sale, overall selling price was quite good. Now, about land acquisitions. In 2015, in mainland China, in 13 cities, we acquired 17 pieces of land. Newly added development area was 5.96 million sq m. Land cost was 34.5 billion RMB. Here you can see that the average price is higher than usual, but that is mainly because of Beijing. The total volume was small. Average price in Beijing of land cost is 13,000.
If we exclude Beijing, we are able to maintain average cost of land at 3,500 per square meter as in the past. If we add the almost 10 million square meters of land resources from the injection of capital as of the year-end, in 35 million cities in Hong Kong and Macau, we altogether have land reserve of 41.44 million square meters. Here you can see our land bank distribution. I won't read out the information. Here you can see development of investment property. As of the year-end of last year, we reached a new high in terms of properties scale. Including parent company injection projects, we have completed investment properties of up to 1.73 million square meters for the whole year. Rental income rose steadily to HKD 1.92 billion. Now, I guess you have already seen a lot of business resale figures.
I have just done a brief review with you. Now I am going to talk about the acquisition of property portfolio from CITIC Group. On Monday, an announcement was issued. There are details about the transaction and also the structure and consideration. There are some explanations. Now, I would like to briefly do an overview with you. First, about the transaction structure and consideration. The group will acquire CITIC Group property and also the residential property business of CITIC Group. Consideration is RMB 31 billion, we will pay through the issuance of shares and also transfer of assets. The share consideration will be HKD 29.7 billion. We will issue 1.096 billion new shares at HKD 27.13 per share to CITIC. The issue price comparing with the average closing price three months before the announcement, there is a 14% premium.
Besides, we will transfer assets worth RMB 6.15 billion to CITIC as part of the consideration. Because of the shareholding requirement of our parent company, the consideration includes the premium share issue and also the asset part. The target asset portfolio, there is shareholder loan which is not included in the equity yet. In the announcement, you see our debt structure as well. Here you can see our debt structure. The consideration includes the net asset value of the target group and some shareholder loan, and the remaining net debt will be taken over by the group. Apart from the HKD 33.36 billion shareholder loan, there is still bank borrowings and other external debts. If you look at the total assets for the transaction, that is the net asset plus the transferred debt. Well, because I cannot go through with you numbers, you can guess yourselves.
After some time, I can disclose exact figures for you. You are also sophisticated. I'm sure you are able to get a correct guess. Net asset plus transferred debt, we believe that the total consideration is at a reasonable level. That's about our debt and also financial numbers. This transaction is a large scale strategic M&A. The asset portfolio is distributed in 25 cities in China. Total GFA is around 24 million square meters. In 2015, at year-end, total land reserve of the group was 41.44 square kilometers. There would be an increase of 58%. The price per square meter, comparing with direct acquisition from the market, is at an advantage, and it includes the construction cost that CITIC have already invested in. Now in the property portfolio, 10 major cities, including Guangzhou, Shenzhen, Foshan, Suzhou are included.
For these 10 cities, well, in the past, in our business layout, they continue to make important contribution to us. Besides, quite a lot of land resources have been consumed. In this asset portfolio, in these 10 major cities, total reserve has an area of 18 million sq m, accounting for three-quarter of the total. This can effectively supplement to our land reserve. In the asset portfolio, the projects are in different stages of development. Projects under construction have GFA of around 15 million sq m. Under normal circumstances, there will be more than half of the area that can realize sales contribution. We believe that this property portfolio for our operating scale of this year will be very positive. I think you all are happy to hear this sentence. I can tell you, well, I can only say verbally, but I cannot give you figures.
This transaction has important strategic meaning to the group. Through business integration, our group will be able to realize business leapfrog developments within a short period of time, we are able to have our leading position realized, and we can strengthen our leading position in the Chinese property sector. Besides, CITIC will become our strategic shareholder. In the future, both parties will continue long-term cooperation to achieve synergy. We will explore potential opportunities in various areas. Target asset portfolio contains quality projects, they can effectively supplement to our land reserve in major cities. Finally, through this strategic acquisition and cooperation, our business growth prospect can also be strengthened. In fact, I have already explained these points on the slide. I won't read out all the words. You can read them yourselves.
In this cooperation, we will make sure that our own strengths can be realized to maximize the value of the asset portfolio. They include, in terms of profitability. We will capitalize on our strengths in terms of our brand and execution. We will strengthen cost control, selling premium, and reinforce the profitability of projects. Besides, we will expedite the turnover of the assets. We will also expedite the development cycle. Within a short period of time, we are able to realize income and profit. In terms of asset structure, now for the target assets and liabilities, the cost is on the high side. After integration, through very diversified financing channels, we are able to adjust the debt structure to lower financing cost. The group, at the end of 2015, the net gearing ratio is on the low side.
If we can increase leveraging, this is beneficial to shareholder return. After the announcement, all three rating agencies have made reports. We expect that integration will not affect our credit rating. We will make efforts on all fronts to release the value of the asset portfolio. We hope to strive for positive contribution in terms of EPS and NAV. This transaction will be in line with our development strategy all along. It will be favorable to the vision of our company. We will continue to develop property developments in order to capitalize on our strengths. We will continue to be focused on tier 1, 2 important cities in China in order to enhance market share. We will capitalize on our leading brand name to do a good job in product quality, sales management, and cost control, execution efficiency and so on. These are core competencies.
In this way, we are able to create bigger economies of scale. Well, all these have been read by me for the sake of your writing report. If I don't read them out, perhaps it will make things difficult for you in writing report. For China Overseas and CITIC, in the future, we will maintain long-term cooperation to promote development in a mutually beneficial way. In the future, M&A and integration will become our normal growth model. It will run parallel with organic growth. In the integration process, we will exercise our strength in execution. We will promote integration with high effectiveness, and our value creation process will not slow down. Okay, this part is actually a norm every year. We will share with you our views about the market and strategies.
I think you are all very familiar with our strategies, I don't need to go through them in detail. I just want to share with you our judgment and views about the market. I believe that if you look at the Chinese property sector in the past one to two years, there are quite a lot of divergences or variance. Different people, different investors have different views about the Chinese property market. I think I can do some sharing with you here together. Concerning sector outlook, we are cautiously optimistic. Concerning the market and the sector, we have not really changed our judgment significantly. Under the new normal economic position, while the 13th Five-Year Plan is being implemented in China, the goal is to build a moderately wealthy society in 2020, then income per capita should be doubled.
I think that this goal, this target can be achieved. There will be reform in terms of household registration and there will be a breakthrough too. These will bring about new development opportunities for our industry. There will be some actual demand that will be gradually released. I can share with you a figure. We expect that by 2020, in the coming five years, every year in the property market, there will be a scale of clearance or sell-through scale of 1.1 billion-1.2 billion square meters. Well, we can expect that. We believe that market segmentation and market integration will be normalized. Last year, in major tier 1, tier 2 cities, if you look at land price and property price, they achieved new highs.
Even though it is because of the mechanism, property developers are being challenged in their ability to face up to market conditions and their stable operation capability. It is a very stringent examination. Comparing with the past in these cities, concerning property price and also capacity of each market, well perhaps you will have some expectation, but now in many places, both land price and property price are high. For companies with different financial position, companies with different operations, companies with different degree of professionalism, it is a big challenge, a big test for them. In the past, you worked in the property development sector. Well, if companies only used a very rudimentary or broad-brushed approach, they will find it difficult to survive. In the coming few years, in major tier 1, 2 cities, market share will be concentrated on strong enterprises.
There will be a continuous market consolidation and integration. This is inevitable. In the past, I kept making this point. Some of you may not believe in me, but I believe that gradually, that will be the direction. Again, I have a number to share with you. It represents my personal judgment. If you find it useful, you can write it down, otherwise, just listen. In the coming five years, in the top 100 developers, they will get 50%-60% market share in total. You can calculate. How much will be the area for these top 100 companies? You can easily work that out. For the existing property developers, in previous communications with you, some friends asked me, "What is the maximum scale?" Well, you can work that out. What should constitute a big scale?
On this slide, you can see some statistics for the 13th Five-Year Plan. I won't go through them one by one. Here, there's a piece of information that you should be interested in. When the urban population continues to grow, we expect that in 2020, urbanization rates in major cities of China will reach 65%. Next, policies and some hotspots. I think you often receive such reports. I will not go through them. Well, there are a number of times of interest rate cut and benchmark cut, and that will be guarantee for healthy long-term development of the property sector. We believe that from 2015 till now, there are a few hot issues. In the coming long period, they will also be focus of concern. First, in some cities, there is a controlled land supply. Well, you all study our sector.
I think this is something that you are concerned about, that is land supply. Second, down payment will be lowered, and mortgage loan will increase. This will lead to changes in the industry. Number 3, financial and tax reform. This year, there will be a lot of financial and tax reform measures which you will be interested in. Number 4, faster implementation of urbanization. In the past, we have been talking about urbanization. Actually, there are no specific targets and no rules. In the 13th Five-Year Plan starting this year, there will be specific data and targets. It will be like GDP number. Every year, people will refer to these numbers. Next, our operation strategy. I will not go through them one by one. I guess you are all familiar with these. There isn't major change.
If there is change, I will tell you, so far, there has not been changes, and our operation strategies are in line with our current position. I will not read out these points. I will leave more time for exchanges. Next, our financing and debt structure. I said earlier, we have multi-currency financing as of the end of last year. We lowered the number to 70% as targeted. USD, HKD, RMB debt structure ratio will reach 50%. While we are adjusting our debt portfolio, this is an important move. We believe that when the Chinese economy continues to develop well, RMB will regain stability. As a large enterprise, adjustment to our debt mix is something that we have to closely monitor continuously.
Today, at first, I was not going to talk about this part, but it may not be good, so I am going to briefly go through the guidance with you. I don't know how much you believe in it because the transaction is not completed yet. The important assets are still not included. I hope that when we meet each other during interim results announcements, We can deliver a very realistic target in line with the circumstances. Apart from that, we have still given you a sales target here this year for the whole year without including CITIC Property portfolio. The target is HKD 185 billion. There is a 10% increase from last year's target. This is not low, right? You still find it low? Your facial expression told me that.
This year, there are a few things I would like to share with you. First, for the whole year, saleable resources. The numbers I'm giving you now do not include CITIC Properties asset portfolio, because that cannot be disclosed. I'm telling you what I can. I am not breaking the rules, but they are not something you are most interested in. For the whole year, saleable resources amounted to HKD 260 billion. Our target is to complete it at 70%, so HKD 185 billion. In terms of land reserve, apart from integrating CITIC Properties, this year, if our financial position allows and if there are opportunities, we will appropriately replenish our land reserve. In order to enable shareholders to share the development results of the group, our future dividend payment ratio will be gradually formalized.
Without including a special dividend, last year in spin-off, well, that was not considered in dividend payment. A special dividend, it is not paid out every year. This year, there is special dividend. Next year, whether or not there will be, I can't tell. You can decide on whether you will look forward to it. Without including special dividend and without including revaluation gain of commercial properties, we hope that dividend payment can be at least 20% of net profit. In the past, I only said we hope to achieve a certain level. Now we want to make this a formal strategy or policy. Okay. That's all I would like to say. Please don't ask me questions that I can't answer, because our lawyer has given me this instruction. You are all professional. Just ask questions that I can answer.
If there are questions that I can't answer, I will be embarrassed, you will be embarrassed. If I'm not allowed to say something, I won't give that answer. There are so many of you, and it's like an open occasion. If there is any guidance on future profitability, we can't give those figures. If I can't share with you the figures, why are you asking? Please just ask questions that we can answer, okay? Thank you. Okay, please raise your hands if you would like to ask questions, and please state the organization you represent. Front row, please. Mr. Hao, I'm from DPS. My name is Carol. I have three questions. First, in the future, concerning GP margin, what will be the trend? This year, GP margin is around 28.6%, and last year, including CITIC Properties contribution for 2014, GP margin was 28.4%.
There is slight increase, it looks good. However, comparing with 30% or above GP margin from acquiring land yourself, it seems that it is much lower. In the future, what would be the trend of GP margin? With CITIC Properties assets, will it be true that GP margin will be more or less at this level, or there is upside? Second question is related to the first question. Mr. Hao said in the future, M&A will be your normal way or normal growth model. If you can create over 30% GP margin by acquiring land yourselves, GP margin from M&A cannot reach that target, why do you consider M&A as a normal growth model? That's my second question. Third question, about CITIC Properties, the acquisition of assets from CITIC Properties, what is the current GP margin? Thank you for your questions.
I believe these are questions that you are interested in. As I said earlier, in the past two to three years, there are changes in our financial statements. There are big changes. There are spin-off, restructuring, reorganization, reshaping, and so on. Comparability is not high. Of course. A company needs to maintain high GP margin. That is something that we strive to achieve. Now we are concerned about overall profit growth. In terms of booking of items, we have to strike a balance. In a certain year, GP margin can be quite good. We will make arrangements in the selection of projects. Last year, 28.6%. Well, this is a result after some changes. There is one point I can make.
Last year, at the beginning of last year, when it comes to past inventory accumulated over many years, last year, we handled or disposed of that inventory. The value was around HKD 20 billion. GP margin is 23% of these assets, our overall GP margin was pulled down by three to four percentage points. What do I mean? In the future, to maintain 30% or above GP margin is our goal. I haven't given up this goal. In a certain year, there may be changes. I can still explain things to you. It is not that our overall return is coming down. I can tell you responsibly that that isn't the case. There may be ups and downs in different years, I will strive for a balance. This year, I guess you will look forward to it.
We are selling properties at very good GP margins, I am highly confident. I want to say that the GP margin is excellent, very good. During the transitional period, it doesn't mean that our strategies have changed. I am looking for 30% or above, whether it will be 35% or 38%, it depends. If I tell you 38%, you won't believe in me because the scale is too large. Every year when we achieve certain growth, if the growth can be so high, we will be like gods, like fairies. Fairies don't exist, right? Secondly, about M&A growth. In our operating strategies all along, we have three points. I said to you, we hope to have organic growth, M&A, and joint development. These are our three growth models.
In the past, in terms of scale, our scale was relatively small, and we maintained good organic growth. That is our way of maximization of benefit. In those cities where we replenish land reserve, it is difficult to get the past cost or price to achieve that. If you calculate, well, there are numbers that I cannot disclose. After some time, you can see in this asset portfolio, you will tell the average land price. Later on you will see. If I buy 30 million or 20 million now, let's say every year I maintain 15 million square meters of land reserve, then the average price will not be that number. It will reduce our profitability. Our target is consistent. The direction and the approaches will be slightly different. It doesn't matter which approach we adopt, we want to maintain very strong profitability.
We want to maximize shareholder value. I have indirectly answered your question about GP margin of the asset portfolio. I can't answer that, but I guess very soon you will know. There are two points that I have uttered. I don't know whether you have paid attention. There is positive impact. What does that mean? Positive impact. I didn't give you any numbers. I haven't broken the rule, okay? Whether or not this is creditworthy, you can come to your own judgment. If you think that my words are usually reliable, then okay, that's your judgment. I cannot answer with numbers. I can only make these less specific points. Next question, please. The one on the fourth row. Mr. Hao, management. I am Ryan from Morgan. I have a few questions. First, in the past, a question was asked to Mr. Hao about Northeastern China.
China Overseas made quite a lot of investment there. What do you think will be the Northeastern China market? Back then you said that the region was definitely good. Have you changed your view? About the assets, you just said that the asset turnover will be made faster. Now, for some sites, they are relatively large. For example, in Guangdong, there are projects with over 1 million square meters, and also there are sites in Hainan. In one year, the sales volume will be 100,000, but then you have land reserve for 3 to 4 years, and some projects may take 10 years. Will asset turnover be slowed down? What will be your measures or moves? That's my second question. Another question is, in 2014 financial statements, there is a reinstatement, and then profit had come down. When Zhongjian injected assets, there was provision.
What is the value of provision for 2014 and 2015? My last question is, if I ask directly, Mr. Hao may not be able to answer, I put my question in another way. In Beijing East Four Ring, there is a site with a high-rise building. Will that building be included under China Overseas? Thank you. I can answer the first three questions. The fourth question is difficult. I will take the first two questions. The third question will be taken by our CFO about the assets. Northeastern China is a place where it is worthy of expectation. We can look forward to it because in the past developments, it has two different stages. One stage is before the open reform of China. The major industry, that is agriculture of the Republic, has the main production base there.
After the open reform, there is restructuring and adjustment of economic structure and also transformation of the industries. Because of some historical reasons, these cities face difficulties in the development of industries. However, I believe that the situation is different. For those cities in northeastern China, the three provinces, Heilongjiang, Jilin, and Liaoning. For these three provinces, economic development lagged behind the whole country. For our industry, there should be some diversification of investments. You always talked about nationwide country enterprises. You won't say Beijing, Shanghai companies, because there must be different stages of developments. For the industry, you may have to avoid certain risk, so you need to diversify investments. Looking at the current performance of northeastern China, our development there is quite okay. At least there are two numbers that can illustrate this point. First, we are performing better than our counterparts.
Number two, for future business developments, they have created and nurtured many talents. Northeastern China is a place where we need to develop and operate. I am not a leader in those three provinces. I won't say that I welcome you to that region. From investment point of view, we deal with that as a region. You talked about the asset portfolio and there are some bigger projects. They may affect our future turnover rates because of market capacity. There are two important numbers. How much have you invested in? I cannot share with you figures, so I find it difficult to answer your question. If I can tell you how much I've invested, then you will know what my asset turnover will be. Investment is small, so it can be recovered very quickly. As for future development arrangement, things must be complementary.
I can only make one point. In places where we are operating in, we hope the assets will not become our development burdens. If it is a burden, then it is a problem. If it is not a burden, then in your normal development rhythm, it is just a different module. I can't answer your fourth question. Right now, it belongs to other people. I can't really say anything. I know what you are referring to, but I can't give you the answer. Perhaps you can talk to me in private. It is too influential. Okay. Thank you. Horace will answer your other question. In 2014, provision was HKD 3.1 billion. In 2015, because of improvement in the market, there are two projects in which we have back provisioned a few hundred million. Next question. The one on the fourth row. Good afternoon.
I am Ning Junhong from Morgan Stanley. I have three questions. First, the first two questions are related to the CITIC transaction. The next question is, for this transaction, did you approach CITIC or CITIC approach you? For this transaction, most part will be settled in shares, the gearing ratio is still low. Why didn't you consider the use of cash for settlement? The third question, after the asset portfolio is in, how much will be the contract sales amount? I didn't hear you clearly. After including the asset portfolio, then for a year, what will be the contract sales amount every year? Wow, that is alarming figure. That is an alarming figure. We are talking about free love. Okay. I think if you only clap with one hand, that is not workable, right? It is free love. It is the most modern thing.
Both parties have the intention. We just want to have the best things realized. A strong player interacts with another strong player or connects with another strong player. As regards shareholding- Your question is like another question asked by a reporter. I did not answer his question. Who approached whom, and why did you give shares to the other side? The same question. Here, I think I can give you the answer. To be honest, a strong player connects with another strong player. CITIC is a very good enterprise. I said that it is a great enterprise during the press conference. The two companies have a lot of things in common in terms of our culture, our philosophy, our background, our roots. The shareholding arrangement is like an integration. To them, it is not a small sum of money.
If they do not have enough trust in us, they will not accept our shares. That means they would like to see that in the future Chinese property industry development, they want to see the two companies having close cooperation. I said in my slide, there may be future further room for cooperation. There was a question that I could not answer just now, and it is related to this part. This is the common intention of the two parties. It is just normal for them to accept shares. You mentioned an indicator. To be honest, I have the broad numbers. Can I tell you that this year we will be at 5 million, 8 million, or 7 million? I cannot be that accurate. I only have a broad figure, I can't tell you. You have to wait. You have to wait. Please don't be too anxious.
After the settlement, if you still have the need, I can meet with you again. I can tell you the specific numbers. Please understand that. I guess you will be able to calculate. Based on our speed, how much can we do? I think you have a good understanding of our company. Please don't put me in a difficult position. Thank you. Next question, please. The one on the first row on the left. Mr. Hao, congratulations. I think this is very favorable to China Overseas. Just now, Mr. Hao sounded happy. If we classify happiness in 5 grades. One, two, three, four, five. How happy, how excited are you? I don't think this will be against the rule, right? A, B, C, D, E. No numbers then. No numbers. A, B, C, D, E. That's my first question.
This is the second time you are acquiring assets, there are a lot of good things inside, there are some smaller cities. Comparing with Urumqi and some other places, there are a few million square meters of land. If more are added, of course, you cannot just select the good ones and leave the bad ones to the other. How are you going to deal with them? Are you going to work on them gradually, or will you consider other means? My third question is, at the end of last year, there was an acquisition of land in Beijing, Shijingshan. It's very rare to have a piece over 1 million square meters. For this site, we could not get a lot of information about that site. Mr. Hao, can you tell us more about this site?
My last question is, now with this big asset portfolio from CITIC, the scale will be much expanded, and your leading position in the market can be further reinforced. Will you consider more diversification? For example, commercial properties or other diversification moves. Thank you. How can I answer the questions? You cannot tell how happy or excited I am. You can guess the grade of happiness. In order to cooperate with enterprises like CITIC, I am very happy. We can have a good start of cooperation, and I think this is a good start, a good beginning. In the development milestone of an enterprise, with more good business opportunities, I think this is the good luck of 688. I think you can guess my grades of happiness. I do not think it would be below three, right? Perhaps four, five, or grade 6, or there is no grade 6, huh?
You can guess yourselves. Well, we are only joking. I cannot give figures. I guess you want me to convey a positive message, a positive message or neutral message, or neutral negative message. I can say very firmly that this is a positive message. I will not say anything else. I do not know how to perform, and I am afraid of taking photos, okay? As regards the assets, first of all, I have to stress a point. In terms of asset classification, in this asset portfolio, there is not good or bad. It is only about who is going to do it and how. They are all resources. How can the resources, at a point in time, how can the value be realized? Professional companies should think of that. Such as now, there are things that we do not find appropriate, then we will not do it.
In the deliberation process, we have got other considerations. For things that we have acquired, I think that they are all good. It is a matter of how to turn them into maximum value. I understand the hidden meaning of your point. I really cannot answer the question. Please wait and see. In our business development process, I want to make sure that all the work done will be within your expectation. I do not want to give you any surprise. I do not want things to be unexpected. It must be within your expectation. What is the style of development of the company? Should be similar with your expectation. It should not be too uncertain. I do not want to be uncertain day after day. Over the past years, I am very happy that the analyst meeting is of quite a big scale. There are experts of different areas.
I am very grateful. We are willing to maintain regular communication and contact so that you will have good understanding and support to our company. As regards diversification, in the past, I said already that we will focus on our core business. Of course, there are things related to our core business. If they are in line with our strategies and business development needs, then we will do more studies. About Shijingshan, that is a complicated project. There are two phases. It is okay for me to talk about this project. The area is 3 million square meters. We only acquired phase 1. It is an integrated hub. It is a demonstration point of the development of old town, so future figures can show the adaptation and changes. Now we have 1.3 million square meters of development scale. For this 1.3 million square meters, it includes two parts.
Well, some will be used for rehousing of the existing residents. We can't give you accurate number because some will be rehoused in-situ, some may leave after receiving cash payment. The rest will be sale of property units. I believe for this project, now for our future market share in Beijing, I'm not going to talk about monetary terms. For our influence in Beijing and for our future market status in Beijing, it will give big help. Thank you. Next question, please.
Yeah.
The one on the second row Mr. Hao, management, I'm Liu Yesheng from BOCI. I have 2 questions. The first question is about the acquisition of CITIC. This is a very big asset portfolio. The area is around half of your total area. Can you share with us, given this big portfolio, how can you improve its asset turnover and rates of return? In terms of organizational structure and people, what are you going to do? Can you share with us? That's my first question. Secondly, you have cash of around HKD 100 odd billion, how are you going to spend the money? Are you not going to spend it? Mr. Hao, for 2016, is it a good time to acquire land? In some cities like Shenzhen, is it overheated? How sustainable will it be? Thank you. Thank you for your questions.
Concerning our cooperation with CITIC, I gave some introduction about the asset portfolio. I have delivered to you some messages, I can't share with you numbers. I have already given some basic judgment and assessment of the asset portfolio, so I won't go into all the details again. In the reorganization and cooperation process, I understand that you are concerned about the process. In the press conference, questions were asked. I think reporters are even more concerned about that. It seems that you would also like to listen to this kind of content. For this cooperation, who approached whom? Why using shares? I think these are all related questions. For this cooperation, the senior management of both sides attach a lot of importance. In the restructuring process, we formulated a lot of detailed rules, guidelines, and practices.
To be honest, in the restructuring process, there may not be a lot that will be really successful, I think that we can succeed because we have common intention and will. On many internal occasions, I said that CITIC is a very respectable enterprise. They have many outstanding talents, and with talents, there must be the stage or platforms for them. In our area, both companies are good companies, this kind of cooperation will not be a confrontational relationship. It will be a cooperative relationship. Who approached whom? It is free love. Why shares? Because future changes and developments are related. They are now our second-largest shareholder. Would they want to see unfavorable development in us? Definitely not. All these moves and arrangements are worth your expectation. In the process, concerning disposal and arrangement of assets, I cannot give too much content to you.
One day, if I can list out all the numbers, you can see very clearly the actual condition. You said we have money, so how are we going to use the money? Well, we will spend the money. If there are good opportunities, please let me know when there are good opportunities. I really want to spend the money. Well, wealthy people have hard times. Well, this is a remark from my heart. We have to be responsible to shareholders. We have so many employees. We have so many segments. Okay. We have HKD 100 odd billion. Is there any company with more than HKD 100 billion of cash among the property companies in China? I haven't seen that in their financial statements. Is there any such company? No. We have hard times, of course. We can't just spend the money hastily.
The money must be spent in areas which can bring about most value to the company and the maximum return to shareholders. With this philosophy, we'll continue to monitor and look for good investment opportunities. If you find very good opportunities, please contact me any time. Thank you. Oh, overheating in Shenzhen. Shenzhen is only a city. It doesn't represent the whole country. At present, in Shenzhen, there are some small to medium-sized units with quite large extents of property price increase. This is related to power supply. If you compare that with Hong Kong, is it cheap? It's like four or five years ago, the level of Hong Kong price, no. Where is the bubble? I don't think you can say that there is a bubble. Wherever you invest, there will be risk and there will be opportunities.
There may be different projects in the same city and different projects in different cities. There may be different consequences and results. In the past, I said that if you say there are risks in a city or if there are no opportunities in a city, these kind of remarks are not objective. In Shenzhen, there are still many companies running well, including COLI. COLI is doing well. We are searching for opportunities in Shenzhen. I think it depends on overall competencies and strengths, right? Thank you. Because of time constraints, let's take the last question. The one on the third row. It doesn't matter. This is not a press conference. If you want to ask more questions, I can answer. If there are things that I'm not allowed to speak, I won't give the answers. I have three questions. First, about the asset portfolio from Zhongjian.
If Zhongjian does half, and China Overseas also have your own projects, what is the difference in gross profit? For the CITIC asset portfolio, what is the breakdown between RMB and USD in the debts? Do you have any judgment about the tax reform? I didn't hear your last question clearly. Oh, the tax reform. For the Zhongjian asset portfolio, it is gradually realized. Our majority shareholder gave some assets, and they are in line with our estimates. In the past, after adjustment, some projects were adjusted, there were adjustments in the selling price and positioning, more or less the same. Final sales results are more or less the same, in line with our expectation. As regards the asset portfolio of CITIC, I can't give you the details. Please wait. Please don't be anxious. I think it is going to be a positive impact.
There will be a lot of good things. On the 1st of May, there will be this increase in tax. For our industry, it is neutral. It is going to be neutral. In some projects, there would be merits. For COLI, I think positive is bigger than negative. In the past, VAT was high. VAT was very high. For business tax, after business tax was introduced, there may be positive impact. That is our internal analysis. Gradually when the projects are finalized and implemented later on, I believe we can have more discussion on that. Our current assessment is neutral. In some cases, it may be favorable. Thank you. Do you have any more question? Okay, this side. Thank you. I'm from Macquarie. I have a question, not about numbers, but it is also a sensitive question.
In the past, the media said that there is big change in your personnel in senior management. According to the reports, one reason is about your cooperation, deliberation with Zhongjian. There are different styles. Looking towards the future, have you already completed your integration and coordination? In the future, will there be things that need to be done in order to achieve more harmony between the two teams? For sales, land acquisition, will there be good or bad impact? I have another question about personnel, about CITIC acquisition. Both China Overseas and CITIC are two very great SOEs property companies. If you look at the past 10 years, if you look at CITIC's performance in terms of land acquisition and sales and also cost control, regional distribution, to be honest, they lack a lot behind China Overseas.
There is uncertainty and volatility in their sales, which is very big. In the future, when you integrate with their team, will the difficulties encountered be bigger than what you encountered in your integration with Zhongjian? The timing now is maybe too early, concerning senior management, you may have to take up some senior managers in some areas or regions, will that dilute your existing human resources? My last question is about data. Just now in your PPT, there is a reminder. Thank you, Mr. Hao. Last year there was a corporate bond in CITIC. There is total debts of HKD 100 odd billion. If this is integrated with China Overseas, your number will be pushed up a lot. At the end of this year, you won't exceed certain net gearing. What is a comfortable gearing level that you won't exceed? Thank you.
I really can't answer questions about numbers. For your two questions, I think I can answer together as one. Some are related to criticisms or assessment, judgment of CITIC. They will announce results on the 24th, I think you can ask Chairman Chang. I cannot answer questions about them. In the integration process, I believe that you are all concerned about it. In my presentation, I explained how we are going to do it and what we are going to do. In the integration process, people are most concerned about dilution of resources or conflict and so on. These are things that we have to face up to. What we do want to see is the forward pace should not slow down. When the two forces are combined, definitely we must not slow down. Not to mention a faster pace.
We have to maintain the past pace at least. That's the direction and goal of us. I said already that in CITIC, there are many very good talents in the development process. I believe you have strong understanding of the industry. When the two forces join hands, there will definitely be more opportunities. There are changes in our personnel. Well, this is not a press conference. Perhaps I can give some comments. If this is a press conference, I won't take the question. In any industry, any enterprise, it is just normal to see personnel changes. As the person in charge, one of the persons in charge of a company, I most hope to see that an enterprise development will not be affected by change of one to two persons. That's my goal, and that's how I think.
I think that in the company's development milestone, well, you all will think of these things together. Of course, you are very knowledgeable and experienced, every time when we communicate, I would like to listen to your input, and these are questions from shareholders through you as well. We hope to have more exchanges in these areas. Since this is one of the growth models, we don't want it to be a burden. We want it to be a driving force for us to move forward. Thank you. Thank you very much. Oscar. This gentleman is not using microphone. The interpreter can't hear him. The gentleman is not using microphone. The interpreter can't hear him. GP margin is 30.2%. Why is it that you are different from accounting standards and different from the past? Is there anything special? Well, your question is very professional.
I think our CFO can take your question. Thank you. Here, many of you may have studied accounting. Accounting, no matter good or bad, is not something very scientific. What is right, what is wrong? Well, I think, it must be right. If you look at property companies, how is GP margin calculated? As you said, there are two ways. I think you can refer to Vanke. All along, they used the net to calculate. Next year, there will be the new tax system, the new sales tax system. Okay, Oscar. Now, I only understand half of your question. I don't know how you do the calculations, actually, we have been so honest. Even though there is the opportunity to exaggerate the numbers, we did not do it. We just tell you where there are impacts that have affected us.
I've told you honestly the impacts that we have encountered. Can you still find other developers like us? Thank you, Oscar. When I go back, I will have to talk about this with our CFO. Thank you very much. Thank you. Thank you, ladies and gentlemen. This is the end of today's session. End of the session. Thank you.