Dear investors and analysts, good afternoon. This is CR Land 2021 Annual Results P resentation. Thank you very much for your time for joining us on this results announcement. Because of COVID-19, it's a pity that we cannot meet you face to face. Please allow me to introduce the management to you first. They are Mr. Li Xin, the President, Mr. Zhang Dawei, CEO, Mr. Xie Ji, Chief Strategic Officer, Mr. Guo Shiqing, CFO. There will be two parts in the presentation. First, the management will walk you through the business performance. After that, we will take questions from our investors and analysts. Those who are online, please feel free to raise the questions, and please press zero star one to raise the question. If you're online, please enter your questions in the chat area.
Now, Mr. Guo Shiqing, our CFO, will walk you through the business performance first.
Dear investors and analysts, good afternoon. Let me take this opportunity and share with you our 2021 annual results of our performance. There will be five parts in my presentation. Business highlights, financial overview, business overview, land bank, and the prospects. First of all, let me share with you from three directions of our business performance of the scale, profit, and the shareholders' return, financial strength. As of the end of the year, our overall turnover increased by 18.1%, reaching RMB 212.1 billion. Leasing increased by 36.3%, reaching RMB 17.4 billion. We realized high quality sizable growth. Meanwhile, we also promote a refined management. Through efficiency and cost control, we also increased our profitability.
The net profit attributable to shareholders increased to RMB 32.4 billion by 8.7%. The core net profit also increased by 10.2%, reaching RMB 26.6 billion. The core net profit margin 37%. The dividend payout ratio will be HKD 1.692 per share, and increased by 14.3%. Therefore, we hit our target and realized our promise to the market. In order to stabilize and to support and stabilize the growth of the company, in 2021, our weighted financing cost was at 3.71%, reaching the lowest point in the past five years. This represent a 37 basis points drop. The net debt ratio decreased by 2.9%, reaching 30.4%.
Our total balance in cash and cash equivalents was RMB 108.7 billion. Now let's look at the financials. In the last year, in our key business segments, we realized a 17% of growth in the development sales develop business. The operating fixed assets revenue also increased by 36.3%, continuous growing year- by- year. We are better at fighting against the risks. In terms of our gross margin, because of the change from the settled product structure changes, as well as the stock drop provisions, the gross margin dropped to 23.7%, including hotels and other business sector. In terms of operating fixed assets, the gross margin raised to 68.2% . The overall gross margin was 27%.
Meanwhile, in the company, we realized a 43% growth of profit margin from our non-consolidated projects, bring along to RMB 32.4 billion of the net profit attributable to shareholders. The core net profit also increased by 10.2%, reaching RMB 26.6 billion. We maintain a very stable dividend payout ratio. Now let's look at our different business segments. The Development and Sales business also bring along the revenue growth. In the Development and Sales business, our settled revenue was RMB 183.9 billion, increased by 17%. The settled area also increased by 41.5%. Average settled unit price was RMB 12,453 per sq m. Tier 1, Tier 2 cities accounted for 80% in total settled earnings.
The unit cost per sq m also dropped by 11%. Now let's look at our business logic and values. Value dimension one, we take the shopping centers as the core operating recurring business and our profitability and stability, as well as the risk fighting capability further enhanced. In last year, we realized a 36.3% growth in the operating non-fixed asset earnings, reaching RMB 17.44 billion, in which shopping malls realized 80% of our growth. Along with the strong growth in the shopping mall business, our this strength will continue. The office buildings and the hotels are also an important part for us. In 2021, operating revenue accounted for 11% and 9%, and the total amount reaching RMB 3.5 billion.
In 2021, for the first time, we realized the leasing revenue fully covered the interest expenses and dividend payout. This is the first time that we covered all these expenses. Dimension two, the high quality for operating fixed assets business bring along the increasing of a fair value. As of the end of last year, compared with relatively speaking conservative valuation of our assets, the first time that we exceeded the fair value of RMB 200 billion, in which 77% goes to shopping malls and office buildings is 16%. For the completed and under construction properties, the fair value accounts for 76% and 24%.
In terms of the revenue, the retailing growth as well as the leasing rate and leasing levels, the realized value of the investment property realized at RMB 7.8 billion. Dimension three, the operating fixed assets value can also be further released by the asset securitization. In the year, we issued three CMBS in Huarun, China Resources Building, Chongqing MixC City, and Shanghai MixC City, amounting to RMB 12.5 billion. With this leasing, provided greater support to the business growth. This is also a very positive try in terms of asset securitization. Our asset liability maintained very stable. Currently, our cash and cash equivalents increased by 21.6%, reaching RMB 108.7 billion, and liability increased 13%.
EBITDA and interest coverage multiples maintained at 6.4 x. Under three red lines, we maintained the green category and the three rating organizations maintained very high ratings to us. In 2021, we also adjusted our balance sheet in order to continuously creating values to our shareholders. In 2021, after the active adjustment and optimization of our liability structure, our financing costs have dropped to 3.71%, lowest level in the past five years. RMB net liability exposure was 17.1%. Average debt term was five years, and this structure was more optimized. Now let's look at the business overview. First of all, let's look at the contract sales. In 2021, we realized RMB 315.8 billion for contract sales, increased by 11%. We hit the annual target successfully.
The equity contract sales was RMB 216 billion, up 16%. Equity increased by 3 percentage points, reaching 68%. In Tier 2 cities, the proportion of contract sales increased, and therefore there was a slight drop as compared to 2022. The average contract sales price was RMB 18,000 per sq m. In terms of our shopping malls, the business cost, that is the two fees, was also obviously controlled, and our gross margin increased by 2.2 percentage points to 74.1%. The total leasing revenue from the shopping malls increased by 38%, reaching RMB 13.9 billion. The same store growth increased by 33%.
At the same time, the EBITDA fair value increased by 6.3%. Actually, even if you take it as the fair value comparison, it shows that currently, all our property realized the growth. Just now, as I said, the asset securitization is also another very good example. We used a very little assets to kick off a larger growth in our business. Compared with others, we can use a small amount of assets to get the RMB 12.5 billion of growth. In 2021, the shopping malls, our retailing from the shopping malls increased quickly. On one hand, it is from the endogenous growth. On the other hand, it is because of the new malls. We also witnessed a very positive contribution.
In the year, the luxury and the non-luxury retailing shops enjoyed growth of 38% and 41%. With the new shopping malls, nine shopping malls opened in the year. The contribution also contributed more. The faster growth is first of all from the indigenous growth internally. On the other hand, it is because of the new stores. You can see they are both luxury and the non-luxury retailing stores enjoyed very faster growth. The contribution from the retailing and the leasing contribution also realized 8% growth, and it is 3.99%. Average operating revenue is 29%.
As of the end of the year, we have 23 office buildings projects with a total area of 1.37 million sq m, all located in T ier 1, Tier 2 cities. We also invited top 500 unicorn companies to let in. The EBITDA cost returns also increased by 1.6% reaching 9.6%. Our total leasing revenue increased by 20% reaching RMB 1.9 billion. Last year because of the COVID-19, our hotel business also maintained its resilience. Their revenue was RMB 1.6 billion, up by 43.9%. Gross margin rose by 2.7% reaching 11.1%.
The MUMIAN, which is our own self-owned brand, also increased its influence, particularly in the Chengdu Dong'an Lake MUMIAN Hotel, which is designated for the 31st Universiade site, and was opened in December last year. I believe that after the post -- the COVID-19, we can further improve the profitability of all the hotels and the ROI will also be above 70%. As for the MixC Lifestyle, being a light asset management platform, this is the first complete financial year after the listing. It overachieved its target and realized the growth both in scale and in efficiency. The total revenue was RMB 8.875 billion, up by 30.9%.
Profit attributable to shareholders was RMB 1.725 billion, up by 110.9%. Gross margin, 31.1%. For the residential property, gross margin increased to 19.3%. As of last year, the commercial property managed area increased by 16.5%. The property management area increased to 39%. We also build up synergies between different business segments in order to realize higher growth. We have already entered into the construction operations, the long-term leasing, the senior caring and film production, so on and so forth. Currently, we realized business revenue from the ecological elements sector of RMB 16.7 billion. In terms of city construction operations business, we also realized 95.4% of growth.
The long-term business also contributed RMB 300 million in revenue. Meanwhile, in different cities, we've actively participated in the city construction, the complicated stadium construction, as well as the events guaranteeing. Our services cover the Yangtze River Delta, the Greater Bay Area, Beijing-Tianjin-Hebei area. As these are for our agency construction business, as for the agency operating business, we are, for example, managing different stadiums in Shenzhen, Shanghai, and other areas. We have already finished the construction for the National Games, as well as the Paralympics, and so on and so forth.
Recently, we actively echo the call from the central government and building the long-term rental brand of YouChao apartment for our customers, so that we can actively explore the model of profit-making and innovative asset securitization channels. We also acquired the rights issuance authority qualification, so that we have built up a closed loop of asset securitization. In 2021, our long-term business leasing realized RMB 313 million, up 46%. As of last year, we are managing 30 projects and 16 in our pipeline with a total number of rooms of 35,250. At the end of the year, we plan that we will be one of the top three brands in the market in terms of long-term leasing.
Now let's look at the land bank. We stick to the prudential investment strategy and focus on the key cities by following the national strategy. In 2021, we acquired 61 pieces of land. The total cost is RMB 149 billion. Equity land price, RMB 112.6 billion. Total area of increasing in our increased land bank is 14.39 million sq m with the equity area of 11.07 million sq m. Equity area increased by 77%, covering different cities such as Hangzhou, Nanjing, Changsha, and Zhengzhou, so on and so forth. Our land structure continued to be optimized.
As of end of year, in our land bank, we have 68.73 million sq m, in which investment type of 57.78 million sq m, Tier 1, Tier 2 cities accounts for 70%. The quality is very good. Operating fixed assets, land bank accounts for 69% for shopping malls, and Tier 2, Tier 1 cities accounts for 85%. Looking to the future in 2022, our sellable resources are very high in quality, and the structure is optimal and healthy. Our total sellable resources accounts for RMB 527.8 billion. In which 90% of them are located in healthy Tier 1 or Tier 2 high-energy cities. Residential property accounts for 68%.
We will continue optimizing this structure and control the pace of our supply so that we can realize high quality of the business performance. In the future, we have a very high visibility of a stable growth in our business. As of last year, for the signed but not yet settled sellable sales type of a business, the revenue reached RMB 271.1 billion. In the next three years, the to-be-settled resources are very high so that we can maintain high business growth. We will capture the opportunities in the market for any further acquisitions so that we can realize the positive and a stable growth. In 2022, we plan to acquire 12 shopping malls. At the end of the year, we will be running 66 shopping malls.
In 2025, it will be close to 100, with a total area close to 12 million sq m. We will continue operating in Tier 1, Tier 2 and the Tier 2 cities, which accounts for 81%. In 24 cities, we have already realized one mall, one city, and multiple malls, and multiple city, multiple malls. We will continue working hard and to grow the business in the green way. In 2021, we got rewards and high ratings in our ESG. We were also selected as the Hang Seng Index Constituent Share. Meanwhile, we also successfully got five ESG loans, in total, HKD 5.9 billion. This shows the recognition of the market to our ESG job.
In 2021, we set up the carbon working group and an office. In 2022, we established our carbon strategy and actually participate into the transformation to sustainable growth. As of last year, we got certification of 347 projects with a total area of 52.8 million sq m. We're also working together with our partners to promote the sustainable value chain development. In 2021, we delivered the Yan'an Hope Town, and in total, we already delivered 13 of them. In the year, we donated about RMB 46 million. Meanwhile, we also opened our facilities for the vaccination. We helped with about 600,000 people getting vaccinated and tested about 70,000.
In the year, we also enhanced our diversification of our board. We added one more female director, and it's more diversified. Independent director accounts for one-third of our directors. Looking back the 10 years, if you look at the data, we always care about the rewarding to our shareholders and the market cap management. We are moving ahead of others and so that we can work together to further drive the increase of dividends. Attached are the specific data, and I wouldn't elaborate too much. This ends my reporting. Thank you.
Thank you, management, for your presentation. Now I would like to open the floor for questions. Again, if you want to raise a question through phone line, please identify yourself before you raise the question. In the interest of time, maximum two questions for each investor. Let's invite the first question.
Thank you. The first question is from CICC, Eric. Eric, please go ahead.
Thank you. Mr. Li, Mr. Guo, Mr. Xie, good afternoon. I'm Eric from CICC. First of all, congratulations for your very good performance in the past year. We have seen that you have been moving steadily and improving your business performance year- by- year. Last year, you gave us years ago for during the 14th Five-Year Plan and your growth, 15% growth target. Be it from the development of sales business and for other business segment, I think we have seen a lot of fluctuations in the market.
My first question for you is that at this point in time, how do you think of the target in your 14th Five-Year Plan guidance? From the point of view of hitting the target, do you see more pressure or more challenges in order to realize the goal of growth in both revenue and leasing? This is my first question. The second question is that I want to ask about land acquisition. In the market, there are some opportunities and some financial institutions also support land acquisition, be it for the land auction or acquisition for projects. How do you think about the opportunities in the market recently? And what opportunities are attractive to you? And in terms of the margin of a land acquisition, how do you think about it?
Okay, thank you. Thank you, Eric. Let me take your questions. The first question is about under such a fluctuating market, what we should do. It's true that ever since we entered into the second half last year, we saw a lot of fluctuations in the market. A lot of players are trying to sell as much as possible. The competition landscape also changed profoundly. We were facing with the unprecedented challenges ahead. Recently, from the short term, the high leverage developers had a lot of difficulties, plus the influence from COVID-19. The government's policy getting stricter and stricter. It's true that the competition of the market was influenced a great deal. In the short term, we saw great pressure of a downgrading trend. This is the background of the whole industry.
We also looked into all the factors. We also look at, in our own business, what are the shortcomings and what are the weak areas. Currently, for CR Land, we see opportunities, we also see challenges. Recently, in the market, I believe that we are faced with some new challenges and opportunities in the new phase of development. We have a strategy, and with this strategy, we are leading ahead of others in terms of development. You know, past 20 years, we have already accumulated experience. That's why we are growing well. This is because of the execution of our strategy. In the past, we had the dividends from the land market, and now this phase is drawing to the end.
Currently, we see a lot of macro control measures and the whole market is in a downward trend. However, CR Land has been sticking to our strategy without any hesitation. Residential, residential property plus leasing, these are the two wheels of our development. We have also been very prudent in our financial policy. Meanwhile, in our day-to-day operations, we always know where is our bottom line. We are long-term oriented. In the past 20 years, CR Land has been doing a very good job. We were never aggressive, and we were never pessimistic. We look into the future, and we have always been long-term oriented. In the past 20 years, through our hard efforts till now, while we have been strategically calm, we focused most of our attention into the areas under our strategy guidance.
We have already built up our own strength. For example, in terms of development sales sector, we have built up our capability of the high quality, low cost and quick turnover. CR Land have built up our differentiation and competitiveness. For the complex development of the operations, as well as the city space development, we are definitely one of the major leaders in the market. Meanwhile, after 20 years of growth, we have been very stable and realized a steady growth. We have our bottom lines clearly set, and we have built up our capability of managing our own balance sheet, as well as the financial risk control capability. All these are very important for us to realize the long-term growth. This is also our core competitiveness compared with others.
Now with the downward trend in market, and during the 14th Five-Year Plan for CR Land, in addition to meet up with the challenges and undertake the pressures. We have to be aware that there are always risks ahead. We have to be aware, to be alert. Meanwhile, we will try our best to capture the opportunities. We are aware of the trend and just do our own job well. In the 14th Five-Year Plan, we believe that we will be able to realize high quality of growth once again. During the 14th Five-Year Plan, we will focus on three areas. Number one, we will continuously stick to the long-term oriented and the economies in our strategy.
We will continue focus on the operating fixed assets, as well as the sales and development business, as well as the service sector. As for the ecology element sectors, we will look at the construction, agency construction, agency operating, long-term leasing, and the industrial property. These are the areas where we continue cultivating those key sectors in our ecosystem. We're hoping that in the 14th Five-Year Plan, we will once again realize high quality of growth. Secondly, we will stick to the quality improvement in our day-to-day operations. If you can manage well, you will definitely enjoy the benefits.
Because we do not want to define the different phases in this industry, so in the past, people talk about the land dividend and the finance dividend, but now we're talking about a management dividend. Because if you can do a better job in management, and then you will definitely be better than others. This is one fundamental requirement for us, and this is also something we have to do. We have been doing it all these 20 years. We'd never stop doing it. Now, in this downgoing trend, CR Land will focus even more on improving our own management capabilities so that we can further improve the efficiency, reducing the cost, so that we can do the investment and production well. These are two tasks for us. I hope that during the 14th Five-Year Plan, we can focus on...
We can manage our own well and get back to the very basic things like such as the product development, service delivery, and so forth. These are the core elements for us to maintain stable growth. We will continue working hard on these areas. In 2022, CR Land already did a mobilization of all departments already. This has been an integral part in our strategy. In the past two years, we did make achievements, and we feel that there's still big room for us to further improve the efficiency and the cost reduction. In the 14th plan, this will be also one of our major priorities. Only in this way can we further enhance our capability of management. This is the second part.
Thirdly, we will continue improving our efficiency throughout the organization. Facing with new opportunities in the 14th Five-Year Plan, we will continue optimizing our structure, as well as the change management in the personnel development, personnel management, compensation management, so on and so forth. In terms of motivation and the compensation, we will also focus more on how to improve, how to mobilize, how to optimize. For example, for the Tier 1 cities, how to optimize our compensation schemes for our personnel so that we can mobilize people better. In terms of the organizational efficiency, we hope that we can optimize the overall structure in the organization so that we can improve the efficiency from all aspects throughout the organization, hoping that we can realize high quality growth in the 14th Five-Year Plan.
All in all, for CR Land, we will stick to the essence of our strategy and do a better job in our three business segments. We will continue to be pragmatic and continuously improve our own internal capability. We will also stick to the bottom line of financial operations so that we can use our strength to realize a solid results and creating values to our shareholders. In short, after 20 years of growth, we have built up our own core philosophy and our own capability. We will continue to do a better job in the company and hope that we will enhance our capability and embrace new challenges in the market. This is about the first question. The second question is about investment and the M&A.
It's true that in the market, there have been a lot of big changes in the market. In the second half last year till now, we see the industry entering into adjustment period and a downward trend. This period already extended to the first half this year. From the market, from the selling end, we see that there have been about 30%-40% of a downward trend among different developers. A lot of developers are suffering from liquidity or cash flow difficulties. This is number one. Secondly, since the second half last year, we see a lot of government policies trying to control and adjust this policy. This represent a great pressure. I don't have to elaborate that. You must know about the pressure. These policies also influenced the developers as well as the consumers.
The whole market, from the developer's point of view, cash flow represented a very big challenge under pressure. Therefore, from an investment point of view, two aspects. Number one, the government's supply of land is very eager. Actually, the government is very eager supplying more land to the market, and the government hopes that through land supply, they can generate more demands. Meanwhile, in the market, there have been a lot of opportunities on M&A in the market. A lot of developers are adjusting the assets and selling the asset. There are some very good project targets available in the market. I think in all, this may represent a very good investment opportunity.
However, if you look at first quarter, if you look at from the secondary market in land auction sector. All developers are actually very rational, very cool-headed when they make any investment decisions. They look at the true demand, they look at ROI, they look at the original strategic deployments before they make any decision of acquiring any land. Including the M&A market, there are a lot of targets, but if you look at the total transactions, there's only a limited number of transactions. This is about the background of the market. As for China Resources Land, we have to walk with two legs, right? The one is about the secondary market. The CR Land has been taking secondary market as a major channel of resource acquisition.
This is also part of our strategy for our investment, particularly by focusing on those key areas under our strategic planning, those key cities. To put it in other words, the Tier 1 and the Tier 2 cities. Meanwhile, in those cities, we will select some good targets with good organization capability and higher returns. This is about the secondary market and the auction of land. I think this year there will be a lot of opportunities for us to choose. In the past, when the market was very good, we weren't aggressive. Now the market is very flat, we will not be aggressive either. We have more opportunities, more options, and we have more time to make the right decision.
As for the acquisition market, we also keep a very close eye on it. We take it very seriously because it's also a very good channel for us to access very good resources. Looking at the secondary market and the auction market, the price may not be higher than the land we acquired through acquisition through M&A. For each project in the M&A market, we will stick to marketization approach and risk ROI principle. We also look at the risk control as well as original deployment so that we select the right targets to acquire. Basically, we will not consider those at the equity-based M&A. We do not think it is a very important choice for us. As for the ROI, around 12%.
Of course, it depends on different markets and around 12% for ROI. Of course, it can be flexible. Generally speaking, this is the overall picture. In 2022, our total investment strategy will continue to be prudent. We will not be aggressive. Thank you.
Okay. Thank you. Thank you, Mr. Xin.
Thank you, management. Next question, please.
Thank you. Next question is from UBS, John. John, please go ahead.
Thank you. I'm John from UBS. I have a couple of questions, two questions for you. First, recently, we have seen that, Vice Premier Liu He said that we will have a new model of, property development. Can you please explain what do you think about it? Do you think that, it will influence your strategy in the future? This is number one. Number two, last year, you talked about the, option plan, and, just want to know if there's any update. Do you have any timetable for option plan? Thank you.
Okay. Thank you, John. First of all, let me answer your question regarding option plan. During the 14th Five-Year Plan, CR Land has been changing our composition plan, composition scheme. This is a very important task for us.
Our overall direction is that we hope to change the composition scheme in order to motivate our people well, so that they can make more money if they perform better. Their income level will also be closer to that in Tier 1 cities. This is the major direction. Under this direction, we hope to build up a long-term, midterm, and a short-term plans. As for option plan, it's something about long-term plan. Currently, we're still discussing about it. We may still need some time to finalize this plan so that we can submit it to relevant departments for further discussion. We hope that we can have an option plan to our staff. We hope that to some extent, we can motivate them well through this plan.
This is our good wish, and whether or not it'll be true, we still need to work out on it. Overall, during the 14th Five-Year Plan, in terms of compensation and motivation, I think as a general direction, it will be linked to the performance. It will be performance-based compensation and motivation. Through the motivation, we hope that we can further motivate people's their morale. I think this is something that we can do. You also asked about the new business, the new model of real estate. Actually, we don't have any specific definition about it. If I remember correctly, so it was put forward by the government during the government's working plan at the two conferences period.
Personally, I think this, the new real estate development model, it is still under the phase of a discussion and a definition. Personally, I have not heard any clear definition about it. I talked about it with peers. It is still under discussion, but basically some points can be of reference to you. First, the so-called new development mode is in comparison to the old development mode, right? By the old development mode, in my understanding, the property, particularly the residential property, is the quick turnover plus high leverage. That is the higher liability. That is the old model, or the main part of the old model. Compared with this old model, now we talk about the new model. New model does not stress on high growth speed or high leverage or high liability. This is number one.
Number two, it's true that after two-three years of adjustment in the industry, we have seen profound changes. We have to look into these changes very carefully, because I think that they will be of great significance to the new model. These changes, in my understanding, covers three areas. I think this is also agreed by most people in the industry. Number one, the whole real estate has already changed from the quantity based to quality based. That is, in the past, people pursued a large quantity or the size, but now we are focusing more on the quality based growth, particularly from the indigenous growth. Number two. In the past, we focused on the new projects, but now we are competing on the existing projects.
Number three, China's real estate industry will shift from the property-based to industry-based. In the past, we focused on too much on the residential part. For example, how many, how much land you got, how many apartment buildings you built. Now I think it has changed. It will be more diversified, not only residential, but other purpose to buildings. These are the three major changes, and we are now seriously considering and discussing what is this new model, what is the definition of this new model. I think ultimately, we will find a sustainable or something suitable to China's basic situation. I think that will be our new business the new model. But as for the definition now, I don't know the definition now.
I can only share with you what are some of my thoughts on this, some changes that we have seen. One thing for sure is that regarding the definition, it will be more diversified and it will be more, business segment based. In the new development phase, as Eric asked just now, I think his question is related to yours, so whether we will change our strategy. We will stick to the city space developer and service provider, and we'll focus on the Development and Sales business, as well as our operating fixed assets projects and the quality element business, so that we can give full play to our core competitiveness. Safety operation will be our bottom line. We have to realize high quality of our growth.
This is our roadmap for us in the 14th Five-Year Plan. During the 13th Five-Year Plan, we realized diversified and the multiple business segments based business growth. We also build up our core competitiveness in each business segment. These strength will support us to realize high quality growth during the 14th Five-Year Plan. This is something that we have a great confidence in. Thank you.
Thank you.
Thank you, management. Next question, please.
Thank you. Next question is from Griffin of Citi, Citibank.
Thank you. I'm Griffin from Citi. Good afternoon, management. I have two questions. The first one is about the management goals. In 2022, cost reduction and efficiency improvement has been your theme. Can you please share with us what are your overview on it?
For example, reducing the waste internally and then improve your efficiency. The second question is that I noticed that Mr. Li are conducting their due diligence in different cities. I just want to understand what do you feel about it? How do you think about the impact from COVID-19 and from policy point of view, from the finance point of view or sales point of view, what do you think about it? Number three. Three questions. The third question is about just now talk about or I heard about your sellable resources for 2018. Do you have any target for this year? Thank you.
Thank you. Thank you, Griffin. Our CEO will take the first question, and I may add the second question. I will answer the second question, and the third question will be taken by our CFO, Mr. Guo Shiqing.
Thank you for your questions. Your first question is about our management goals. As our president said, during the 14th Five-Year Plan, our management goals will be basically focused on the two key strategic priorities. Just now our president already shared about these priorities in terms of investment, what measures we're going to take, and what about the refined production and operations and so forth. For the refined system is for the sake of efficiency improvement and cost reduction, so that we can further enhance our driving factors in order to realize the higher efficiency, higher quality, higher level and higher returns.
That we can ultimately improve our overall performance in terms of our operations. In terms of our returns, our call is about the management of each projects throughout the chain, throughout the life cycle. In this way, we can improve the ROI, the quality, as well as the consistency between the input, output, particularly in terms of risk management and the marketing expenses and the sales expenses and so forth. For example, in 2021, we identified dynamically different risks in total of 117 risks in 11 areas. Through the all life cycle management and through the back play and examination, we mitigated those risks. Secondly, about efficiency improvement, particularly in terms of project development and operations.
The project development is about, first of all, opening for sales. In the past, our speed was not very high. It took about one month before we opened a project for sales. Now we are working to improve this efficiency. Secondly, in terms of a planned delivery. We also shorten this lead time by 2.6 months. In terms of improving the overall construction process, the industrialization into the construction, we realized that the overall lead time was reduced by 2.6 months. Another dimension is about the application of digitalized measures. We set up the internal system through digitalization. Now we are one of the leaders in the market in terms of digitalization. The third area is about the quality improvement, particularly in terms of product presentation.
We have been known of having the culture of high quality. We made a press conference on the high quality corporate culture in Beijing, and later we delivered some high-quality projects successfully to the market and won very high recognition from the market and customers. Now the market and customers are changing during the 14th Five-Year Plan. We already put it forward once again that the product presentation will be our core competitiveness. Since last year, we, through the reshaping of our products, built up 34 high-quality product benchmark projects. In different cities, we select one or two projects to be the benchmark projects in order to reshape the high quality of our business. Those benchmark projects will be the demonstrations of our high-quality products in those cities.
We have built up such values and corporate culture for regarding of high quality. Now fourthly, in terms of capacity building. We continuously improve our organizational capacity. Last year, through different measures, we keep improving our capability of organizing differently our day-to-day operations through organizational change. We also help people, particularly those key position holders, to keep improving their own competence. I hope I have answered your questions. Thank you.
Let me add something to Griffin's task about optimizing the current stock and reducing waste and avoiding involution. Looking at the environment and by understanding our own strength and weakness, we...
In 2022, our management goals will be continuously to be the efficiency improvement, cost reduction by way of optimizing existing assets and increasing on more high-quality assets. By optimizing the existing assets, just as you heard, we will continue enhancing our own fundamentals and improve our own capacity. Through improving the capacity of everyone in the organization, we can deliver a better job in efficiency improvement and cost reduction. For example, in terms of a residential property, we acquire land, we build, and then we begin to sell, as well as the cash collections and so forth. For each phase of a project, we optimize all the details in order to further improve the efficiency. We have some pipeline projects as well.
We also work out KPIs for all those projects so that we can set a margin and improve our efficiency. For the KPIs, for all the existing shopping malls, you can see we have a set of KPIs as well. This is for the existing assets. We will further enhance our capability, and we have the set of KPIs. As for the incremental part, it is in comparison with the existing assets. What is the incremental part? Our definition and understanding is that for the newly added projects, be it from the secondary market, from the secondary market or through the M&A, we must buy the right projects, not the expensive ones. We must have the right ROI from the acquisition, and the ROI cannot be low.
Because we have more targets to choose, you must stick to your principle in any M&A. For those incremental part, we must make sure that these projects can contribute to our land bank or to our total assets. In the past, we focused a lot on development projects, and this year, we will focus not only on the development projects, but also the agency construction, so in different cities, as well as in agents and operating services, the city innovation services, so on and so forth. They all need to be implemented and executed at the city company level. I think this is about the incremental part.
For sure, one thing I can tell you is that CR Land takes the agency construction and the city operating business as one of our key new business for us to keep promoting them. The long-term rental business is also a new part. We will continue cultivating this business. In the future, they will be implemented and executed at the city company level. This is what we mean by optimizing the existing assets and having high-quality incrementals. We will also further flatten our organization structure and improve the corporate efficiency, be it at the corporate level, at the headquarters level, or the regional level. We will reduce the bureaucracy. We will further empower the frontline.
I wouldn't elaborate too much on the specific measures, and they are coming very soon, and we are firm about them. In the past 20 years, the real estate industry had realized a faster growth period, and there were a lot of wastes, and waste of resources, waste of money, and just for the sake of a quick development. People wouldn't care that much, but now the market is different, the whole industry is different. From the management point of view, we have to avoid those risks. For example, the management fee. Even if it is a small amount, for example, afternoon tea. If you accumulate all the afternoon teas in a year, it will be about several hundreds of a thousand yuan.
We have to save those money because they don't create any value. We have to save them. Including some other usages of our resources. In the past, we used too much resources meaninglessly. In the future, we will help cut on those unnecessary spends and save money in order to reduce the wastes. We are a very big company. If you do it bit by bit, this can be a very big figure in if it is reflected in our balance sheet, and then it will be a part of our profit. We have to stick to our tradition, a very good tradition of reducing waste and reducing the pollution.
This is a concept for us in the long term in our management.
This is about your first question. Thank you, Griffin, for your continued support to choose CR Land. In our different regions, I visited different regions and did some due diligence in-depth research. It's true that last year in the industry, because of the control policies from the government, we see the influence is still lingering. Even though the policies are getting deregulated a bit. However, from the whole industry's point of view, I don't see much deregulation. Some very well-known companies with high credibility, be it a SOE company or private company. The financing policy is deregulated, some, to some extent to them. Particularly in the market, I think we have not seen a very big recovery of people's confidence.
It is recovering, but not recovering to that much. At policy level, I have not seen any very clear signal about a very big deregulation. In Tier 1 to Tier 2 cities, we have seen some signals of a deregulation. This is the conclusion I can draw. In the Tier 1, Tier 2 cities, the signals are clear. From the secondhand sales to the firsthand new sales as well as secondhand sales, we have seen a recovery of the market, very clear signals about that. But for the Tier 3, Tier 4 cities, it's not that clear. This is the fact.
Recently, there have been outbreaks in China of COVID-19, and still a very big influence to some developers in some projects, particularly the shopping malls. If you look at our data, in January to the 28th of March, our data shows that we had an 8% Y-o-Y increase. Therefore, the influence to us is under control. I know this is the pattern. The COVID-19 influence, after it is opened, usually there will be an explosive type of a recovery very quickly. In 2021, we already saw that. In addition, after my research, I feel that in the market we know that we have cycles and the policy has already hit the bottom. For Tier 1, Tier 2 cities are recovering. The Tier 1 city is actually very, very heated.
In some projects, we opened for sales in Tier 1 city. We just sold out all the resources right away within the day. The consumer's confidence is also recovering very quickly. Overall, it still may need some time. As for the investment part, in different cities, the land supply is also different. Because of the COVID-19, in some cities, the land supply plan is also under adjustment. It's true that the land in the land market, it is less competitive. We have more options. As you stick to your principle, you have more opportunities or more likelihood to get the land you want. We also see pressure in the sales. Sometimes, you have to sacrifice your price in order to get a high volume. I have seen some other adjustments from other developers.
The gross margin, they say the gross margin will be something around 20%. This is also what I think about it. In 2017, 2018, 2019, land prices were high. In turn, after 2022, the land will be released. Therefore, the gross margin will be maintained around or above 20%. Basically, that is the overall picture.
Your third question. Mr. Guo will take your third question.
Okay, let me answer your question briefly. From the KPIs. First of all, it is true that the Development and Sales business in the market is recovering. Last year was RMB 315.8 billion. This year, based on this, we must realize the growth. We have to get more market share. Now, depending on the market situation, but we adjust accordingly. As for the shopping malls, currently, our revenue growth will be around 20%. Considering all those sold but not yet settled projects, our core net profit, the goal will be at double-digit growth. Thank you.
Thank you, management. Next question, please.
Thank you. Next question is from Merrill Lynch, Bank of America, Carol. Carol, please go ahead.
Thank you. The two follow-up questions. The first one about development business. What's the gross margin? For those that are sold but not yet settled, what is the gross margin for that part? Secondly, for the T ier 1, Tier 2 cities you have deployed. There are less projects under construction. Last year, a lot of city investment companies bought land, but not yet started construction. Do you see it may be in some cities and there will be a tighter supply in the future? How do you think about it? Thank you.
The gross margin question, I already answered that question partially. Development business, it is a phenomenon throughout the industry. In 2017, 2018, and 2019, particularly in 2017, 2018, the land market was very, very heated and prices very, very high.
At that time, people's estimation or people's expectation of the market was very high. That's why land price was very high. This would influence the gross margin for 2022. Definitely, it will. It will be around 20% throughout the industry. We will continue enhancing our own capability so that we can further reduce the cost and improve efficiency so that we can maintain our gross margin at or above 23%. This is our direction, and there's high chance for us to hit this target. We also hope that through capturing the very good investment opportunities, we can also bring along some high gross margin projects. That we can make our gross margin after 2022 even higher.
For CR Land, our overall gross margin is hoped to be 25% or above so that we can be a leader in the market. For this KPI, our management has confidence of hitting this target. As for the construction projects and demands in Tier 1, Tier 2 city, basically, I agree to what you said. There are less projects under construction, but the demands are still there. In the future, the demand, we will see even stronger demands in the market. In Tier 1 and high-end Tier 2 cities, I believe this will be the situation. In the core Tier 2 cities, our development pace is not changed. We are following our existing schedule in our project development and our supply.
Thank you.
Thank you, management. Next question, please.
Thank you. Next question is from DBS, Shen Liang.
Good afternoon. I'm Shen Liang from DBS. Two questions from the for the management. The first one is renovation projects. In addition to the secondary market, land acquisition and from the acquisition market, renovation projects is also one of your strengths. In the Greater Bay Area, there are a lot of renovation projects in the Greater Bay Area. So there are some players who are very strong or who are very competitive in the renovation area, but yet there are some. May I ask that in this market segment, do you see any room for you to have a role in terms of renovation projects in cities? Do you see more opportunities in this sector? Do you think that it will be helpful to improve your gross margin and your profit performance in the future? My second question is about COVID-19.
Do you think the recent outbreaks of COVID-19 influenced your sales of buildings? The people feel that compared with beginning of 2020, the influence will be even long-lasting and bigger. What's your take on this for the lockdown, and do you think the lockdown has influenced your rental income or rental revenue from shopping malls? What about the subsidies to the tenants and any subsidies from the government? What are the arrangements? Thank you.
Thank you for your questions. About the renovation projects, our Chief Strategic Officer will take it. Let me answer your COVID-19 question, as well as the leasing revenue and the outlook. Just now, I already mentioned some parts when I answered other questions. It's true that there has been influence from COVID-19 to our shopping malls and revenue.
As for how big this influence is, personally, I feel that compared with 2020, the influence is a little bit bigger, but it is less intensive. That is to say the influence may not be as strong as that in 2020. The government is more experienced in fighting against the COVID-19. Definitely, the government is more mature than 2020. If you look at Shenzhen, in the darkest moment, it was just one or two weeks only, and then the pandemic is over. All the shopping malls each shopping mall just opened once again and all the tenants began to do their business. In terms of time, it is not a long period. From January 1st to March 28th, we realized 8% of a growth Y-o-Y.
Compared with the same month, it's the same level of growth. In the future, as for the support to the tenants, I think in terms of the leasing, we have to analyze, we have to conduct technical analysis first before we cause any subsidy to the tenants. We hope to realize long-term win-win. When COVID-19 came in 2020, we adopted some measures. We take some actions, and we actually prepared the impairment of about RMB 700 million. We provided support to tenants, particularly those small merchants. We retained them, and we built up a very good win-win situation between the shopping mall and the tenants. We also increased the customers' trust on us or loyalty to us.
All the tenants are working very hard and the business was recovered very quickly. Comparing with the same period last year or the same month last year, we saw the obvious improvement. This is our experience we learned in 2020. This year, the influence, yes, there is, but limited. We still have a very, our expectation on the revenue growth, won't change. Thank you.
About renovation. Just as you said, on the one hand, the overall industrial landscape is changing. Based on our existing, for example, in some existing players, they have some projects in hand. In the future, particularly in South China, in Guangzhou, Foshan, and Dongguan, we see a lot of players but the overall landscape is changing. Some players already left this industry, left the market.
That's why for us it is an opportunity. On the other hand, from the government point of view, the Housing Ministry issued new policy and encouraging renovation projects in cities. Of course, it depends on different situation in different cities. There may be different projects of a renovation. They all represent opportunities for CR Land. We will actively explore such opportunities. We are a SOE, and we have been operating in different cities for many years. We have a very strong capability in financing, construction, and service delivery. Therefore, for us, while the market is changing, as well as the new policies are coming, we think that we are more competitive to get more projects in this sector. From 2021 to the beginning of this year, there have been some major projects that we won bidding.
In Longyuan project in Shenzhen, Humen project in Dongguan, and Daojiao project in Dongguan. In Zhongming-Xiang , there's another project, so on and so forth. We have already made some achievements in those renovation projects. Even though there are changes in the market, we can still give a full play to our own strength and capture the opportunity in the market.
Okay, thank you. Let me add something. It's about M&A opportunities. It's true that in the Greater Bay Area, particularly in Shenzhen and Dongguan, we are discussing about several targets for possible acquisitions. We're following the principle of risks under control and the high ROI, so on and so forth.
You know, we have a criteria and we also consider about the criteria for conversion, if they can meet up our requirements, and then we will look into those projects or those targets more carefully. Now, hopefully that we can realize some M&As this year. Thank you.
Thank you, management. For the interest of time, we will invite the last question. The last question, please.
Thank you. The last question is Chen Zhong from CICC. Chen Zhong, go ahead, please.
Okay, thank you, management. I have two questions to ask. The first one, the management talked about reducing some third-party resource usage. Can you give us some examples, specifically in addition to afternoon tea? So anything similar to that, will the developers do them by themselves or are going to change your suppliers or going to cancel some unnecessary parts?
The second question is about the land acquisition in a cooperative way. Because currently, this cooperative land acquisition is getting less. How do you think about this equity-based land acquisition? Do you think that there will be less cooperation in land acquisition? Thank you.
Thank you, Mr. Chen, for your questions. I'm not sure whether you still have afternoon tea in your company, but as the afternoon tea, just one little example, but you can see from one leaf, you can see a forest. If it is something that does not create value, then it is a waste. For the real estate industry, it is something that worth your attention, and you have to review and reflect on it. For China Resources, definitely, we have to stick to the principle of keeping plain life and working hard for better life.
Because this is a difficult period of time for the industry. As for the cooperative land acquisition, I will take this part, and Mr. Zhang Dawei will take your third question. The cooperative land acquisition, we do not exclude all. Actually, we still accept this cooperative model of land acquisition. But the financial investment will be our first operation. That is, we'll be a financial investment instead of doing it by ourselves. This is our logic of land acquisition, and we have built such relations with several capital owners, which are very strong. We have a dedicated investment platform for that as well. See our land. We can have equity of 50% or even 67% in order to attract good capital into the platform and do projects together. This is the one way we consider.
The second one is about cooperation between peers. For some land, the price is very high, the total amount is very high, and the safety level is also high, then we may consider to cooperate with other developers. In general, during the 14th Five-Year Plan, we will take this equity proportion very seriously. We have to control it between 65%-75%. That we can manage our equity well, because we do care about equity very much.
Okay, thank you.
Thank you for your question, Mr. Chen. Talking about the third-party fees, in my understanding, it's about several aspects. First of all, we have engaged a lot of consultants, more often for marketing consultants and the channel consultants and the sales consultants. And also consultants for designing as well, different types of consultants.
For marketing consultants, this cost is a big part in the total pie. This is also industrial phenomenon for CR Land. We hope to build up our own market capability, as well as the channel building capability so that we do not have to rely on external channels all the time. We have to reduce this proportion. We did try a lot last year, and the proportion of external channel reduced by 20% and the internal channel increased by 10%. In this way, we didn't have to engage a lot of third-party consultants. From another dimension, we have other consultants category as well. In the past one or two years, we did take some measures. For example, for something that we can do by ourselves, we will definitely do it by ourselves.
For some consultants, we have the contractors, they have the subcontractors as well. We changed the way we cooperate with them. For some projects, we go to the subcontractors directly. For example, for some consultants, for the informatization consultants, for example. We have done a lot. We will continue reducing such expenses regarding the engagements of consultants in order to reduce the cost further. Thank you.
Thank you, management. This is the end of our annual results announcement. Once again, thank you very much for your time joining this results announcement. Please feel free to contact the IR department of CR Land. Hope the pandemic is over very soon. Wish you a great day and great health. Thank you.