Ladies and gentlemen, good afternoon. Thank you for attending the interim results announcement of Greentown China Holdings. Please allow me to introduce the management on the head table. They are Chairman, Mr. Zhu, Bixin, Executive Director and CEO, Mr. Cao, Zhounan, Executive Director, Mr. Li, Qingan, and CFO, Mr. Fung, Ching. The management will first brief you on the performance of first half of the year together with the prospect and then Q&A. Mr. Zhu will deliver his welcome remarks.
Respected investors, ladies and gentlemen, good afternoon. I do welcome you to attend the interim announcements in 2015 of Greentown China. My name is Zhu, Bixin, the Chairman of the Group. As you understand that CCCG has already started last year, in April, together with our management to sign acquisition agreement of the shares all together, which approximately 24.288% shares. After the review and approval in March 27 this year, we have officially completed the shares purchase together with also The Wharf and becoming the largest shareholders. In March 27, we have also had the first Board meeting after the restructure and two directors of CCCG also entering the Board.
Together with, in June 4 this year, CCCG also has another 100 million shares. In other words, Mr. Luo Zhaoming's 100 million shares of Greentown to be sold to CCCG. So in mid-June, CCCG has become the single largest shareholder of Greentown, and the share is 28.9%. In June 11, 2015, Greentown's Board meeting has again another restructured, and CCCG also had another two additional Executive Directors and Non-Independent Directors. Altogether, Greentown currently, in terms of the seven Non-Executive Director or the Independent, they have mostly five seats in Greentown's property with the senior management, the Executive Director, together with also the CFO, together with also the asset management, together with also the investors. All three major senior managements have also been assigned by CCCG.
In other words, CCCG, following the additional share, has already gradually become the major controller of Greentown, realizing the strategic control of Greentown. Ever since CCCG has acquired the shareholders, it was almost like half a year, and becoming the largest shareholder, now the single largest shareholders. So they have elaborated also the functions of the shareholders realizing their duties. CCCG acquired Greentown is a strategic arrangement. It is not a kind of opportunism. Acquiring Greentown is further having the chain of CCCG fully also their strategic and a various grand significance and promote Greentown development. It is also with great support with the strategic sync, harmonize. It is also a win-win or a multi-win issue for all the shareholders in Greentown together with the investors.
It is of great advantage. For last six months, with CCCG's promotion, Greentown has already realized a lot of changes, and such changes are quite exciting, reinforcing Greentown's development. One is that Greentown's, the legal person, has also a lot of complete governance. The Board, together with the management, and also each has their own transparency, together with also compliance, effectiveness, and also governance, have also apparently increased. We further completed the relevant systems. Recently, with the Board, together with also the management's repeated studies, we have already promoted some of the regulations with the various meetings, together with also investment, financial management, and also risk managements. A series of systems have already been promoted and started to be implemented.
Such action, together with our Greentown's management, is further regulated and also with high efficiency. Number three, with Greentown's business development, together with working with CCCG now, we have continuously realized strategic harmonious action with also sharing of the strategic resources. The projects under development of Greentown have already started with the CCCG's relevant parties to sign the contracts and also having the projects. Together with CCCG's very, very powerful overseas business, Greentown has already started with our expansion overseas. With the CCCG, we have also undertaken some of the overseas projects together with also the Greentown, some actual construction projects.
Number four, in having the inventories of our assets, the CCCG also on the leasing department has already started with actual collaborations with Greentown's asset, together with hotels and also on the shopping malls. The leasing branch has already signed a contract with Greentown involving approximately CNY 400 million+ project, and there will be further integrations, inventories together with also our reserved assets. Number five is that we are also promoted also on the platform on the financing for the first half of year, which is also very concerned by some of you. The Group, in terms of also the finance, has also elaborated a very important action, each parties, and also realized also on the benefits and interests of all parties. At the end of the day, there was a very quite satisfied result with a win-win situation.
Also, these platforms, after the entrance of CCCG, very beneficial promotions. Number six is that we have already started the promotion of the Greentown's new strategic surveys and studies for the following development philosophies, pathways, objectives of the future arrangement of Greentown, together with also on the CCCG's synchronizations. They've already some initial studies at the same time. We have also started promoting the Greentown's past business together with also the asset, also restructurings, especially of also some restructurings. Naturally, all of the above not only explain also some of the overall changes of Greentown, but we have really seen an entirely new Greentown.
In addition, for the last two decades, which have been always having a lot of headaches on our debts and capitals. We have already a very effective mediation with our major crisis and some potential crisis together with also our crisis have been already released from Greentown. For the last two months, CCCG's greater support enabling Greentown to have onshore, offshores bond issuings and notes, offering some of the repos agreements. With our overseas bonds, costs have already dropped from 9% to 5.8%. Greentown has also been approved by the relevant governments with $ 700 million notes, corporate bonds with 4.7%. For the resolution of the capital, offering absolute support from CCCG. Put it this way, Greentown is already a very low risk in terms of a financial situation, almost no financial risks. In the future of Greentown, there will be a very promising one.
Among which, despite the CCCG is only having a 28.9% share, for Greentown, we have already realized a very effective strategic control for CCCG. We have treated Greentown as our subsidiaries under our management. Having this condition, despite the fact that I am not a shareholder for the controller, for all of our investors in Greentown, I believe that this is something that we have to take into action and to share with all of you to make sure that Greentown is going to have a sustainable, effective development. I should say that now, for the management, we are still quite energetic and with a lot of business performance.
We have to say that for the management, we are full of confidence and we have the recent belief that with the concern of all parties and support with all our investors, investing institutions and shareholders support, and with the entire Board to have the correct guidance and together with all the endeavor of the senior management, together with the support of every single staff in Greentown, we can see a much better Greentown offering to all the shareholders and investors a very satisfied return. This is the end of my presentation. Thank you very much.
Thank you, Mr. Zhu. Now, let them review a little bit of the financial performance and also the business. Mr. Li, please.
Friends from the investors, good afternoon. Let me brief you a little bit on the interim as a kind of pre-presentation. First of all, in terms of the recognized revenue for the first half of this year, Greentown has realized CNY 10.75 billion, which was down 14% from CNY 12.56 billion, with the revenue from the sales CNY 9.7 billion, with approximately 18% down. In terms of the profit, the attributable shareholders was CNY 590 million, a decrease of 15% from CNY 613 million year-on-year. The core net attributable shareholders was CNY 650 million, down 7% from CNY 661 million. In terms of the revenue, together with also on the recognized revenue, after seeing on the similar, on the peer development of the other properties in China, there was a trend. Because for the first half of the year, inventory reduction was a very huge pressure on the reduction.
The profits, together with the structure, together with the properties, total cost, a lot of these issues with a lot of pressure on the reduction of the inventory, and that was why a drop of the profit. But for the first half of the year, it was also very decrease on the new projects together with the lands and also on the new properties. So there was a kind of a lack of cash together with all the profitability was decreasing. Number three, on the financial position for the first half of the year until end of June, the balance and also cash was amounted to CNY 11.66 billion. Net gearing ratio, 78%. Number four is also on the debt capital raising. We, of course, have seen some finance. In February 20th, 2010, we have also $200 million of the 8% senior notes.
That was before the CCCG, as Chairman Zhu mentioned earlier. On the end of July 2015, Greentown has already having the two senior notes to have a very good exchange with almost 8%-9%, replaced with a 5.875% for the exchange of the senior notes. That was, of course, being approved. This is one. On the other hand, it was actually last week, we were also approved with onshore debts, and it was approximately CNY 300 million. There will be also an additional debts. For the offshore U.S. dollars exchange for the senior notes, I believe that most of our old friends have really supported Mr. Li, Jun. He is also here, having great support to us in Hong Kong security stock market as also unprecedented examples. Number five is on the pre-sales.
For the first half, Greentown has reached all the sellable area of 1.6 million sq m. The contract of sales, approximately CNY 32.3 billion, up 17% of CNY 27.6 billion, and completed almost 54% of the total annual sales. As at the end of June, we have also recorded a subscription sales of CNY 2.5 billion, and that was number five. Number six is also CCCG for the shareholders. As Chairman Zhu mentioned, on March 27, we have also completed 24.287%. Then it was all together, 28.899% with the largest single shareholders with CCCG, and that is a basic business. Now, in terms of the operation, there will be some focus points . At the end of June, for the first six months, basically, as I just said, the pre-sales was CNY 32.3 billion up.
Together, because of the structures of the products, together with also strategic positionings with various factors and also on the cost control, all together, the property price was also going downturn with on the CNY 20,000 to CNY 19,000 per square meter. This is not that we are reducing cost reduction, but structural reduction. In terms of the distribution, we do not have a big change because we understand that on the Greentown mostly are distributed in Hangzhou and Zhejiang province and also on the Bohai, for example, Tianjin and Shandong and Qingdao. These are the second largest region, then followed by the other regions, including Beijing and Shanghai and other areas. Even with Xinjiang, it was quite similar to the original plan. Second is on the scale.
For the development scale, for the first half of six months and the restructure, we are talking about 18,805 million square meters, with also an expedition of the, a ctually, it was 19,785 million square meters. But together with our complete project, including with also on the disposals. Currently, we have 18,805 million square meters in our works on the reduction of the inventory was quite good, and there was the development sale, followed by the land bank. At the end of June, Greentown had 81 project sites. All together, GFA 33.24 million square meters, of which, we have also 22.44 million square meters. Attributed to the Group is 12.11 million square meters to the sellable GFA was 19.19 million square meters. But now we have approximately CNY 2,766 per square meter with Zhejiang, Shanghai, Beijing, and Shandong and Anhui and Xinjiang and Liaoning province.
Number four is on some of the honors and awards gained. We have two honors. One is from the Tsinghua University to the State Council, the Top 10 Chinese Real Estate Enterprises by Comprehensive Strength. We have also the Top 10 Largest Chinese Real Estate Enterprises. Followed by the China Enterprise Confederation in China and Entrepreneurs Association of the Top 500 Chinese Corporates, Greentown is ranked 168th, up from last year's 22 positions. They were the two honors for the first half. The two other slides, Chairman Zhu has already mentioned, so I don't have to tell you. Time-wise, starting from December and some of the major time, CCCG has become the single largest shareholders and also some control on the Board.
So far in terms of the structure, as you can see, CCCG is under SASAC 100%. The total share of Greentown is 28.9%, Wharf 25%, the Founder, Mr. Song and Mr. Shou, 18.5%, follow on the other public shareholders, 27.6%. These are the current share structures. In terms of the Board's, we have seven Executive Directors. CCCG has taken five seats. As Chairman Zhu mentioned also in CCCG, this is a strategic investment. They have designated two senior management. I, myself am also a designated senior management as a CFO, and the other one is Mr. Li, Yongqian . He is responsible of the operation. In this slide, I will also brief you a little bit and followed by the time will be on the CFO's. Mr. Fung will brief you on the operation and also financial highlights of the first half of the year.
Thank you, Mr. Li. Good afternoon, ladies and gentlemen. I have to brief you a little bit about the financial numbers, and we will save more time for the strategic development. For the first half of the revenue, as Mr. Li said, I will talk about also on the business sharing, which is of course, CNY 758 million. We also have another for the joint ventures associates. Of course, we have only sold part of the shares to other parties. As you can see for the major expenditures relative to the revenues in terms of the administrative and also the sales, it is mainly because of the salary and also incentives. That is also related to our business on the selling, because here we are not talking about also on the revenue, but there will be also the pre-sales.
For the first half of the year, we are having some of the growth, and that is why we do have an increase of the sales expenses. For the second half of the year and this year, we have three hotels already completed in the Westin Hainan, Zhoushan Westin and also the Hangzhou Zhengnan Hotels. These are all five-stars hotels, and they also have some initial operation costs. That is also increasing our administrative sales. In terms of the financial cost, of course, we also have the 66.8% of the interest capitalization. We've put it more on the balance sheet rather than the real interest. For the first half of the year, it was CNY 1.64 billion, but last year was CNY 1.7 billion, but the average interest rate also decreased, and this year it was 7.5%, and last year was 7.9%.
For the capitalization, it was 81.4%, now it's 66.5%. In terms of the balance sheet, we can see that it was a great increase. In terms of the margin, comparing to last year, it was a little bit down, but we can see that also the core profit attributable to owners, the deduction is not so big, and we have CNY 650 million. Last year was CNY 661 million. There were also some kind of profit loss on our foreign exchanges. Without consideration, the core profit is okay. For the balance sheet, it was nothing special. For the liabilities, it is becoming a very stable rate of 78%.
As you can see that we have also the syndicated loan now restricting our a lso the net gearing ratio is about 90%, so we have to be under debt, but we do not have a special net gearing ratio to be the lowest possible. As a prospect on the development, on the leverage of business development is quite normal and be responsible. So we will maintain this net gearing ratio on a comfort level to comply with our terms. On page 17 is, of course, on our revenue and cost structure. As you can see that, the major cost is still on the construction cost, which is 48%. On this unit price, we talk about CNY 7,200 per square meter. Greentown is always on the product quality as a priority concern.
As such, the products or the brand have been also maintained, and this is why we will be insisted, in terms of CCCG, and that is why they really appreciate our product quality. It is not because the environment change will also destroy the quality, achieve the revenue objectives. There will be a persistent on the product quality. In terms of the gross profits improvement, we believe that as long as our product, the position will be more accurate and there will be also cities that will comply with our products. So we have to improve, not to save cost, improve the quality. On slide 18, this is the debt and cash.
Now that the one-year total asset is with approximately 30%, and this is a little slightly change, but on the senior notes and RMB together with the U.S. dollar notes and the changeover, there will be also improved towards the second half of the year, and there will be a much better improvement on the terms. In terms of the overseas debt, it is approximately 38.8% of CNY 15.5 billion. The past trend was more offshore loan. Now RMB can be also conducted with a long-term, with the RMB to a continuous devaluation risk. We have also coming to the domestic finance on the long-term finance coming back to the domestic one. On slide 19, this is also on our CNY 45.5 billion on the financial position, but together with the CCCG as our major shareholder, so we do have a lot of financial channels.
We currently will still be risk management, not because of the development to have a huge finance of debt. This is a very effective control. On slide 20 is on the exchange and consent solicitation, as Mr. Li has already mentioned, I really appreciate your support with a kind of unprecedented change of deal in Hong Kong. The next part is going to brief you a little bit about on development projects. All in all, we have six directions. Number one is to realize on a single property development comprehensive quality life service. Secondly, on the asset-light business, on the return on capital and leverage on brand name advantage. Number three is on the strategic planning by refocusing on core cities on future development. Number four is to diversify product lines to better fulfill market needs and further enhance customer loyalty.
Number five is improve cash flow and reduce level of indebtedness. Number six is to diversify funding channels with innovative funding routes to improve capital efficiency. I believe that Mr. Cao will brief you in terms of all those points. The last slide is on the sellable resources together with unrecognized revenue. On the second half of this year, the overall sellable resource is approximately 5.91 million square meters together with up to the end of this year, it will be also sellable GFA 3.52 million square meters and for the 2.39 million square meters towards the end of this year, or it's going to be CNY 60 billion. We are fully confident on that for the overall annual sales. In addition, we have also accumulated CNY 69.1 billion.
In the second half of the year will be also CNY 39.5 billion, which is approximately attributed to the Group CNY 21.8 billion. This is my presentation. Thank you.
Now, we're now coming to the Q&A session. If you have a question, please raise your hand. In order to have more questions, we limit only two questions for each of the people, and please identify yourself before asking your questions.
Thank you. I'm coming from Credit Suisse. My name is Du. I do have two questions. Number one is asking the chairman, in terms of the corporate strategies you mentioned a lot, as I can see that on slide 12, you mentioned about on the future CCCG together with Greentown's cooperation, and it seems that there is a term, it's quite important, as you said, there might be some kind of capital injection. Can you also talk a little bit more details on slide 12? Can you explain what exactly is this injection? The other question is in terms of strategies, you also mentioned about focusing on some of the core cities.
Actually, there are a lot of other developers are selling their lands or their unfinished projects to be sold in some of the cities that don't look very promising. So what about Greentown? Do you have any other asset? Some of the current projects that you have to wrap them up and have them sold to other people. One is on the strategic. Number two is on the financial issue. As it was mentioned that we have the sum of the project deductions. So can you also explain some of the details, what kind of projects, why you have to have? Because last time you also mentioned on the reduction. Why again this year? It seems that the market, comparing to last year, was a little bit better.
Going back to slide 17. You also mentioned on the 2015 land cost was going down, but on the construction cost was up. That I can see on the first half of the year, the revenue recorded, many of the projects were in some smaller cities. Can you be more specific why the construction cost is still maintained to such a high level, especially in some of the smaller cities? Thank you. Because CCCG is designated on the construction, would it be that in terms of the construction, there might be a much better improvement? Thank you.
Let me answer the first part of the question. In CCCG, you may understand that CCCG, before 2011, they did not put property business as their main business. At the end of 2011, it was the state capital, SASAC, has also approved as 100% to be implemented into CCCG. Probably you know that CCCG was listed in Hong Kong in December 2012. So in 2006 and the end of 2011, CCCG, 98% of their capital was also listed company in Hong Kong. After 2010, the China Real Estate Group has also been merged to CCCG, so that is why they have a non-listed business. The China Real Estate Group together with CCCG, have also treated as a strategic business part.
As I said earlier that in order to complete their industrial chain, so for the property market, for CCCG has also a kind of a completeness for their industrial chain. This is quite beneficial, and that is why the CCCG has treated the property market as a kind of strategic consideration. With all this last four years, one is that we will fully utilize the original China business to have a continuous development. We have also established in 2011 on the CCCG property market, and it has been already operated for the last four years. For the property market, we have also on the other enterprises to be acquired or merged into the whole group. For the China Real Estate Group, we also have another listed company called China Properties Investment Holdings Limited and 0736 listed in China.
Other than that, they also have almost like more than 100 other business units have to be either merged or to be reorganized. With all these legacy issues to be rearranged before the China Real Estate Group coming into the Group CCCG, we have two business. One is CCCG's property, which is a platform, and another one is also to deal with some legacy issues. Under these two, the [Non-English content], or the China Property, was being treated as one of very normal operating enterprises listed in China for the last four years. It has been also developed quickly. Currently, for the CCCG, other than Greentown, we have almost 60 projects. The actual GFA is approximately 20 million square meters.
Put it this way, we have provided a very good foundation, and it is expected that this year, the non-Greentown property sales in the Group is approximately CNY 10 billion. For the last couple of years, we do have a very good foundation because of the domestic adjustment. So other than treating some historic issues, we are also trying to develop, but now we have some kind of solid foundation. At the end of last year, it so happened that there is an M&A opportunity for Greentown. As I said, this is a strategic arrangement. We are not any opportunists. With the CCCG, together with the property markets, of which we have the CCCG's property with the acquisition of Greentown.
When there is a good opportunity, that is why with strategic acquisition, this is not a financial investment or opportunism by having some kind of speculation and go. But Greentown, as CCCG's major property markets branch, would to realize a long-term strategic development. Under such an arrangement, you can see that for the first half of this year, we have done a lot of works. As I said in my opening remarks, a lot of works has been done with also the platform. Then we have also increased our investment to become the largest shareholders. We also rearranged our Board to realize in Greentown control, as Mr. Li said, that we have also designated two Directors, not only two, but also three in the management. The Executive Director also comes from Mr. Cao.
He himself is also being designated from the CCCG to become the Executive Director of Greentown. Currently, he is also, at the same time, the Director of the CCCG's another branch of the property. So on the CEO, CFO, together with also the Asset Management Director, together with also on the Executive Director on the investment, three are being designated from CCCG. With the seven Non-Independent Directors, five of them are from CCCG. Such an arrangement for next step, as I said earlier, that despite we have only approximately 28.9% shares, in reality, in CCCG, we treat Greentown as our one of the series, the same level. So this is to realize Greentown, together with CCCG's overall strategic harmony. Looking into the future, following with the Greentown's further deepened management and also under strategic harmony, there will be also some issues to be resolved.
There will be also going forward. In terms of the strategy, there will be more and more synchronized. There are two objectives. One is that such a restructuring for the CCCG's property market as property business is quite beneficial and for Greentown, for their development, which is also advantageous. These are the two objectives that we pursue with the overall objectives with continuous restructuring and also strategics. There will be a realization at the end of the day, the win-win situation. Secondly, to further reorganization, this will also comply to the securities, China and also Hong Kong's set of regulations. From strategy, what we can see now is, I do not want to tell you any stories, but internally, we also have a listed company in China, also in Hong Kong.
Whether there will be further reorganizations, this is an issue on the table, but I believe that it takes time for us. At the end of the day, we are now coming into Greentown. It is only about six months, and Greentown is a very famous enterprise together with brand. Historically, it has been already the 21st year, this year, and they have a very good size and brand recognition for CCCG. After taking over, we do have a lot of issues that will have to be resolved in terms of compliance. So for the further restructuring and reorganization, it is going to take a long time. Personally, I feel that as investors, you do not have to see a how long it is going to do it?
This year or next year. But as long as we have to comply with the Hong Kong and Mainland China's listing conditions, we will try our best, as I said, to have two objectives we realized. For the shareholders and all the investors, especially for the Greentown investors, this is going to be advantageous. This is a background. In terms of the asset injection, capital injection, currently, we do not have any detailed capital injections or on which date it is going to be injected. I believe that for CCCG, we still have approximately 60 more projects. We do not exclude for all those projects that following on the collaborations with Greentown and also reorganize or possibly some appropriate arrangement. This is out of the question.
For Greentown, they have a lot of hotels and also on the shopping malls, a good percentage in terms of the inventories. How to deal with those inventories, also one major issue is for the leasing companies in CCCG, they have to start to study the inventories of the assets of Greentown. That is also a kind of a capital rearrangement. It doesn't mean that we'll also have another kind of a solid assistance. It doesn't mean that we have a very specific timeframe or seasonal or quarterly arrangement. This is going to be a long-term promotion altogether from CCCG. This is not a speculation for Greentown, but a strategic arrangement.
We believe that for the CCCG's property business, especially on the overseas property business, based on our advantage by utilizing the Greentown's planning, construction, and designing advantages to do a good business in this business. This is part of my answer. For the rest of the question, Mr. Cao, being the CEO, he knows much better than I do. Mr. Cao is going to answer your second part of the question.
Friends, old and new, I'm very happy to meet with you again. At the last media conference, we have received a lot of the questions from the media. Chairman Zhu and Mr. Li and Mr. Fung have already briefed you simply on all of the conditions. As you mentioned, a friend from Credit Suisse on some of the questions, whether Greentown were also considering about tier three cities and products. Would it be possible to dispose those projects? Starting from the first of 2015, this year, the average price was approximately CNY 2,700 per square meter, going down, but the cost is still going up on the construction cost. In terms of also the finance, this is quite simple, which you said, put it this way. Let us interpret for some of the macro environment.
After the shareholders crisis last year of Greentown, we have almost not stopped. In 2012, the Wharf came in. In June, we have another venture capital. At the end of last year, CCCG become also the single largest shareholders with a timeframe that the Greentown had been always changing on the huge percentage of shareholders. Why is that? Why such a big change? This is a question that I've been always keep thinking to myself. Now that regardless of whatever, this is really coming to the end, CCCG is a state-owned enterprise in the SOE, a single largest shareholder to control directly Greentown. A very significant process is that it involves too many issues. How to do a business in a property market, regardless of whether CCCG is a shareholder. In the past, it was another big one.
I don't care, but in terms of the management, how to manage Greentown like that is becoming simpler and simpler. It is simply an entity. How to manage and do an entity is quite simple. Number one, what kind of products you are engaged? As I said earlier, regardless of whether it is an agriculture product, the first thing you have to do is to do a better job in your rice planting. For example, the Japanese rice is always good from the second, which is in Germany and Japan for the manufacturing industries. They have a lot of 100-year-old industry. Their quality among their peers are always the best. With an enterprise like that, it's become simple. First of all, your product, you have to do a product quality.
With the best product, how are you going to effectively to have the best process to supply to your potential and your prospects and your customers? These are what we call the sales. What is left now is, of course, some internal issues from the industry or your corporate. This is very simple for an enterprise like that, if it is going to be run through. With a process, as I said, why Greentown has been always volatile for the last couple of years, the basic reason is, of course, starting from the beginning of 2010, the property market business in China has also a very major turning point from the huge profit era turning into relatively an average margin for the GDP in China.
For the top 10, the 10, 20 or top 50 of the developers, their profits really much, much lower than the double digit. But I can say that next year, it is still going down. Now we're seeing another critical turning point. Starting 2010, we're now having a turning point. Plus the central government, starting from 2010, that there will be also some control on the property. It's a very painful period that we have survived for the last five years. It is quite meaningful by commenting on that. It is very easy for you to suppress the market. You can take a lot of very critical policies and measures, but if you want to help, it is not so easy to let it go again.
For example, other than Beijing, Shanghai, Shenzhen, the central government and together with the local government, have already treated the property market. They have already promoted all the policies, but it is not so simple for the market to revive. Greentown vs the other industries in China have also experienced a very major painful period. More seriously, this kind of macro adjustment have also some kind of side effects. We're still trying to resolve those after all the side effects. This is an objective reason. The other one is that other than the other risks, we have some sensitive figures on your gearing ratio, on your sales price, on your cost, and your margin.
These are very sensitive and normal numbers as an enterprise. After the macro and China adjustment, this is kind of disastrous result. I can make a conclusion that in the future China market, two to 10 years, there's only one word, is to reduce your inventory. Just simply reducing your inventory. There's nothing else that you can use or any other kind of thing that you can cover. Simply reduction. Such like Greentown for the first half of this year, we have CNY 32.3 billion. All together, we are still around this point of CNY 20 billion. At the end of last year, it was approximately CNY 70 billion. With a little bit, 18 months, we have some of the very old inventory.
As you said, tier three cities, whether you are going to maximize your sales or to sell your projects. This is the aim running a business. As I said, with so many elements to have them linked together, if you want to have your enterprise, what kind of enterprise you want it to become? My idea is that, first of all, it is number one for the product quality number one and service quality. In the future, there will be also on the other sales in the future. One simple way is that Greentown China, in the traditional development, I will definitely have the three, quality always goes first, and then building quality, and then service quality always be the first and also on the credibility.
It means the product value, and for the factors, the product values are under control. But the question is on your product price. We are talking about cost of the product. I have to link up these questions together and to explain to you. If many of our peer companies, I do not know if you have studied about those domestic products, can you tell me one example of the top 10, top 50? Which one carries the highest on their credibility together with the value? Also, you have a high price value, but with a very low cost. I believe Greentown, we have this kind of fundamental elements.
So long as we can control and affect this on the cost and also manufacturing building cost, then we have also a very high and large scale reorganization. The other one is that we will consider more on all our clients all over China. Greentown actually is a company that in the very beginning of this company, we have also adopted a very simple way to have a pricing mechanism to have it. This is not the reason, but I also take into consideration the issues of the clients or the customer loyalty all over China, other than the management and also operation. There will be also consideration on the cultural issues, sustainable development. I feel a much, much deeper idea that this is not because of a personal or individual or the corporate cultures.
Put it this way, tier three cities for us were definitely trying to expedited our inventory reduction. Even for one single issue, we will also maximize, but the pricing system is not going to go to the bottom line. We are talking about on the sales price. If I have to change the factors, then I can make some profits. We have done a very good job like that. We are having a very good sales. If there will be some complaints from the old customers, there might be some changes of volatility of the coast customer, as you said that on the tier three cities, we will definitely go for the reduction. I can tell you all investors, we have now set up the team Greentown China.
In the next couple of years, we will only focus on 11 cities with Tianjin and Jinan and Nanjing and Hefei, other than the four major cities and Fuzhou as well and Xiamen. On the core cities plus the tier two. Of the four major cities, we have also the core cities of the tier two cities. As I said, on the tier three, four , we are not definitely going in, but I can tell you explicitly that in principle, we do not go to those tier three, four but it does not exclude that in Zhejiang Province, in Wulin cities. It is also kind of provincial city. Up to today, this city, they are having a much demand and supply. Their average price is more than CNY 25,000 per square meter.
So how do you define it as a tier two or a tier three or a tier five city? There is no way that you can compare. You cannot generalize, but we believe that it is defined as the tier three cities. What is also talked about the cost, you are correct on the cost. On one hand, this is a cost structure issue. For example, we have on the Nanyuan in Hainan or the Hangzhou project, and the product structure is quite problematic. In tier one or tier two or tier three city. In tier three or four, the weight ratio is low or high, and then you have a reduction of the land cost, but the construction cost is still high. You are correct in that. On the construction cost issue, as I said, last month, I was also having our office meeting.
We discussed about the product position has to be expedited in several cities. Now, Greentown, we have already more than 128 projects. Out of the 128 projects, you have to follow up on the market changes to adjust some of your positionings, some of which have already been designed two, three years ago. For example, you have the general average price too high, whatever like this, and construction cost is the same. Now we have to have two core issues. One is that on the property market, as a Chinese developer, they are having a reduction of the margin of revenue, but with all our suppliers, including land together with the government, the price still going down, but not for the land cost or the land supply. They are still increasing the land cost.
The second supplier is under control, for example, on the design or some of the other actual costs. Number three, on the general contracting, number four is on the landscaping. Number five is also on the other building, all of the suppliers. As a general constructor, which is a platform cooperation, this is a combination of all. But with all of the suppliers, they are still having the same attitude. In the old times, with this kind of huge profits, I do not know whether you have consideration about this issue. This is the case. The general constructor did not lower the price, and the design fee is not decreased. So have you ever considering also on your landscaping?
The advertisement is not dropping. This is the overall industrial phenomenon. Why Greentown will have to disclose and to reset up the opening mode? We are not talking about on the land bank reserve, but we have to open up all. One followed by each other of the suppliers, and you have to disclose all your costs and set up your costs. This industry is coming into a minimal interest and a minimal profit. Each of the operators is quite sensitive, so you have to restart and redefine the development, and also on the margin. Or even for the commercial mode, will have to be redefined. If it is under this huge profit time, I do not know how I did not notice that.
Which of the other developers are still making good profits with more than 30% profits? Out of these questions, I believe that as you said. That is why I have opened up all of the other definitions, so that I can save time to repeat the other questions, because people are very concerned on the issues of the whole industry. Second question, please.
My name is Chiang from Jefferies. I was heard from the media on a 2017 objectives of CNY 100 billion. Now that Mr. Cao said we are focused on 11 cities. It seems the size is not be able to support this kind of sales. Would that be kind of rumors? Number two is that I can see the management set of your objectives, and we might have some kind of options. Thank you.
Thank you for your question. On the future policies of the management. In terms of the size, it is not contradictory because you may not notice that the focus cities for Greentown China in Beijing and Shanghai, we have already have a lot of land to understudy and some kind of in-depth context. We do have a lot of pressure because it is not so easy to get lands in Beijing and in Shanghai. We are talking about minimum, we have approximately CNY 6 billion-CNY 10 billion. According to original land price, multiplied by three is the sell price. So if it is CNY 10 billion with the land, we are talking about CNY 30 billion now. It is adjusted 1.2 or 2.7. In other words, with CNY 10 billion, we are talking about CNY 27 billion.
So we are talking about more than CNY 50 billion, or in Shanghai, we are talking about also another CNY 50 billion in Shanghai. Number two, in Jinan, in Hangzhou, with a tier two core cities like that, we have already reserved a certain amount of land bank. Lately, Jinan has also acquired some other additional land. We have made some calculation with the new lands in Hangzhou. Yesterday was a new project. The average price was approximately CNY 90,000. At the very first opening, 80% was already sold. The critical point is depending on the developer, on the product positioning, and also on the product quality vs on the cost control.
At the end, the end sales and also on the sales, it is no guarantee. If you have your leading time and also the gross margin. You have also reserved one question, why choosing those cities? Can take in consideration also on the sale, sellable. This is our core consideration of the next cities in terms of the sales and also size. This has been repeatedly studied or even at that time, we thought that it is not so good in terms of the We have also done some kind of some models between 60%-70% of the sales. So there is no problem on the sales. Okay, Chairman Zhu?
In terms of the measures on the management, it is necessary because you may understand that Greentown originally is not so clear on the organization. CCCG, as the largest shareholder, now trying to promote also some of the clear policies. As I said in the beginning, the management together with the duties of the Board have also clear definitions. What is left is to make sure some of the objectives. CCCG has always been, in terms of the corporate management, in that high objective-oriented to have a stringent review, to have appropriate incentives. Such will guarantee the industry to be the fundamental of sustainable development. The next step for Greentown's management is that we are also studying some of the incentives, as you said earlier, on the options or the other arrangements. I believe they certainly will be available.
We are going to have a very outstanding property enterprise, and we have to follow the market rules on the industry's characteristics. What the other people can do, we can still follow. If other people can do, we can do it much better for the incentives. This arrangement and economic measures for the investors are being responsible, having the full and effective encouragement. There will be a guarantee for long-term stable return for our investment for the management setup. This will have to be there. We will be based on Greentown's current development and together with the undertaking and also their systems, there will be definitely some arrangements. In terms of the 2017's CNY 100 billion, it is until 2020, and there will be CNY 120 billion. This is on the asset-light arrangement.
For example, previously, Mr. Cao also briefly We have already set up a Greentown Group with the asset-light. Greentown is the leader of the industry. We have already established him. In 2017, we have already about CNY 10 billion. Out of the CNY 65 billion in 2017, there will be another CNY 15 billion. It can be easily reached. In 2020, we are ready to have realized the asset-light sales of the CNY 30 billion. Because of the time constraint, last question, please.
My name is Eugene from UBS. I have two questions. Number one, on The Wharf. It seems that in the Board meeting of The Wharf, they are trying to withdrew, but they increased their increasement. With all of the future development, the corporation, what kind of role they play from The Wharf, and CCCG will have further increase or injection? Number two, one question is also on the gross margin. Mr. Cao also mentioned about towards the second half, there's still a reduction, but for the overall booked profit, gross profit, do you have further pressures?
Okay, about the first question, Mr. Cao answer the second question. For The Wharf, compared to CCCG, they entered Greentown much earlier than CCCG in April 2010. Actually, it was June 2010. It was a financial investor for The Wharf to go into Greentown. CCCG was almost like 2. 5 years later or later than The Wharf. As far as I understand that The Wharf, despite as a financial investor coming into Greentown, they also have elaborated a very important role, as we said in our press meeting, answering the question, Mr. Cao understand quite clearly on The Wharf's contribution to Greentown for the last couple of years.
This is a very, very is a kind of a bolster. A very great contribution to Greentown from The Wharf. For the first half of the year, CCCG coming into Greentown, put it this way, the two of our major shareholders work together. A very good harmonious approach for the platform in CCCG's additional injection as the first, the chief shareholder, together also the Board reorganization with the strategic management. The Wharf has also fully communicated with us, and they also support us fully. As a financial investor, The Wharf, whereas the CCCG as a strategic investor for the both organizations' objectives are quite different in terms of the Greentown. For The Wharf, they also encourage CCCG to manage Greentown. That is why we are having a very, very success period. The Wharf is a company that we respect the most.
Historically, we have a lot of cooperation. We understand each, despite we are the two shareholders, but coming to this screen as a different identity, coming into Greentown. The senior management from the two corporations have met each other and talk and discuss and to study how to develop and manage a very good Greentown. Having the Board restructurings of the Board, The Wharf, I think it was about July 6th or July 7th. They have already also making a public announcement. They are not going to participate in terms of the Board. They believe that CCCG as SOE in terms of the risk management or the operation, in terms of all the others, in terms of properties, they trust CCCG. In terms of the Board, and they are still will serve as the financial investors.
But for the shareholders, they will become a very good shareholder to offer their comments and also requests for the company's business. For Greentown, they will also have their support. Most likely, you already see that within the market they are utilizing kind of a low price. They also added a little bit more the shareholders via the share buyout offer. As a financial investor, this is the best arrangement, and I believe that from the two major shareholders, it is very responsible for Greentown. As you mentioned, whether CCCG will continue to have additional investment. As I said, that whether we will raise to an even higher ratio for a share structure, that depends on the actual situation.
I believe that if it is beneficial for Greentown's development, and if it is also beneficial for the CCCG's property business in terms of the policy, if it is compliant to regulation, we will consider. But it doesn't mean that it is a target that we have to add additional arrangement. This is not a definite arrangement. The only consideration how to have a stable development of CCCG and also on the property business, with CCCG, with a kind of strategic considering, but also the other consideration on compliance regulation. Thank you.
In terms of the gross profit, I will have to say something from the bottom of my heart. I will consider next year for the gross margin. At this time, I will be a little bit more conservative. Greentown, in terms of the property market in China, I would definitely give you a surprise. But in terms of the gross margin, that depends also on some of the other factors like, for example, the low land cost, and we have no problem with the capital in Beijing and Shanghai. We are talking about some of the other capital. So if the father is rich, and the son is of course guaranteed. Secondly, it is because of the government that within the system we have a lot of collaboration.
That depends also on the land price. Number two is also on the construction cost. Number three on the sale, the sellable price. Number four is also on the financial cost in terms of the gross margin, whether we can also capitalize with a heavier capitalized ratio. This will also determine whether it is a good high and low gross margin. Greentown sale price will be more than CNY 12,000 per square meter. If it is more than CNY 12,000, and the profit and margin will definitely have some rooms to do. If we are selling more than CNY 25,000 or CNY 50,000, and of course, we have a very large room for the margin. This is a characteristic of the Greentown product. If it is less than CNY6 ,000, I do not even want to do it if it is free for my land.
Simply put, if it is more than CNY 12,000, and then we have a 30%. If it is CNY 20,000, and then also we have a 30% profit. If it is CNY 20,000 and if it is sellable, I can see the CNY 10,000 for the construction cost. Now we have another 2 basis points. Altogether, 14. Okay, we are talking about CNY 28,000. CNY 2,000 for CNY 28,000. The financial cost, CNY 2,000 will come into CNY 4,000. Also with the land cost and then 10,000 on the land cost with 14,000 and management 2 basis points. So what is left for me is approximately a huge room, which is a very ideal price in terms of the profit margin.
If under this kind of calculation that I can also reduce also all the other sales, all the management costs, and then some of the financial costs will also capitalize. It is almost like 40% of my gross margin. So this is CNY 3,000- CNY 4,000 pre-tax, which is approximately 30%. This is a kind of calculation, but if it is more than CNY 50,000 or CNY 100,000 in Beijing or even for the CNY 60,000 for the land cost, I can still have a very high profit margin. I still have CNY 40,000, which is of course CNY 4,000 for the manufacturing cost. The tax goes up. For example, if it is CNY 100,000, and then it will be CNY 10,000 for the tax, altogether is CNY 85,000. With CNY 4,000 construction, I still have CNY 10,000 gross profit. Going back CNY 20,000.
So long as my selling price will be CNY 10,000, I have done all of these business models. If it is less than CNY 6,000, I am not interested even if the land is free, if you know what I mean. For the Greentown products, it depends on the selling price, depends on the construction fee, then financial cost. Of course, you can also hedge if the capital come, then followed by the tax. This is very much like a machine. When I am looking at the land, I have already made a lot of calculations afterwards. I am talking about CNY 11,500 tax if you sold for CNY 100,000 . My management is approximately CNY 5,000 in my operation.
If I can have a very quick selling price, I can also be surprised. It takes time for the leading time. Developing speed depends on my project management. You have to realize that the investment strategy will depend on the gross margin of Greentown. As I said in my opening that give me some time, and this time next year or even second half of this year, when Beijing, Shanghai is going to be sold to started to sell or to deliver according to our profit margin, it will be gradually and greatly changed. As I said to Mr. Li, I don't care whether it's a U.S. dollar bond or notes or here in China. This is only an exchange not to upgrade our debt.
So long we can survive until sometime this year, falling on the second half of this year, Greentown China will definitely have very uprising change. This is a very promising company. I know much clear. Indeed, with the last 21 years, we have a lot of problems, disaster results. We have to expedite to resolve this and to cash in. Of course, I spent a lot of time to resolve those historical issues. Then I'm also having to expedite also on the legacy issues. Number two is starting from last year with the new projects up to now, some of them already started, some of them are already prepared. I have to force the General Manager to so tough, and there will be also managers from all over China to have this meeting. I definitely will have to expedite the process.
Number three is to have our change, and all three measures will work together with this kind of objects to be achieved next year. Then on the corporate development, at the end of the day, I know a lot of you, we've become old friends, so I wish that you should realize about what we are facing now in Greentown with a lot of good comments. We also prepared also during lunch break, we are talking about a lot of the experts. We're having transformation, and we'll also further study. We have realized some of the major developments. So Greentown is going to be a more stable operation.
Let me add one point. For all of those staying here, you're very concerned about development of Greentown, and probably you're also an investor, whether CCCG or Greentown. I really appreciate all of you. CCCG coming into Greentown have also a very good relation with the existing shareholders. Currently, Mr. Song and myself already as the Co-Chair to Chair the works on the Board as the major shareholders being designated. I'm not a full-time because I do have a lot of work in Beijing. Now for the Board meetings of the Co-Chair together with Mr. Song, he is a full-time Chair, so he knows much better in his guidance and leadership of Greentown. He's also a symbol for Greentown.
Mr. Song, ever since he has established this brand, and Mr. Cao also said in the press conference that Mr. Song, in terms of the property market, is a rarely seen talent. For the foundation, maintenance, promotion of Greentown as a brand. He has done a lot of work for the capital market, for the investors, for the media, and that is why they do care about Greentown. After having the acquisition of Greentown, it does not mean that we will have to forget all of the previous management, but we are fully elaborate the original teamwork, despite we have the strategic control by designating some of our people, by Mr. Song Weiping. His action in Greentown is still very, very critical, especially on the product, on the planning, on design, in terms of the major project investments.
He is still the core. Mr. Cao, as I said earlier, that he used to be the original major member of Greentown. Now he is also our Executive Director, by Mr. Cao, as the designated from CCCG, because he is being assigned the director of the CCCG property market branch. He is now having the Executive Director and also on the CEO. With this kind of fusion, you can see that for CCCG, this is also the SOEs and, together with also the private enterprises, this is a major exploration paradigm. It is through this kind of innovation to guarantee that the Board and together with the management team, to have a closer relation and also clear job description and to elaborate Chairman Song's core capacity, and also to elaborate Mr. Cao as the leader for his own management team.
Currently, the operation system has been gradually built in terms of the power distributions quickly and with the high objectives, which of course, it is not out of the blue, but we are talking about CNY 120 billion in 2020. This is a high objective plus our consideration, our assessment that Greentown will definitely be coming back much better. Hopefully you should be full of confidence to care about the growth of Greentown, to care about the CCCG's property development. Hopefully, we will elaborate your investment. It is just that we are having a larger shareholder. You have to trust us to let us do management. What we assure is that we are having an integrity to create a much better return. This is my last comment. Thank you.
Thank you for your questions and thank you for the answer of management. This is the end of the interview results. If you do have any other questions, you can also contact the management. Thank you once again for your attendance. Thank you.