2021 interim results conference of Country Garden Holdings Company Limited. Today's meeting will be conducted through live video webcast and teleconference. You can view the presentation slides simultaneously through the live video webcast. First of all, let me introduce to you the management who attended the presentation today, Mr. Mo Bin, President and Executive Director. Mr. Cheng Guangyu , Executive Vice President. Ms. Wu Bijun, CFO and Vice President. In today's agenda, Mr. Mo will first walk us through the 2021 interim results of the company and future prospects. There will be a Q&A session, and media are welcome to ask questions. Mr. Mo, please.
Good afternoon, investors. Welcome to Country Garden's 2021 interim results presentation. This year is the 100th year anniversary of CCP. We have achieved the first 100th year target, so to build a moderately wealthy economy. We are a growing enterprise during the period.
This year, the central government emphasized that housing is for inhabitation, not speculation. They want to stabilize price and expectations in the market so that there will be healthy development. Country Garden faced up to this large trend of reform. We would like to build housing affordable to members of the public. Overall speaking, we have entered a new stage. Given the current situation, we will continue to be customer-oriented and continue to work hard. We will make sure that we can also improve our overall competitiveness. We believe that new products and services can lay a strong foundation for virtuous development. Word of mouth is most important, and we are long-term in our orientation, so operating efficiency is very important, leading to high organization efficiency.
We attach importance to high construction quality, digital technology. Through smart production and informatization, we can enhance safety standards and safety management. We listen to the appeal of the 14th Five-Year Plan so that there will be county-based urbanization. We would like to make ourselves stronger and better. In the new era, Country Garden will follow the steps of market development to develop robotics, modern agriculture, and other high-tech industries. We will use technology to service people. We will try hard to build good living, high-tech, and also consolidated enterprises for society. On behalf of the management, I would like to do a review of our results, operations, and also outlook. First of all, for this year interim results, let me give a brief explanation.
In the first half, together with JVs and associates, attributable contracted sales was around RMB 30.3 billion, or actually RMB 303 billion, up 13.5% year-on-year. Attributable cash collection, RMB 272 billion. For six consecutive years, we are over 90% in terms of attributable cash collection rate. In this half a year is still 90%. We are in the 139th position in Fortune 500. For five consecutive years, our ranking goes up, and this shows our consistent growth and our strength. As of the end of first half, we have revenue RMB 234.9 billion, up 27% year-on-year. Gross profit was RMB 46.3 billion, up 3.1% year-on-year. Net profit, around RMB 22.4 billion, up 2.3% year-on-year. For the company, we have 31% dividend payout. For interim dividend, RMB 0.2098. Our financials are very sound.
In fact, our financials are further enhanced. Net gearing ratio at the period end, 49.7%, down 5.9 percentage points since the end of 2020. Total debt was 324.2 billion RMB, down from the end of last year. Borrowing cost was 5.39%, dropped by 17 basis points since the end of last year. We have sound financials, we are able to face up to ever-changing market conditions. Within the period, we continued to control costs effectively. In the first half, SG&A in a consolidated way accounted for 5.9% of revenue, down by 1.4 percentage point year-on-year. Let me talk about our major operations in the first half of the year. For our property sales, it was leading in the industry. In the first half this year, together with JVs and affiliates, attributable contracted sales amounted to 303 billion RMB, up 3.5% year-on-year.
Attributable GFA, 34.51 million square meters, up 8.4% year-on-year. In terms of our urbanization, comparing with advanced countries in the world, there is still a gap. Urbanization still sees a lot of potential. This year, if you look at our sales growthIt is positively related to urbanization rates of our country. In the future, there's still big room for development. According to some statistics, from 2016-2020, proportion of property sales in Tier 3 and 4 cities rose from 43%-49%. For Tier 3 and 4 cities, city resilience is even more obvious and stronger. There is a long-term support for the property market for a long time. During 2016-2020, our attributable contracted sales increased a CAGR of 25%. We continue to have diversified sales channel, and we built an online sales team. With technology, we can enhance our sales.
With competition being very intense, our sales is still very resilient. For many years, we are in a leading position in the industry. In order to go better and deeper, we want to dig deep into the personal market. We focus on our management refinement, and for newly acquired projects and various indicators, there is a lot of improvement. For commenced projects, there is an enhancement of 1% in terms of turnover. We're up 3% in average annualized rates of return for prospects, and we are up to 97% in proportion of projects with rate of return over 25%, and we are 36 days in advance in terms of average time of pre-sale launch period. Interest-bearing debts are coming down. As of the end of June, total debts came down to 324.4%.
5.39% is the borrowing cost, down 17 basis points since the end of last year. We have adequate cash. As of the end of June, cash balance amounted to RMB 186.24 billion. We have good liquidity, a guarantee. In the future, we will make sure that cash flow is adequate and in pace with the market, we can face up to all the opportunities and challenge. With these good operations and stable financials, we are being recognized by rating agencies. As of now, for Moody's, we have Baa3, which is a stable outlook. For S&P, positive outlook. These are very good ratings. With enhancement in credit rating, our borrowing cost can come down and our financing structure is also enhanced. For debt maturing within one year, down to 27% share of the total. We are now in very healthy position.
Net gearing ratio and to cash, the ratios are very good. From 2010 at the end, it's 80% down to 77% now. We are confident that before 2023 interim period, we are able to achieve further adjustments. Our financials are stable. At the same time, our profitability stabilized, giving us a promising future. In the first half, gross profit was RMB 46.3 billion, up 3.1% year-on-year. Net profit around RMB 22.4 billion, up 2.3% year-on-year. Net profit margin, 9.5%. Core net profit attributable to owners of company was RMB 15.2 billion, up 4.2% year-on-year. This year, our group continued to enhance our cost control. In the first half, SG&A accounted for 5.9% of revenue, down 1.4 percentage points. Its share of attributable sales, 4.6%. Comparing with 2020, down 0.4 percentage point. Total expenses, RMB 13.9 billion. Our cost control effects are very obvious.
Looking into the future, we will continue our stable operation and we will enhance our core competitiveness. In terms of regional breakdown, our projects are in all provinces in China. In other words, we have full coverage of the market. As of end of June 2021, we are in 31 provinces in China, 296 municipal administrative regions, 1,408 districts or counties, and there are altogether 3,127 projects. In China, the room for urbanization is still broad. We will tie in our work with urbanization effort of the country. We adhere to prudent investment, and also turnover of our investment, and we have balanced distribution in all tier cities in order to ride out future uncertainty. In the first half of the year, there are 219 parcels of land acquired, attributable value RMB 88.4 billion, equivalent to RMB 270 billion of attributable value, and then attributable ratio 85%.
82% of land reserve is in the main five regions, 65% Tier 3, 4 cities. 84% in Tier 3, 4 cities. In the first half of the year, out of the land supply, we have acquired 14 parcels of land, attributable value RMB 17.1 billion in Chongqing, Zhengzhou, Wuhan, and so on. We have acquired land. Basically, average premium rate 7%. Quality of land acquired is better than the first batch of land supply in July. We have RMB 22 billion of land value. Our land reserve is very diversified. As of the end of June, in mainland China, attributable saleable resources, RMB 1.69 trillion. There is non-contracted potential attributable saleable resources, RMB 490 billion. This can support our future three years' sales demand. At the same time, for attributable saleable resources, they are well-distributed. 99% is in area with population more than 100,000.
93% in inflowing migration places. In Bohai Rim, Yangtze River Delta, and Pearl River Delta, there is also a good percentage. Our operation efficiency is much better than in 2017 and 2018 in terms of acquired projects. Turnover was higher by 5 percentage points. In terms of product launch, we expect that in the second half of the year, for newly launched attributable value, RMB 450 billion. In the second half of the year, attributable saleable, RMB 660 billion. We have enough saleable resources. We actually conduct closed loop management. For the whole year, sell-through rate will not be lower than 65%. When we develop our core property business around high-tech comprehensive business, we want to build a total industrial chain, technology empowerment, and business diversification. We are making layouts in high-tech property chain.
In terms of property development, by means of robotics, we can do smart production. We have a home decoration service so that we have a complete upstream-downstream chain. In terms of catering, we have catering robots using smart technology. For modern agriculture, we have agricultural products. There is raw material for central kitchen. Culinary robots can actually transport the products to consumers. It is a full coverage from the source to the final end. All these can interact well together among all these different segments. Based on market needs and high-tech trend, we have laid out our robotic business. We want to become a total solution provider for smart construction. Bright Dream Robotics focus on smart construction and building industrialization. Digitalization or successful commercialization of various digital products is the core.
We would like to build a full cycle system so that we can have a new construction method. Right now there are 16 styles of robots, and 13 of them can be for commercial use. For critical spare parts, there are 46 types of construction robots, which 18 of them have been commercialized, and 28 of them are in the process of validation testing. We have already achieved a zero breakthrough in many areas. For construction robots, they are now used in 14 provinces in 70 projects with more than 1 million sq m. In May, for the first time, we faced the external sector. Early in the year, there are two projects that we are awarded demonstration project from the state. We will make use of our technological advantage together with greening, safety, environmental protection, and good construction standards.
We will actually organize and plan in an overall arrangement. In this way, robotics is going to be in the core, and we are able to achieve very good results. In July, we actually are included in the state's name list, and right now we are doing a lot of construction and demolition trials. We hope that our robots can also be used in production line style production. In the future, we'll continue to dig deeper to improve our operation. In terms of our high-tech industry, culinary robots are developing fast. For 1.4 billion of people, we offer very good food. We are based on R&D. We hope that our robots can be the main carriers of our catering service, and there is equipment manufacturing, catering operation, and also a full industrial chain.
Right now, we have already successfully opened 95 robot restaurants, and there are more than 2,400 units of machines being used. We have become the first catering robot standard setter. In June this year, Qianxi Robots would be offering different services for people, especially the last 100-mile delivery. Contactless robot is also another area, so that there would be higher safety standards. For catering, we will be iterating towards smart operation. [CNC] has successfully entered high-speed station and other highly effective venues of use in more than 100 cities. High-tech is being used in catering industry. There are customized equipment and software systems, hoping to achieve smart transformation. We are working with a number of different companies, for example, Biogen and so on.
At the same time, we use the best cars to offer the most effective, most suitable products so that we can offer world-leading home solutions. This year, modern home decoration focuses on large furniture manufacturing and R&D through automation and also total solution. We can offer good price for money. Southern China, Eastern China are some of our bases. Last year, we will move from construction area to retail business segments. We expect that every year there will be 10% growth to achieve sales growth. Sales for 2022 can reach RMB 8.5 billion. For 2023, more than RMB 10 billion. There would be RMB 2 billion from external revenue. We will be entering the whole furniture market. We are developing modern agriculture, covering whole industrial chain. We will be modern agricultural system solutions and services provider. We sped up our R&D.
On production side, right now in Wuhan, we started the South Wuhan seeding project. It is driven by dual-core, and now in Greater Bay, it is building a demonstration base. High-tech is used in agriculture in the future, or in smart aqua farming. In the future, we'll continue to upgrade the overall agriculture efficiency. We'll contribute to food safety in the market. We will work with Biogen, and in this way, we can make sure that from the start to the end, we can offer very healthy projects for all households in the market. We can produce and offer safe and delicious agricultural products. At the same time, we are based on the industry. We want to empower the industry, and we can create value together. Towards upstream and downstream, we can do equity investment.
For our venture capital investment, we have invested in more than 50 enterprises. Eight of them have done IPO successfully, and there is the second round of financing as well. 45% of the projects are in advanced manufacturing, semiconductor, and carbon-neutral projects. When we go for high-quality development, at the same time, we create our own areas of different businesses. The group and the founders have already done a lot in education and poverty alleviation. Through different ways, we have helped 900,000 people to alleviate or leave poverty. We have altogether accumulated donation of RMB 9 billion. This is the starting year of the 14th Five-Year Plan, and we have already started to move the core work of poverty alleviation to rural villages. In this way, we hope to get wealthy together. We hope to contribute our efforts every 100 years.
We hope that only by working hard can we enjoy a very long and stable journey.
Thank you, Mr. Mo. I believe now you have more in-depth understanding of the company's interim results. We will move on to Q&A. We will take questions from conference call first. If investors want to ask questions, please press zero one. To cancel a question, please press zero two. We also welcome investors online to send your questions in writing. I will read out the question on behalf of the investors for the management to respond. Because of time, please do not ask more than two questions each time. Thank you. First, investors, question over the phone, please.
First question is from JPMorgan Chase, Ryan Li. Yes, please go ahead.
Management, Mr. Mo, greetings from me. I have two questions. In March, you mentioned your view about the CAGR, 10% for a three-year period. Based on your latest land acquisition and sales, and also gross profit margin, do you still have confidence to achieve this target? That's my first question. This is about strategy as well. Another question is, now I want to ask about something macro. Looking at the latest population census data. Urbanization has raised to 63%. If you look at the state's target, by 2035, we should reach 70%. In the past 10 years, if you look at urbanization rate, and you compare it with the coming 10 years, actually, in the coming years, we have to enhance a lot. How should we interpret these data? There are different developers who are very optimistic about urbanization. In Tier 1 cities, sales in the coming 10 years will still remain high.
If we look at these data together, it is difficult to support, especially for Tier 3 cities. With that population structure and urbanization rate, more or less the same as the past 10 years, how should we interpret the data? How does Country Garden adjust your strategy? My last question. If you look at the company's half-year period, in the first half of the year, the growth rate is the slowest in the past. RMB 2 trillion total assets, right? All in all, we have been saying that in 2023, June, you will be able to go into the green zone, right? Are you going to insist on the coming 24 months window to seize the investment window? Perhaps you are able to increase investment in some projects, or in the coming few months, it seems that the regulator is tighter in regulating the property market.
In terms of investment, you will be more cautious as compared to March. These are my questions. Thank you.
Right. Let me first take the second question. First, let me tell you. Talking about the 10% target growth, we have confidence. Our confidence comes from the state's macro policy and also adjustment of the property policy. The goal is to enable healthy development of this industry. Actually, the authority issued a paper. With three years, the property market will enjoy healthy development. In this market, definitely, this industry will exist forever. The government wants this industry to be healthier and healthier. Of course, this is something we would like to see. Number two, urbanization. You mentioned the progress of urbanization in China. Well, it is going to be stable and healthy for sure.
The central government talked about growing rich together, and there is one important point, and that is counties should be the basis for urbanization progress. With that, I think that would be positive help to growing wealthy together. Number three, I think that you can see from the Chinese economy during the pandemic, there is still positive growth during the pandemic. This year, there will be very good growth, I believe. In the coming few years, China's economic growth will still be the best in global economy. Given such macro environment and with healthy development of the industry, how can we improve our work? It all depends on our management capability, especially our competitiveness. Just now, you asked about 10% growth and where does my confidence come from.
I want to spend a little bit more time to talk about what the management has done in the past two years and now. I want to give investors more confidence. Of course, we have to enhance our competitiveness. There are a few areas. First, our investment capability. The precision of our investment is higher and higher. At the same time, we insist on three main points. First, our DNA principle will not change. We have to be law-abiding, and we have to attach importance to safety. There would be annualized return for our funds and total return. All these are things that we adhere to. At the same time, our investment criteria will not change. Analyzed rates of return of our capital, our profit margin. One is static, one is dynamic. Our commercial or office building share of total return.
There are a number of different targets and indicators. Of course, there are different unique characteristics for different cities. Our criteria won't change. Based on maturity of different projects, we will make adjustments. Our land acquisition is getting more and more precise. Besides, if you look at our overall management, we have a closed loop management. We are very stringent on that. It is related to investment. Investment will take the lead, and then sales will follow. It will be in line. Supply of resources, cash collection, and all these will form a closed loop. What do we mean? We have a standard for investment. We have criteria for investment, and that will lead, or that will guide our sales and supply of products. If it is higher, then the target, that means our management is good.
Otherwise, we have to evaluate where our problems lie, and we have to keep on improving. This year, we have acquired 200 odd land parcels. We have exceeded 97% in target achievement in those projects that we have commenced. You can see that our capability is higher and higher, our investment is more and more precise. In terms of investment, we are also smart-based. In the first half, RMB 88.4 billion attributable amount of investment. In July, we invested RMB 20 odd billion. In July, there is an investment window. We will monitor windows of investment in the market to make investments. In fact, our land investment is getting higher in amount and more precise. If we can acquire a good parcel, then that is equal to 70% of final success.
In land acquisition, we attach a lot of importance to that, and we are very prudent in acquiring land. This will tie into our healthy development. Second, our financial management capability is now better. This is a safety point for us. Our financial management is based on cash flow all along. There must be profit together with cash flow. Our financial management, comparing with other companies, is quite different. We are doing consolidated management, and it is vertical management. For our financial management, there are accounting, financing, cash collection, fund management, budget management, tax management, legal and risk management. All these are within financial management. It does not only get cash flow back to us, and it can also control risk. Our vertical financial management is on project level every month. There is dynamic arrangement of funds. These are all very clear.
For our vertical management, to what extent does it go? Our financial system people, their wages, their bonus, their pay adjustment, are all vertically operated with our financial system. They are also correlated with various regions. All along, our financial management is sound. At the same time, in terms of financial management, starting 2019, actually, cash collection is one of the major appraisal evaluators. I.e. cash flow appraisal. Our company can develop in such a sound way because every month, every quarterly cash collection is being guided by administrative measures. Every month, sales will take the lead, and then every quarter, cash collection is the main evaluation criterion so that the operation of each project can be more focused. At the same time, concerning incentives, again, the financial management will do analysis, and it is matched with our operation process.
In this way, normal development of each project can be ensured. Through financial management and system, and also all our staff members' hard work, each project continues to develop healthily. I talk to our finance people, usually, they need to identify problems, and I am the one to solve problem with our management team. From financial data, it is easiest to identify problems. I think, this area of management is very, very strong. Closed loop management is very strong. The third management is full cycle core competitiveness enhancement. I said at the beginning of the year, our improvement in competitiveness is getting better. We started in August in 2018. We talked about high-quality development. We want to enhance our core competitiveness, and we have done this for three years. Every year, every month, there is improvement.
Right now, there is smaller and smaller room for enhancement, but we will still adhere to it to make sure that things will not go the other way around. High efficiency, cost effectiveness, product effectiveness, sales, service, tech capabilities, all these are our core competitiveness so that our overall organizational competitiveness can be enhanced. Let me give an example. Product capability. We need to make sure that there is a central point. The quality of each property has to be good. We need to treat each property as our own property, and we ask third-party to do evaluation of the quality. We will not deliver if our criteria are not met. If customer satisfaction is not good, then the regional director, every Friday, has to do a review with the last three or the worst three players or staff members.
In this way, we can enhance our competitiveness. In terms of repair and property management service, we further strengthen them. Right now, customer satisfaction improves very fast. In terms of cost effectiveness, we will not endure any wastage, and we must be customer oriented. No waste. By means of the past three years' effort in enhancing our cost competitiveness, our cost competitiveness is now stronger. If you look at our selling and office administration cost from 2019 till now, we have reduced by more than half. This is a very good corporate culture and a realization of our cost competitiveness. By means of this enhancement in core competitiveness, our company can help graduates from university, and there are PhD students, and they are in very important positions. In our 106 regions, 37 of them are nurtured by our Future Leader Program.
They are now in core positions, they play important role. In benchmark regions, many people are nurtured by our Future Leader Programs. Our team members are very young, average age 35 years old. They are very energetic. Regional director, 72% of them are 40 or below. Every year, we recruit 2,000 odd university graduates. This is conducive to our talent development. Recently, our chairman wanted to make sure that our good talents can stand out, he personally extended an invitation for a course for good quality talents. 20 to 30 outstanding talents were recruited to work alongside him. This shows the importance attached to good talents. Good talents are very important to enhancing our competitiveness. In this way, we can have more vitality and energy. By setting up the 106 regions, our regions can be deeply worked on.
Based on customers' word of mouth, I think people will treat the projects as their own missions. That's about our good talents. The fifth area is our long-term orientation. Every five day, we will spend half a day's time to do training. It is a normal training or permanent training. In every training, there are more than 3,000 people. If a project does well in a certain region, there will be experience sharing, so people will teach people around them. If a project does badly, there should be review of the experience. With this kind of permanent or long-standing training, well, it is very effective, so our team members can learn. With this training, our experience or lessons learned can be internalized so that projects can improve.
At present, for all people, all participants to this training, they all look forward to the Friday training all the time. I was a part of them. We did rehearsal every time for these training. I want to make sure that the presentations delivered are lively and effective. Many of our regional directors have to join the video conference. As a result, a large number of good executives are nurtured. New businesses and synergistic developments. In the PPT, I talked about construction robots. I believe that when construction robots are launched, so construction sites can be turned into factories. That would be production line style production or construction. Quality and safety and cost can be better supported. At the same time, standardization can also be implemented well.
For our construction robots, plus our home decoration and so on, well, with this situation, the development of our new businesses really complements our core business. Finally, our corporate culture. Our chairman has done an interpretation of our corporate culture. Number one, property. Number two, love for country. Number three, service to make sure that society can advance. Number four, we must employ people on merits. Next, sharing, Number seven, continuous advancement. With all these corporate cultural elements, well, they are deeply rooted in everyone. With this corporate culture, we share a lot of pride together so that we can have long-term healthy development. By means of the past effort, I think we are on an upward trend, and we are confident to be able to achieve the 10% growth target set at the beginning of the year. We hope that all operation indicators can grow together.
At the same time, we have confidence that right now, if you look at this industry, the fittest survive. We believe that we can survive and develop stably. We have confidence that through our efforts, we can create value for our shareholders, our investors, and society. There will be stable return for you all. Please rest assured. In terms of our management, if there are any inadequacies, please feel free to offer your advice and comments. Thank you.
Right. Let me answer your question and let me supplement. Concerning population census. For population census, there are a lot of messages and data reflected. As you said, in the future, concerning new housing, sales, and market, there would be some impact or implications. In the population census, for example, a big increase in mobile population, 500 million. Right now, we only have 40% household coverage.
In 10 years, there is a reduction by 0.5 in terms of number of single households. I think this will affect consumption structure and volume. If you look at urbanization rates, Tier 3, 4, 5 cities, urbanization rate is still low. 63.8% is the nationwide urbanization rate. However, in Tier 3, 4, 5 cities, urbanization is relatively lower than the number just said. In terms of economic development and sustainable development and also going wealthy together, there would be a further push, and we all pursue good living. In terms of housing, this is basic need. I think there would be enough support. That's why we are positive about Chinese economy and urbanization over the long run. These are my supplements. Regarding total assets and slower growth, Mr. Mo talked about the macro situation, and it is related.
In the coming period, China's property market is being focused on its healthy development. Stable property price, stable expectation, these are the main ideas. For property enterprises, there are the three red lines requirements. We always said that given our funding situation, where it is quite satisfactory, so we make use of organic sales and cash collection, and then we want to optimize our asset structure. This year, in the first half, total asset scale rose just a small amount. However, if you look at the structure, there is a big decrease in liabilities and increase in assets. As a result, there is a small growth in our asset scale. When we face up to market and policy requirements, our policy is that our total asset scale is stable, attributable growth and liabilities came down.
At the same time, we do look forward to an increase in asset scale, especially liabilities-driven asset scale increase to boost growth in sales scale. We will be healthy and stable in walking along our path. In the second half of this year, regarding investment, our view is, all along, we insist on balance distribution in Tiers 1 to 6 cities and also opportunity-driven investment. In the first half of this year, we invested RMB 88.4 billion in attributable investment. The investment amount was lower than sales. We invested in RMB 260 billion. We sold RMB 300 billion of products. The investment amount, attributable value is lower than the sales. Especially from January to May this year, in the first half of this year, land market was very competitive. At the end of May, starting then, there is structural adjustment in the market.
Investment window is being opened. In June, in July, investment increased, as Mr. Mo said, within July, RMB 20-odd billion of investment. Towards the second half of this year, when the market trended downward, investment opportunities will emerge more. Industry 2.0, in relation to land price and so on, there is a change in trend. I think this will lead the land investment market back to a normal rational situation, and there are investment opportunities with the right gross profit for us. We will closely monitor opportunities in the land market in the second half, so we will consider our investment based on sales. For the whole year, for investment, it is more or less the same as in 2020. Right now, we are still making or doing the work according to budget.
If in the second half, there are more good investment windows, then we will increase investments. Overall speaking, balanced distribution and opportunity-led arrangement. In the second half, we will consider actual circumstances in the land market to make investments. Thank you.
Right. Thank you for your answers. Thank you.
Thank you, Ryan, for your question. Can we take question from the next investor?
Next question, UBS, John Lam. Please go ahead.
Thank you. Mr. Wu, greetings. I have two questions. First, for non-property development business, for example, robots and also home decoration and agriculture, what will be the scale of these businesses three years later? Will there be a spin-off plan to pay back to shareholders? Recently, there are some companies or developers, because of liquidity problems, experiencing a decline in projects. Will that affect GP margin of projects for your company? Will you take this opportunity to acquire some developers? As Mr. Mo said, land acquisition will determine 70% of success. Will this be a good opportunity for you? Thank you.
First question, I will take it. First question, new businesses. I think it is going to be a long-term business in our industrial chain. Home decoration and robotics, they are synergistic development within our ecology. I believe that robotics will definitely be successful. Of course, on the road of success, we need to do more experiments and also on-site monitoring in order to achieve comprehensive effectiveness. We have 18 types of robots, and then some can be commercially launched, and we have 28 robots which are gradually moving on-site. With construction robots and also culinary robots and so on, then construction sites can become factories, and effectiveness can be greatly enhanced.
In 106 regions, we want one project from each region for our construction robots to test its effectiveness. Of course, for the test, product quality and safety must be ensured. With the test, next year, in relation to some products, we'll see whether we can mass produce. With mass production and scale of utilization, I believe cost effectiveness and safety and quality can be further enhanced. I believe construction robots next year can see profitability. At the beginning of this year, we saw some good progress already. In the PPT, I said that in 2023, we hope that revenue can exceed $10 billion. In retail, we hope to grab a market share. Apart from our core business industrial chain revenue, there is $2 billion external revenue. That's our plan.
With the efforts, we believe that the situation will be better and better. Now we are in three bases already. In two of the bases, there is production already started. I believe that with our production chain, with our industrial chain being completed, and with market demand, we will build more production bases. Then construction robots and home decoration and spin-off possibility, I believe that would be a comprehensive plan from the company. As long as things are beneficial to our shareholders and investors, as long as it's good for our long-term development and social advancement, we will do whatever we should. You can see that the effectiveness of property management spin-off and the level has been enhanced, and you can see the synergy with our core business. In the future, we hope our new businesses can do a good job. Thank you.
You talked about developers implementing some strategy. For us, we are in tiers 1 to 6 cities. We have balanced distribution. We have 3,000 odd projects in China in 300 odd cities. Regarding our market judgment, analysis, and response, well, we do not target at specific developer. We only target at the market. We do not focus on any particular developer. Number 2, in the past period, well, gradually, there have been developments starting April this year. It is obvious some developers adopt irrational price strategy and some market intervention, so they wanted to dump their products. We believe that this situation in the second half of this year, when the market continues to tighten or when policies continue to tighten, this will continue to happen. This and that developer here and there will do something like that.
This is something, a norm that we may see in the future period. Number 3, for April to June, if you look at the situation then, we have done some analysis and we have made some response. The impact is on 140 projects of us, equivalent to about RMB 9 billion of product value. The intervention is about market expectation and also sales rhythm. There is more obvious intervention to these. Based on Mr. Mo's requirements, we will make dynamic adjustments and we will adopt aggressive sales strategy. Number 4, impact on gross profit. Unless if there are important change in the market, usually, there would be pricing strategy for the whole country in order to do sell through. This year in the first half, our ASP, comparing with same period 2020, was up 4%.
Behind this 4% increase, there are other negative impacts, still we enjoy 4% growth. In recent period, in 2020, 2021, the Gross Profit of sales was quite stable, 20%-25% for projects acquired during that year. For project Gross Profit level, it mainly depends on research about investment and overall competitiveness in the subsequent period. Usually, the cycle is 1.5-2 years. Short-term, irrational price interventions from specific companies will not cause big impact on our overall Gross Profit. Of course, we'll continue to pay attention to changes in the market and also competitive sales strategy to make adjustment and to ride out the challenge. At present, if you look at our analysis for April to June, the impact on us is limited and controllable. It only affects our sales conversion, and so far, our Gross Profit has not been impacted. Thank you.
Next question, please.
Next question, Elly Chan from Morgan Stanley. Please go ahead.
Thank you. Management, good afternoon. I am Elly from Morgan Stanley. I have two questions today. First, Mr. Mo, at present, given the property policies and financing situation, things are tight and difficult, and sales have slowed down. In the market, there is discussion about property tax. How long will this difficult situation continue? In terms of your strategies, what kind of preparation and arrangement have you done? Second question, just now a question was asked about M&A. When it comes to M&A investment opportunities, what are the indicators that you will consider in terms of importance? Will you focus on more standalone projects? Otherwise, the debt exposure won't be certain. You will more inclined to standalone projects to do your research, right? These are my two questions. Thank you.
Dr. Cheng will take your second question. I will comment on the first. As I said earlier, the central government adjustment and control over the property sector include the three red lines and control over mortgage loan and centralized land supply, 40% of restriction on land acquisition, all these aimed at healthy development of the market. This is something we most want. All along, we want to enhance our competitiveness. In a healthy developing market, that is the best market for us. I believe that in the past few years after our efforts in the seven areas I mentioned at the beginning, in 2018 August till now, we have worked hard for three years. Our competitiveness has advanced a lot. In a healthy development, we will see better potential.
We are confident to achieve 10% growth, and we are confident that in the new emerging businesses or industries we can develop, we can deliver stable return to society and investors. That's where our confidence lies, and that's also our attitude about the capital market. Yes. Just now, I forgot to answer 1 question. Let me answer now. For M&A opportunities, in the past, there are more and more. Recently, there is a more obvious increase of such opportunities. In first half this year, in terms of land acquisition, we were more active to 51%. We acquired those land by means of active exploration or development, including M&A. When there are so many opportunities, when we deliberate, we will select those that are suitable for Country Garden, those in line with our standards and criteria.
Just now, it is mentioned that for our platform, we have not seen a particularly appropriate platform with appropriate assets and liabilities level. Those are not in line with our investment requirement. In other words, we focus on standalone projects. When we invest on individual projects, I think the rationale is similar. When we invest in individual projects, we also look at a single individual piece of asset as the smallest unit. Of course, when we talk about the same piece of land, there may be single projects or single assets. There may be three, five, 10, or eight such projects. We will look at the individual conditions, and then there can be an asset pack. We don't want to work on platform. They are being separated into individual assets.
This can solve the latter part of your question. When we acquire these asset packs, what are the criteria we are concerned about? The criteria are the same as single project or criteria for a single market investment consideration. Profit level, cycle, turnover, dynamic return, and so on. Of course, when we consider these projects, we will be a bit more cautious. We will increase risk control and due diligence work. These are different from single projects in the normal way of land application, bidding, and so on, or auction. In terms of the criteria, no difference from single assets or projects. Thank you.
Thank you. Let's take the next question, please. Thank you.
Next question, CITIC Securities, Chen Zheng, please.
Thank you, management. two questions. First, robotics. That is Bright Dream Robotics. In the future, when it comes to third-party commercial clients, what are their usual backgrounds?
Are they other developers or governments? In the future, when you talk about construction robots, will they become very popular? To what extent? How big will be this market in the future? How far away are you from that target? Next question. In recent years, when it comes to attributable saleable resources, it is coming down. Now it is below RMB 500 billion. Is it true that you don't want to do Tier 1 development, or that there are fewer opportunities in the market? Thank you.
Concerning Bright Dream Robotics construction robots, right now we want to be down to earth. We haven't said which are our target customers. In the future, we haven't said how big the target market can reach. For the whole construction industry, it is a RMB 26 trillion market. For the property sector, last year, it's RMB 7 trillion.
The construction market is even bigger with more room for development. With our construction products, they will be implemented in our projects, so if they are successful, then we can transfer them or generalize them to the whole market. In 106 regions, each region will put forth one project for pilot. Southern and Northern China will be different. For construction robots, the products won't move, but then the robots will move. The products are mobile. The robots are fixed, and in those cases, the situation is different. We have 4,000 R&D people working on it. We want that our products will be bestsellers. For high level and multistory sites, the work process will be different. We are doing a lot of tests, and in the future, I believe that the room will be huge, CNY 20 trillion.
There is also the global market. We hope that we will make good product, and gradually we will first develop our domestic market, and then we will move overseas. In the process, we will also open to external markets so that our construction robots can serve society more. About Tier 1 reserve, actually, city renewal is a future big direction. The state, the government, encourages that. All along, concerning city renewal or old shanty town redevelopment, we have been actively participating. All along, this is our important source of land reserve or land bank. Our attitude all along has been active first. Number two, if you look at changes in the data, there are some reasons. First, Tier 1 land bank has a long cycle, on average, around five years for land development cycle.
City market strategies, policies, and so on, can change a lot within five years. Within this process of change, we will dynamically make adjustments. We are in 17 cities. We have 70 odd projects, so the total amount is big. As of this interim period, RMB 490 billion, and we have around RMB 100 billion attributable value. In the first half, RMB 30 billion has already been developed. In the second half, we can handle the remaining amount. This number is fluctuating. The decrease because of the maturity of land development and formation. In the cycle, the policies in respective cities may be adjusted, so that for some projects, there may be some policy obstacles, adjustment in relation to planning or so on. Within five years, these policies often see adjustment and change. We will exit from places with policy barriers or obstacles.
In this way, you can see a decrease in the total amount of Tier 1 projects. Besides, we will continue to increase some active land development projects as well. For example, in Guoshang and also some [Chengshe], there `are some new projects. We will make sure that we will be sustainable, and we will continue to increase, and there should be a virtuous arrangement, a full process development. Every year, there should be stable supply of 100 billion of products. For these, they will be mainly in Tier 1, 2 cities, the hotter markets, and GP level is relatively better. We do hope that our active reserve in our past land acquisition strategy is an important or a key way of land acquisition, will continue to respond to the appeals made by the state. We will take active part. Thank you.
Thank you for the question. Next question, please.
Next, Danielle Wang from DBS. Please go ahead.
Management, greetings. I'm Danielle from DBS. Today, I'm very happy to hear Mr. Mo's remarks about management. Very high achievement rate of investment, stable asset and liabilities or balance sheet. In the second half, there may be more investment opportunities. All these are very nice. In relation to GP margin, in 2021, in the annual report, it is stated that 2021 will be the worst, and after that there would be some rebound. After the first half, regarding GP margin, are you confident that GP margin will stabilize and rebound? In the first half, sales and land acquisition GP margin, as well as sold but unbooked GP margin, can you share with us the figures so that we will have clearer judgment of future GP margin? Second question, Mr. Mo explained competitiveness in seven areas.
He presented a very good conclusion. In the past, Country Garden is a target of learning by counterparts. Now it seems that you have not mentioned a lot about investment. My question is, for old projects, right now you are in the harvest stage already. What are the results of operation? Second, for new projects, do you still implement the same incentive system, or have you made big adjustments? Thank you.
In 2020, for our sales gross profit, it has stabilized. In 2021, our sales gross profit is around 20%-25%. This year, it is slightly higher. When we calculate gross profit, we have to wait till second half of next year, we can see a rebound. For sold but unbooked gross profit, it is lower than now because we have to digest part of 2017, 2018 assets which was acquired at high price.
When it comes to our financial statement, I would like to say that our financial statement is rather cautious. We have assets of RMB 2 trillion. Why is it that there is no further expansion? Just now there was a clear explanation given. We hope to enhance our operation quality so that we can be better, and then interest-bearing liabilities will be kept at a stable way. In this way, we can turn green under the three red lines. In the financial statements, liabilities came down, financing cost came down, SG&A came down. For 2017, 2018, the non-performing assets are being digested. For new assets, our GP margin is higher, and the share of new assets continues to rise. If you read from our financial statements, we have been working hard. For construction costs of new projects, this year it came down from last year.
In the future, operation and management and also cost control, you will see further good outcomes. The market is changing, but we are still safe and sound. Mr. Mo also said that we are gathering our strengths, we are training our talents, and in the investment market, we are very cautious. We're able to accumulate a lot of resources for the future. If the market is stable, then we will be able to make a leap forward. You can see our efforts and change, hopefully. Thank you.
Now, concerning incentive system, well, we are continuing it. In 2017, 2018, at the high point, we acquired land and there was loss in some projects. I think for the company, there is same rights for the same type of equities. This year, we made some adjustments.
What kind of arrangement?
We don't want you to have too high expectations. Within our ability to absorb the situation, we want to improve our projects management and operation. In the region, we will go for operation, for project safety, product delivery, customer satisfaction, supply, all these are the main targets. For the regions, there should be overall good performance of projects. For example, profit targets, funding, efficiency, and so on. For the regions, we have formed an investment platform. The investment platform is the same as the past, for each role or position, we have put in place some limitations. Investment limits, so to speak. There is an investment package. At first, the regions and projects together should not invest more than 10%.
There should be balanced investment for each project in accordance with fundraising, investment should be made in all projects in a region in a balanced way. Financial management will do analysis and overall management that our capital, our funding is matched with project operation, that our projects can be run well. This system will continue to run. Thank you.
Thank you for the questions. Can we take the next question, please?
Next question. Haitong International Securities. Xu Huili, please go ahead.
Thank you very much, management, for giving me this chance. I'm from Haitong Securities. Regarding the macro situation and the enterprise, I have benefited a lot from your sharing and analysis. I have two questions. First, in the financial statements, I can see that this year, for selling expenses, comparing with last year, there is slight increase.
Comparing with the year-end of last year, there is an increase. What are the reasons? In terms of channel marketing strategy, especially for the second half of the year, there will be some change in your strategies, right? These are my two questions mainly.
Right. Selling expenses in the first half this year, total amount increased. If you consider our same period revenue growth of 27%, but then SG, selling expenses was only up by 11-point-something%, so expense ratio came down. That's one point. Besides, well, this is related to your latter question. When we look at expense ratio coming down, the main expenses like promotion and so on, they are coming down. The only point that is rising is commission, and it includes sales commission and also outsourcing and other commission. That is related to channel attitude.
All along, we insist to work with the market. We use fewer agents. Our direct sales is quite a big percentage. We can control our customer service, that's why. For external sites, we adopt a more open attitude. This year, there are two parts. First, social distribution, accounting for 13% of sales. Another part is by means of our self-sales and also retail outlets, repair or maintenance and so on. That took up 10.4% or 10.7%. In other words, for external channels and external channels marketing, we are active. Besides, there are self-built clusters or channels. Apart from online direct sales, we have got another channel that is for social distributors and also all property owners and staff members. That is a comprehensive marketing tool. That accounted for 25% of our sales scale.
Overall speaking. In terms of selling channels, including the 100% self-built channels, direct sales, and also people-based sales, and also our Anlian Tongmeng, that channel, and also cooperation with other distributors, traditional distribution, all these effectively support our sales. We will control the effective ratio for different projects, the effective or appropriate commission level, and distribution level. After May, the relevant commission expense ratio slightly went up, but it is controllable. Externally, we will actively work with marketing partners in society to drive the overall selling strategy and completion of the strategy. We will be active, but in terms of expenses ratio, we will exercise reasonable control. Thank you.
Thank you for the answer.
Thank you, investors, for your questions. Can we now take the next question, please?
BOCI Research, Liu Yusheng, please.
Management, greetings. Your results, overall speaking, can deliver a peace of mind. There are two things we are concerned about. First, profit margin. Just now, there's a question about GP margin. Can you talk about minority shareholders' equity? When we acquire land, 80% is the attributable ratio. Can you talk about turnover? This year, next year, what will be the attributable ratio? When will it bottom up and start to rise? What about net profit? When will it see the bottom? Second question. This is related to the three red lines. Basically, you want to lower total debt, at the same time, you want to keep a certain growth. In other words, you need to expedite your turnover. It is difficult to raise profit margin by a lot, and if gearing ratio comes down, then we may have to do something with the turnover.
At your company's level, you are already at a very high level. How are you going to achieve that in terms of strategy? In land acquisition, are you going to go for land, aiming at quick turnover? When you acquire land, when you consider the types of land to acquire, how are you going to further improve turnover rate, please?
Net profit. Our current estimate and our resources will be that at the end of next year, net profit will see the bottom. I just said that our sales, gross profit, and book gross profit, there is a gap of 1.5 Years to 2 years. At the end of next year, we will see bottoming up. I have been emphasizing that in land acquisition, we have higher requirements than other tiers. We have higher requirements about turnover.
We have whole chain layouts. In Tier 3, 4, 5 cities, we have more plan than our peers. That's because of our land acquisition requirement. We hope to achieve faster turnover. If we can acquire good land, in these past two years, we are moving towards this direction. Results have been good. You can see that in this half year. With this operation quality, we're able to accumulate profits and increase attributable ratio, debt can come down. For minority shareholders' equity, at present, it is still not realized. Next year, I think some minority shareholders' equity can be reflected in the turnover. I think it will rise gradually starting next year. Thank you.
Okay. One point is about minority shareholders' equity. In mid this year, in our reports, in mid last year, 35 point something, at the end of last year, 35 point something, now 33 point something. It is coming down in the statement. Since 2019, when we acquired land, attributable ratio is going up for new investment. In 2020 and first half 2021, in 2020, bigger than 85%. In first half of 2021, 85%. In other words, our attributable ratio is slightly higher. In the future, our minority shareholders' equity can be effectively controlled, and I think our scale portion will go up. You just mentioned the lowering of gearing ratio. Financial leveraging should come down, and at the same time, we still can grow. As Mr. Mo said, we want to enhance our operations, so high turnover. How can we enhance operation leveraging? We pick Tiers 3, 4, 5 cities.
Land acquisition rate is quite high. This year, it came down a bit, 2.9 still. Based on state's requirement of 40% of cash collection, if we make investment accordingly, then we only need 33.9% cash collection in order to achieve that target. I think this leveraging will be such that with limited investment amount, we still are able to achieve quite high collection of cash from sales. Our development pace is now faster. Our cash collection efficiency is higher. Closed loop management is enhanced. All these will raise our operating leveraging fast. You just asked how we enhance. While we lower debts, by means of raising operating leveraging, we can still solve problems and achieve growth. Thank you.
Thank you for the question. Because of time, we will conclude the question part over the phone. Now we will leave the time for online investors. There are many questions coming online, so let me briefly conclude UBS, CICC, Credit Suisse, and so on. First question for Mr. Wu. Dividend and also venture capital yield. Can you share with us? In the coming 12 months, what is your financing plan?
Right. Dividend. Same as before, for venture capital, we start to have some profit, and it is in our core net profit, and dividend is paid from that. We hope investors can enjoy the profit with us. It is included in the core net profit, with RMB 1.6 billion in the coming 12 months regarding financing plan. We will take out new loans to repay old ones because our overall financing scale won't change. In terms of financing, we hope to have a lower cost of financing. We will make new loans. We will use new loans to cover old ones.
For onshore, offshore bond issuance, they are quite good. Cost achieved record low. Thank you, investors, for your support. There are good investment grades now, so our bond price in primary and secondary markets are good. Price in secondary market is stable. Thank you, investors, for your support. We will take new loans to pay down old loans. Next question.
Will the company enhance your investment reserve in Tier 1, 2 cities in first half this year?
Concerning our actual land acquisition in Tier 1, 2, attributable share is rising. Mr. Mo said that in centralized land supply for projects acquired during then, our overall assessment is quite good. In the second half for centralized land supply, it is version 2.0 for hot cities. The state continues to make adjustment and control over the price, the actual land price. Policy direction is very appropriate for us.
We can lower the premium rate, then we can improve quality. With this method, it can effectively control investment risk. At reasonable price and gross profit level, we can acquire relatively good land to build good quality products. That is very suitable for our philosophy of building affordable, good quality houses, and we can also control investment risk. We will take active part, and we will closely monitor the second or the third centralized land supply policy change and also land availability. In the second half, we will take active part, and of course, we will continue to be actively prudent to look at land supply, and we will be very smart in acquiring land. If this trend is clearer, then in Tier 1, 2 cities, I think the ratio will increase. Thank you.
Thank you, management. Because of time, we will conclude our results presentation here. There are still many questions from investors. You are most welcome to contact our management and investor relations team. We will answer them one by one. Thank you for joining. See you next time. Thank you.