Dear friends from the investor world, welcome to the 2018 Shimao result announcement. Before we start, I would like to introduce the management team. We have Mr. Xu Shitan, our Vice Chairman as well as CEO. We have Ms. Tang Fei, Executive Director, Assistant to CEO, as well as the Head of Marketing Management Center, Mr. Shao Liang, Mr. Jun Zhao, our CFO. Today's session are divided in the following parts. We have result highlights, financial highlights, business review, and future outlook. First of all, let's welcome Ms. Tang.
Good afternoon, everyone. I am delighted to be here to meet with our new friends and old friends. Thank you for your support and attention all along. Shimao Properties, since 2017, we have entered into a fast growth period. In 2018, with our targeted strategy and our steady growth, we have obtained good results. Let's take a look at our PowerPoints.
Please turn to page four. For Shimao Properties, we achieved a new record high in contracted sales, robust business performance. We continue to have industry-leading profitability and continued in-depth strategic development. Let's take a look at page five. We continue to rise in our ranking. In 2018, contracted sales CNY 176 billion. We have exceeded our four-year sales target of CNY 140 billion, achieving 125.8%. We now rank 11th, and our contracted GFA reaches 10 million square meters.
Turn to page six. In terms of revenue growth margin, gross profit margin, they continue to grow. Revenue, after a year-on-year growth of 18.8% in 2017, we continue to achieve 21.4% year-on-year growth in 2018 to CNY 85 billion. In the meantime, for gross profit margin, having reached 30.4% in 2017, it further rose by another 1% - 31.5%, and year-on-year growth reaching 25.8%. Page seven.
Substantial growth in core profit attributable to shareholders. Net profit continues to maintain the leading position in the industry. CNY core net profit 11.73 billion. Core profit attributable to shareholders CNY 8.5 billion. Year-on-year growth 23.4%. Core net profit margin 14.6%, up by 0.6 percentage point. Operating profit CNY 23.21 billion. Year-on-year growth 31.3%. Profit attributable to shareholders CNY 8.83 billion. Year-on-year growth 12.7%. Earning per share CNY 2.647. Year-on-year growth 13.9%. With great profit has guaranteed good dividend for Shimao. We always remember to pay back to our shareholders for their support, and we have decided to issue dividend of HKD 120 cents per share, an increase of 20%. In the meantime, whilst we're developing our business, we continue to deepen penetration in key state strategic areas.
For example, in the Greater Bay Area, Shimao has grasped this historical opportunity in Shenzhen, Qianhai, Longgang, and Pingshan, building three towers in one city as new city landmarks. In addition, we continue to develop in Hangzhou Bay Area, growing together with the city cluster, helping build city diversity. The new hot spot in Shanghai, InterContinental Shanghai Wonderland, is widely viewed as one of the world's architectural wonders. In 2018, Shanghai Shimao Festival City, it underwent detailed transformation and upgrading. It is also a beginning point of Shimao Properties going into this area. In terms of land bank, by end of 2018, contracted sales of Shanghai Shimao grew by 25.5%, and it is about 32.6% of the average price of our contracts. With the new equities, including Hangzhou Bay and Greater Bay Area. Please turn to page 10.
In terms of the Shimao Group holdings, our revenue continued to grow steadily. CNY 27.1 billion, an increase of 25.5%. Revenue CNY 20.67 billion, an increase of 10.7%. Profit attributable to shareholders CNY 2.4 billion, an increase of 8%. Please turn to page 14. In order to face actively the changes of the environment, we continued to work hard on cash collection. We have used various ways to help us to work on cash collection, and we continued to reach historical highs. in 2018, we have reached CNY 137.4 billion, an increase of 70.4%, and the cash collection ratio was 78% by end of 2018. In terms of cash on hand, it reached CNY 49.58 billion. Unutilized credit facility reached CNY 40 billion. This has laid a solid foundation for the future development of the company. Please turn to page 14.
In terms of debt structure, it is very solid, and we have innovative financing channels. By 2018, CNY 109.13 billion. This is balance of our borrowings up by 24.7%. This is a reasonable change in our debt structure, which means that we have always had a very healthy borrowing. For our borrowing, majority of it is long-term borrowing, accounting for 71% of the total borrowing, CNY 77.82 billion. Short-term borrowing, CNY 31.31 billion, accounting for 29%. In terms of innovation, we continued to do well in this regard, and we have been able to become a leader in the financial innovation in the industry. In the meantime, we continued to expand in the overseas financing channels and bond market. Please turn to page 15.
From January 2018 to February 2019, we have issued various senior notes, and we were able to receive back some of the old notes that we have issued. In the meantime, it is also worth mentioning that a total of CNY 2.15 billion dim sum bonds were issued successfully in 2018, with the heated market response. In the meantime, we have also been able to sign a four-year $570 million plus 3.55 billion offshore syndicated loan facility. With all this, we are able to obtain the blended financing cost at 5.8%, with a steady growth. Shimao was again positively adjusted by the credit companies, and Moody's has upgraded Shimao's credit rating from Ba2 stable to Ba2 positive. Whilst we work hard, we have been able to contain our gearing ratio at a relatively low ratio. Please turn to page 16.
In 2018, it rose slightly compared with the previous year, at 59.4% compared with the previous year over 58.9%. Compared to the middle of 2018, it was at 62.7%. If we consider about the extra value from the hotels, I believe that this could be further downgraded to about 50%. Please turn to page 17. Our asset continued to grow. Total asset CNY 377.6 billion, an increase of 22.8%. Fixed asset CNY 59.43 billion, an increase of 6.7%. In terms of the hotels and major investment properties, reached CNY 75.9 billion. Total equity, an increase of 8.8%. This is the financial highlights of Shimao Properties for 2018. Now I pass the floor to Mr. Shao on the business and future outlook.
Thank you, Ms. Tang. Dear investors, good afternoon. I am going to talk to you about our operations and business.
In terms of revenue breakdown, we have reached CNY 85.51 billion, and those can be 94% of the total portfolio. Next page. On the hotel revenue breakdown in 2018, turnover from hotel operation rental reaching CNY 4.61 billion. This is a remarkable achievement. An increase of 100. Other income is mainly derived from project management. Theme parks increased significantly by 150.7% year-on-year. For hotel operation, it is going well. For 2018, aggregate revenue of CNY 1,908 million. EBITDA amounted to CNY 590 million. Turnover uptick of 11.7%. In 2018, we have three hotels newly opened. They are the InterContinental Shanghai Wonderland, and this hotel was also considered as the architectural wonder of the world by the National Geographic magazine in the United States In terms of recorded commercial property operation income, it has reached CNY 1,091 million.
EBITDA was CNY 610 million, outstanding EBITDA margin at 56%, again leading in the industry. In addition, for Shanghai Shimao Festival Walk, Shanghai Shimao Festival City, they have relaunched their business. In terms of the future rental, it will contribute greatly. Next page. In terms of land bank and land reserve.
Land reserve in 87 cities, 264 projects. By end of 2018, covering a gross GFA of 55.38 million square meters, the Group has sufficient reserves of saleable resources valued over CNY 900 billion to meet the continuously growing demand in the future. In terms of land acquisition, we have acquired 96 land parcels in 2018 with a total land cost of CNY 82.3 billion and a GFA of 16.15 million square meters. The newly obtained cities are mainly from first-tier, second-tier cities, as well as these strong third and fourth-tier cities. They account for 33%, 38%, 27%, and 2% respectively.
Next page. In terms of nationwide quality land reserve, we have the hot areas of land reserves, and they have laid a solid foundation for the future. Shimao Property will follow the country's strategy closely, especially those which are in line with the national strategies in Yangtze River Delta, Fujian, Greater Bay Area, and Northern China region, Jing -Jin -Ji. They have also reached over hundreds of billions. Next page. Thanks to the growth of the company, as well as the internal improvement of efficiency, Group's SG&A contracted sales ratio was 2.98%, down by another 1.28% year-on-year. Both the ratios of development properties of SG&A contracted sales ratio was 2.19%, down by 0.89% year-on-year, leading in the industry in terms of cost effectiveness.
Looking at the operation targets for 2018, we expect that with the land that we have already obtained, the project cost and other cash flows, we can realize a healthy level of operating cash flow. In terms of saleable resources for 2019, excluding the saleable GFA in 2019 will total approximately 19.45 million square meters. Assuming a conservative ASP of CNY 18,000 square meters, the total value of saleable resources would be CNY 350 billion. Based on the conservative sell-through assumption of 60%, Group estimates its contracted sales to reach CNY 210 billion in 2019. For sales performance, contracted sales 2018 reached CNY 176.1 billion, with a completion rate of 126%, exceeding our target by CNY 36.1 billion. The growth has reached a record high. Continue to stay on a steady growth track. For 2018, the beginning of 2018, Group boosted de-stocking efforts in the beginning of 2018.
The sell-through rate was still able to reach 65%, same as 2017 in the downward trend of the market. Inventory aged over one year decreased by 24% and laying a good foundation for the sales performance in 2019. In terms of cash collection, reached CNY 137.4 billion in 2018, completion rate of 123%, exceeding our target by CNY 25.4 billion. Amidst banks' tighter mortgage policies and restrictions on contract fighting in more cities, the Group's cash collection still registered a year-on-year growth of 70%. Next page. In terms of the layout in key cities and supply, covered 87 cities, an increase by 85% compared with 2017. Key provincial capital city penetration rate reached 73%. Group continued to focus on cities with high sales generating capacity. 12 cities were ranked top 10 in terms of market share in 2018.
For supply and target of operations, we have around CNY 350 billion of saleable resources in 2019. Group will be able to reach 2019 contracted sale target with just a sell-through rate of 60%. By actively increasing the sell-through rate, ASP contributions from new land acquisition, group is confident of beating the contracted sales target of CNY 210 billion. For the key strategies for key cities. For those first and second-tier cities, as well as strong third and fourth-tier cities, the healthy sell-through rate increased by 8%, and 50% of them are concentrated in 10 core cities. Moreover, in Guangzhou and Shenzhen, in Greater Bay areas, we will have more projects. Not only that, we will ensure the sales target, but also drive more premium product pricing.
For 2019, in terms of management, in 2019, the group will enhance front-end risk control and target-oriented delicacy management, as well as empower brand via diversification and innovation to grow business scale and profits. We will ensure the completion rate of contracted sales target is expected to reach around 20% by Q1 2019, and 50% by first half of 2019. I can tell you that by end of yesterday, our Q1's signing should be close to CNY 40 billion, and the sales would be around 20%. According to the supply progress for the first half of this year, it will also reach 50% for the first half of this year. I think 2019 is a year that is worth looking forward to, and this is in terms of operation and business overview. We have Mr. Xu to talk to us about conclusions.
Good afternoon, everyone. Let's first of all, take a look at the market. In 2018, it reached a historical high at CNY 14.99 trillion. For 2019, we are fairly conservative because we have sold quite well in the first half of 2018. But second half of 2018, actually, we have a downward trend. We believe that the market is expected to drop by about 10% in 2019. We think that first and second-tier cities would be very good, especially in terms of price.
For volumes, I think that there will be more growth, and for third and fourth-tier cities, they will face both pressures in terms of downward pressures for price and volume. We think that the top 20 companies would still enjoy a 20% growth. In terms of policies, actually, it has already turned into one city with one policy. We can now see a lot of cities, they are relaxing.
For example, the percentage of down payment and the interest rate for first-time buyers, it has come down. If you buy apartment, you will also be able to obtain a local hukou. Those are the same ideas that we have. They are relatively conservative, but this is the signal that is being sent out by the market, especially before Chinese New Year. We have seen that the newly increased debt had reached CNY 3 trillion, and all of this has caused that the market, especially the land market, is very hot. We are already monitoring a few dozens of plots of land, and a lot of these land, they have already reached or become the land king, exceeding their price of last year.
In over 10 cities last year, we have seen over 10 cities have seen price decrease, but the past few months have already recovered that. I remember that in the hottest period, in the top 100 land parcels, you would be able to get 10- 15, but now you are not even able to get 10 out of top 100. I believe that all our peers are predicting that the land price will increase. We hope that the growth margin could be 25% and net profit could be 8%-10%, but the land that people are getting auctioned for, they are only 2%-3% or sometimes even negative. Investors would say this is first and second-tier cities. You are wrong. Even the strong third and fourth-tier cities, they are also this situation.
In Nanchong, in Western China, it is definitely third or fourth-tier city or even fifth-tier cities, and for them to bid for a piece of land is negative growth. You can see, and I am going to talk to you more about the preparations that we have made. Overall speaking, our contracted sales grew by 75%. In terms of ranking, we rank 11th. We have jumped from 16th- 11th. For this year, we believe that we will have another 20% of growth, so our ranking should be further improved for this year. For gross profit, further increased, and 31.5%. In terms of core net profit, increased 25.3%. Core profit attributable to shareholders increased 23.4%. Net gearing ratio 59.4%. Some investors might say that you are growing very fast in recent years. However, I can actually explain this to you.
In 2017, if you are using over 60% and it is only 30% roughly, so at about 20 something percent of core net profit growth, this is reasonable. This year, I believe that it would be reasonable. For 75%, this is before the EBITDA, and last year it was 31%. I think that adding this year, for three consecutive years, our core net profit will have increased by 20%+, and our sales from CNY 70 billion -CNY 170 billion and to this year even to CNY 200 billion. Of course, our share price is cheaper at the moment. Our chairman have been visiting Shandong, and he was discussing with them about some strategic policies and its implementation. He said that he wanted me to tell the investors that at an appropriate time, he would also continue to buy back shares of the company.
We have these hotels for you, and if you have time, please book our hotels. We have the Hello Kitty, the Bund tour. We also have another hotel in Songjiang, which is similar to Tung Chung in Hong Kong, and it is about CNY 1,000 per night. It is very hard to book, and during Chinese New Year, it is CNY 10,000 per night. We also have worked and entered into the commercial property market. You can see Shanghai Shimao Festival City. We have Nike's flagship store. We also have some KOL store, and before the renovation, it had a rental of CNY 100 million, and after the renovation, it gave us a rental of CNY 300 million. This year, our rental income will increase by 50%. We also have a lot of hotels being constructed and completed. Hotel income for this year will increase by 40%.
For the next three years, we believe hotels CNY 2.4 billion, and next year, CNY 9 billion, in 2021, CNY 13 billion. So, we will achieve 40% growth year-on-year for the next three years. A lot of investors are very concerned about our hotel assets. We have a large volume of hotel property business, and we are already doing preparatory work in this regard. This is not something that I am blowing my own trumpet. Our biggest hotel will be completed this year, is in Hong Kong, Tung Chung. It has 1,200 rooms, and the valuation of this hotel is CNY 10 billion, and each year it will generate an income of CNY 600 million, and this hotel will open next year. You can try and live there and see how you feel.
It is a bit far from the city, but if you are going to the Greater Bay Area, it is a very convenient location. For contracted sales resources, we have CNY 210 billion for 2019. But as Mr. Shao mentioned, this is very conservative. We are expecting that the 20% growth and we are saying 20%+, that is to say we want to exceed the top 20. How do we exceed the top 20? There are a few methods. The first one is to have a higher sell-through rate. For example, now 60%, maybe 65%. Second, average selling price at the moment is CNY 18,000, and last year it was only CNY 16,500. How can you expect this year to be CNY 18,000?
Actually, last year, we have already reached CNY 18,000 in last Q3 and Q4, and in Beijing, apartments are being sold at the rate of CNY 80,000-CNY 100,000 per square meter, and I believe that with such good projects in the first and second-tier cities, they will drive up the price. In addition, for our Q1 investment, we already have CNY 1 billion new saleable resources, out of which CNY 50 billion will become available for sale. We only need to complete slightly more than CNY 50 billion, then we would be able to reach our target. Out of the CNY 50 million, CNY 20 billion of the contracted sales are expected to be generated. This is added on top of the CNY 100 billion. This is our investment. I will also talk to you about our land banking strategy for 2019. Four words.
First of all, it's precise investment. 85% of our land is in first and second-tier cities. The remaining is in other cities. Being rooted in good-performing cities, this is our precondition. The second one is that for the first half of this year, 60% of land investment will be made in first half. Last year, we spent about CNY 60 billion, and that was quite an increase. I believe that this year we have less burden. For Q1, we have already spent some money, and we have 100 billion new saleable resources. You can see that the total land bank saleable resources expected to increase to CNY 1,000 billion. In terms of utilize of continuous investment, we can have 40% of sales and 50% of cash collected on land investment. If we can meet the target, we do not exclude the possibility of buying some more land.
I think keeping it at about 60%, that should not be a problem. But of course, if there is any adjustment in the market, we will also control our investment into land. Finally, on diversification and multiple channels. I already mentioned this earlier. Recently, we have carried out a major M&A for the top 20 companies. We have purchased some asset packages as well as for top 50 and top 100. We have not made the announcement yet. This will be announced in August this year when we release our first half of the annual result announcement for 2019, and you will hear about it later in August. You can see that the gross margin is about 2%-3% of these packages of asset, and I think that this is much better than bidding for a piece of land.
I believe that this is a big year of acquisition for our company. Of course, we will have some minor equities, where our chairman is currently discussing with the government in terms of policy implementation. For our vision, we want to become an industry leader, a leading living service provider in China, not only in residential but also commercial theme parks, hotels, and property management. Of course, we can also obtain some strategic projects from the government, such as nursing homes or smart technology, et cetera. Now we move on to the QA session. Before we start, please let us know who you are and where you come from.
Good afternoon. I'm Wang Huijing from CICC. Thank you for your sharing. I have three questions.
The first, with respect to sales for Shimao, whether it is land bank or your arrangement, I think that you are still focusing on the Yangtze River Delta area. For these areas, we know that the flexibility or volatility, so to speak, is quite big. What is your view on this, especially in terms of sell-through rate? Second, on the booking of profit. Just now you said if it is after tax, and we can also see that 2018 compared to 2017, it's actually slightly less compared to 2017. How do you make sure that your core net profit can continue to grow compared with 2018? I hope that with respect to this, perhaps you can shed more light for those which have not been booked yet. For 2019, what are your plans? Can you share with us more guidance?
Last question is with respect to the profit problems for the first half and second half, and how do you plan and arrange this? Do you expect that in the mid of 2019, we will be able to see the profitability picking up speed?
Well, actually, Yangtze River Delta for sales, this is an important market for us. For Fujian, we have continuously to be number one in the market in Fuzhou, Quanzhou, and in these cities, we are always number one. Actually, we are not only strong in those traditional areas, as Mr. Shao mentioned, in Greater Bay Area, especially in Shenzhen and Guangzhou. The resources available for sale, we have grown quite a lot. In next year, there will be even more. In Hong Kong, we have two more property projects to be launched, and adding together, that would be CNY 60 billion.
For Greater Bay Area for next year would be CNY 100 billion. In the next two years when Hong Kong's projects are launched, I believe that this will help with our profit and profit margin greatly. In Kowloon, our project is only over 10,000, and Kerry is also selling some of its villas. We will remain and see how we sell our villa projects. Not only that we have investment in Yangtze River Delta, we also have projects in Greater Bay Area, in Northern China, et cetera. I have also said that we have purchased some asset packages and they range from all the geographic locations in China. Not only limited to Yangtze River Delta. For Q1, we will be able to complete about 20%. About 20% growth compared to last year.
For first half of this year, we hope that we can exceed CNY 100 billion, and if we can exceed that would be 40% growth, and then second half will be even faster. For profit for 2018, actually, our sales growth is way higher than 2017. For 2017 is 50%, in 2018 is 75%. The amount that gets booked is a lot higher than last year. As I said, it is not that 70% of profit growth, and this is before equity, and after equity it would be 40%. However, like I said, our growth margin will be slightly down, but we are confident that it would be 30%. Then we will have already maintained a growth of 20% + for consecutively three years. We have used a very conservative method of accounting, and we haven't actually used the new accounting rules.
With the new accounting rules, you don't actually need to deliver flats, and we haven't actually used the new rules. We have also saved some of the resources to be booked for this year, and first half of this year, we believe that there will be growth, but the growth will be even bigger in the second half of this year. This is why I'm saying that for the whole year, we would be able to exceed the target quite a lot. In terms of being booked, coming into the book for second half of this year, I believe that the industry would be 40%-60%, and some companies might be 30%- 70% in terms of what can be booked for first half and second half. But overall speaking, second half will be more than the first half.
Thank you. I'm Ryan from JP Morgan.
I have a few questions. A lot of people might ask this. We have heard CNY 210 billion. Sounds like this target is definitely going to be exceeded for 2017. The sell-through rate is fairly low because of the restriction policies for 2018. For 2019, do you think that the sell-through rate can be higher than the previous two years? If it is higher, I believe that CNY 210 billion can definitely be achieved. Another question, in terms of the credit rating of the company, we have seen that it is being upgraded. I want to ask, has there been any credit rating agency they would upgrade the company's rating to investment grade? Third question, for SG&A's control. Actually, for this year, for this quarter, all the developers, SG&A is going up and Shimao is keeping it well under control.
I want to ask, is this because this is related to your incentive programs or any other reasons? Can this be further extended into 2019 and 2020?
The first one is about sales target. Actually, we talked about CNY 210 billion. This is relatively conservative because we have about CNY 400 billion resources for sell-through rate. It's hard to say. 65% should be a fairly high level in the business, in the industry, and the industry average is 55%. Using 60%, we are conservative. I think that we should be higher than 60%, but to be higher than 65%, it would be hard.
Because a lot of the land, we are buying the land this year and to provide the product and deliver the product this year, this would be difficult unless it is a project that we have acquired, and they have already started their building or their construction halfway. We have some announcement to be made in this respect. I think that if the land is being acquired in the first half of this year, it won't be able to be sold until the second half of this year. If you are buying land in Q2, then the buildings could only be sold in November. If you are buying in Q3, then the apartments will have to be sold until next year. I think that achieving sales through rate of 63% is quite good.
Actually, I've been telling Mr. Shao that some of the land, I don't want to sell in CM. We have obtained some good land, and my colleagues told me CNY 1 billion, about 7% after tax. So, gross margin 25%, 22%, 23%. How much do you think that went for? It went for CNY 2 billion. I was shocked, and I told Mr. Shao, I have to put up my price. However, I can't, because there is a price cap. So, I had to discuss with the government. A lot of these are problems. It doesn't mean that the higher the sell-through rate, the better it is. Sometimes the sell-through rate is high, then you might sacrifice your profit. Two years ago, I have already told the investors, and I have told them 2018, 2019, it would be growing very fast.
A lot of investors felt that you already grew 50%, 75%, how can you continue to grow? We are now looking at it and thinking that we are growing well. In terms of your second question for credit rating, how do you become investment grade? You have to have stable sales, and they don't want us to buy a lot of land. If you don't buy a lot of land, then you're not able to grow. This is a bit conflictory. What we are doing at the moment is to acquire. Acquisition is actually not a bad idea, and once you acquire, you are able to sell. For Shimao, actually, our acquisition advantage is that we are very fast, and we make payment very fast.
The second day, we will send about CNY 10 billion to your account, and the counterparty will be very happy. We will also work hard in this regard. If you are too aggressive in terms of land purchasing, then your credit rating will not go up. What's more important is that our asset can have some cash collections, for example, for our hotels, if we can spin off and become listed. Actually, that would be amazing. A lot of our hotels have already increased greatly in value. I have seen that there is one company that is listed, but actually, there's no profit for that company. For our hotel, it's 31%, and I believe that we will be able to reach 35% when we list. We can promote this later on. So, our gross margin is very high.
I believe that for hotels, as our Hong Kong hotel and the InterContinental Shanghai Wonderland hotel, we would have gross margin of 50%. Of course, we also do not exclude the possibility of obtaining very cheap land and selling it at five times or 10 times of the price. With this sort of project, you will have a great net profit and gross profit. Of course, with that, your credit rating will also jump. Last but not least, Mr. Shao talked about two figures for depreciation, 2.9%, 3% roughly. If we exclude that, a lot of companies do not work in hotels, and this is not a sales cost. This is actually sales plus bonus and plus a lot of things. So, it's really lowest in the industry.
Overall speaking, in terms of cost control, including our investment in the front end of the product, we have worked hard, and in the next few years, I don't think that there will be a lot of changes. We hope that we can maintain the level of what we have. I believe that there is room for further reduction in this regard.
Good afternoon. I'm Ken from Citibank. I have one question for Jason. For the land issue, I remember last year in August, you said that in second half, you will find some bottom opportunities, and we have seen that has already become successful for CNY 60 billion-CNY 80 billion increased. For first half of this year, in terms of land purchasing, with this background, for the second half of this year, does that mean you will have fewer opportunities?
If this is the case, if this maintains for a long time, will this affect your gross margin. Does that mean that you can accept some low gross margin project? Second, for dividend, we can see that your EPS grown by 20%, is slightly lower than net profit. But for your rental, you said your rental grew so much. In terms of the recurrent income, will you have more return to the shareholders?
Well, for the investment in land, actually, this time period is very short. Looking back, the lowest period is Q4 last year, was only about one to two months window. In Q3, we did not buy a lot of land. I looked at the market at that time, a top three company, and they issued bond at 13%, and that was the scariest time, and a lot of people were worried, and RMB was depreciating.
Interest rate was very high. We looked at a lot of cities, and there was about 20% decrease compared to its peak. However, a lot of cities have already overtaken their peak price, and of course, I am talking about the good cities. So, there was only two to three months of opportunity of taking advantage of the bottom of the market. For Q1, we have done well. The land that we have acquired, actually, we were discussing about them last year, end of last year, and we did due diligence in January, and we paid in February. Actually, this is in line with the developer's habit. You are often very tight of cash before Chinese New Year. Right now, we still have a lot of acquisitions, not only just one company. There will be top 20, top 50, and top 100 companies.
For bidding of land, of course we will still go to such bidding events. But if it is too low, we will not go. A lot cities are very small. I do not know if you heard about them. One city called Haimen, it is under Nantong. I do not know if you have heard about it, and the bidding process took six hours, and that is really hard work.
We only would bid something for one hour. So, we are very prudent because we have not added the increase of the sales price. We will not sacrifice our profit in order to purchase land. We already have over CNY 1 trillion of extra value, so that is enough. If there are still better opportunities, of course we will continue. But actually, our chairman met with these top 20, 30, and 50 companies. These bosses, they wanted to sell us stuff.
But then they have regretted, and some of them said that, "I would not sell these things to you anymore. I am only selling you what I have agreed with you out of the spirit of contract." So I think that we have been lucky and grasped the good opportunities. For dividend, we are growing at 25%. The dividend payout ratio is almost close to 40%, and what we are discussing is within 30%-40%. So, this year, we have controlled it at 30%+ , and if our core net profit continue to grow by another 30%, it will continue to grow in terms of dividend. In terms of investment properties, investment properties only grew by 40%-50% starting from this year. If this continues, this investment properties, they would also be included in our core net profit.
But of course, this is not a lot, and this does not take up a lot of percentages, about CNY 6 billion. For hotels or commercials and some of our property management companies, if they can be spun off and listed, of course, this would be great, and we would be able to provide more dividend. We have two hotels in the Bund in Shanghai, and they will be upgraded next year. This is Hyatt on the Bund. I believe that a lot of people have heard about it and stayed in there. At the moment, they have revenue of CNY 4 billion, and we hope that after our renovation, it would be able to achieve revenue of CNY 5 billion. This hotel, I asked how much they invested. They invested CNY 1.6 billion, and the depreciation is CNY 1 billion, and their EBITDA margin is only CNY 200 million.
I do not know how much you understand about hotel business. Hotel business is only 3%-4%, but this has 20%, so we have great asset. If next year in the Greater Bay Area, we have about CNY 100 billion worth of projects being launched in Hong Kong. Two of these projects at gross margin of 40%-50%. We were actually quite prudent of the market. We think that it was 10% down, but recently it went crazy. This crazy will definitely be passed into the property market, residential market. For the residential market, I think that in about three to four months' time, they will also feel this change. In the local government, they are also feeling quite itchy. So, perhaps this year the market could be better than what we expect. I think that perhaps it can reach 13% or even 14%.
In first, second-tier cities, the buying of land is quite crazy. Recently, we have participated in some biddings, and we have only achieved two biddings of two pieces of land parcels. I was looking at Xuzhou. I do not know if you heard about this city in Jiangsu. It is a third-tier city, 15 companies, and I saw that, and I felt fainted. In Tianjin, I had also taken a look. One piece of land is CNY 3 billion. I thought, "Oh, maybe I can speak to the boss," but actually, there were seven or eight companies fighting for this. So, you can see, actually it is quite crazy.
I come from UBS. I have a few questions. The first one, for land issue, it is harder to obtain land, long-term speaking, compared with other developers.
For example, when our chairmen go and discuss with other people, with the government, what can you bring to the government? Second question, I want to ask about the hotel and the property management business. For hotels, how many rooms do you have, and what is your book value? In addition, for this year, we think that revenue is about CNY 2 billion. If we look forward for three years, for 2021, there is a forecast, and for the next three years, what is your view on the growth?
Well, for Shimao, I think that we have a lot of advantages in terms of obtaining land. For example, for acquisition for Q1, we have already obtained a lot of projects from Q1. This is because we have a lot of cash on hand, and we pay very quickly. This is one of our advantages for real estate business.
It is capital intensive, so if you have a good discussion, you need to pay immediately. In addition, we also have some projects working with some smaller developers. For example, in Fujian, they would say that I am number one in Fuzhou, in Quanzhou, unless you want to work with number two. Last year, they sold CNY 50 billion, and the whole province only sold CNY 500 billion. So, this year, we have further expanded the area. We call it the Strait Company, because they started obtaining land in Yangtze River Delta area, and they also obtained land in the Southern China area. We feel a lot of pressure. Last year, we had nine companies, and now we only have eight, and we have already lost one chairman of one board.
Mr. Shao said they want to complete 50%, and if they cannot complete that, actually, our 40% target is 50%. If that chairman cannot perform, he will be fired on the spot. For our chairman, our chairman is the standing committee member, and he goes to the provinces, and he will be greeted by the provincial heads. We can take them to go to the InterContinental Shanghai Wonderland and see who else has this ability to build this, or go to this Shanghai Shimao Festival City on Nanjing Road. It is very popular. Now we have amazing shopping mall business. Actually, the number of our business may not be that high. Some people might say we have about 30 or 50 in Shanghai. We have about CNY 300 million in Nanjing. In Shenzhen, we have a mega project, which is about CNY 2 billion-CNY 3 billion.
How great is it? It was so great that the Hong Kong government actually spent tens of billions on a port, which is called Liantang Port. This port will go directly into our hotel. So we are different from other Greater Bay areas. Greater Bay Area for Hong Kong, Shenzhen and Foshan. This is the best ideas. For Yangtze River Delta, it is relatively big, and for Greater Bay Area, it is going strong. For our entertainment hotel business, we have a lot of highlights which can move the government, and we have built ultra-high hotels, 200 m, 300 m, 400 m. We have a lot of topics which can attract the government's attention. We have also bought equities in different companies. For example, unicorn companies such as SenseTime, which is a facial recognition company.
We also have bought equities in a nursing home company, and we can also introduce these projects. In Shenzhen, we have introduced Harrow International School Shenzhen, which is an international school. If you have kids, you will know about this. This project was so popular in Shenzhen, and we thought it would be sold for CNY 5 billion, but actually, it is selling way better than that. The land price was only CNY 10,000, and now it is being sold at CNY 30,000. In Longgang, CNY 17,000, and we think that can be sold at CNY 50,000. So quite high profit. We have a lot of things that can make the government feel like they want to work with us. In terms of property management business, it used to be small. Our property management business, actually, we do not accept the properties of outside. Why so?
It's because we don't feel that we are very strong yet, and we have changed leaders quite a few times. This year, we will start doing acquisitions and accepting other people's properties. Last year, we had about CNY 2 billion, and we hope that next year can achieve CNY 3 billion. By 2021, we can achieve CNY 4 billion- CNY 5 billion.
We hope by 2021, it can be listed. For hotels, again, hotel is quite complicated. We have about 20 - 30 hotels with 7,000 - 8,000 rooms, and we also have some big hotels under construction at the moment. In the next three to five years, we will have about 30 - 40 hotels being completed. This year's performance is CNY 2.4 billion, and we hope that next year exceeding CNY 3 billion, the year after that, CNY 4 billion. So, 35% EBITDA, that would also be quite high.
We also have some other assets. When we list, the EBITDA will be about CNY 2 billion. Our hotel asset is of great volume, and it is also growing at a fast speed. In addition, for our hotel business, this is a heavy asset. Two years ago, we worked with Xilaiwu on a light asset hotel program. This light asset hotel program is doing well. In one year, they have signed 55 rooms, and we hope that this year we can sign 100 rooms, and next year, perhaps 150 - 200 rooms. We hope that by the time we list, we can have about 300 - 400 rooms signed. This is light asset. We don't need to make investment. Some of which are not only in mainland China, but also in Southeast Asia.
Light asset for hotels, will they be listed at the same time as the heavy asset? Not sure. They have high PE, perhaps 50 times. We might also go and list in the United States. I don't know. Some of the investment banks are also giving us ideas in the next three years in terms of light asset, heavy asset. I think that there is a high probability that they will be spun off and listed, which means that it will have a positive impact on the total asset of the parent company. Do we still have any other further questions? Well, thank you very much. This concludes today's meeting, and thank you very much for your constant support for Shimao Properties. Thank you very much.