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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
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compared with the counterparties in the industry [Audio Gap]
All together, it is
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The closing price -- the dividend yield
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In the beginning of this year, we have interest rate, 3.45% bound U.S. dollars. And in April this year, 4-year maturity, USD 1.3 billion bond is issued, and the interest rate is 2.95%. And this has been actively participated by the home and domestic institutions. So we have a very diversified and sustained financing channel.
By the end of this year, we have kept a good cooperation. And in the same way with over 60 institutions, and we have a general-to-general cooperations with them. The long history of robust performance has given us a very positive requirements from the rating institutions.
In the first half this year, in April, we have got the upgrading from Standard & Poor's, and Fitch has kept the investment grade, and Moody's also has a good positive result. And for the domestic, we have got the highest level that is the AAA ratings. And we also have a very stringent financial management and the strong capacity of risk management. So the executive level pay great attention to the regulatory requirements keeping. We also have a very stringent management and dynamic monitoring of all the indicators to have the assessment of all the risks.
So for the risk
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so have great achievements on the recollection of the cash, and we also allocated to the different regions and projects to guarantee the cash supply for the different projects. The headquarters also have the concentrated management and control for the cash flow and the allocation. And for the investment management, we are disciplined in choosing the approach like the investment and the prudent land acquisition. We also have the dynamic adjustment of the timing of the investment, and this is very important for the risk resistance. In the first half of this year, we have kept the green line for all the 3 sectors. And the liability ratio is 68%, exclude the receipts in advance.
The net gearing ratio is 50.9%. The cash to current borrowing is 1.9x, and the non-property development revenue to interest is 1.5x (sic) [ 1.4x ], and this is very good for the stability and the security of the cash. And we also respect the regulations and market to improve the corporate image. We have been attaching great importance to the investors' concerns as well as communication with investors, and we use the con calls and other ways to maintain the positive communication and exchange with investors.
And we also have built a healthy mechanism for the communication and try to create values to the investors. We also have better performance on the repurchase and to protect the small shareholders and to buy more for the big shareholders. And also, we pay great attention to the yield and return requirements from the investors and to demonstrate the value of the investment. We also have got honored because of this. We have got the Honored Company from the Institutional Investor, and we are the nominee for the Best IR company in the Greater China by the IR Magazine Awards.
And now I will report on the ESG, please look at Page 11. Shimao pay great attention to ESG. And when we realized the financial performance, we also pay great attention to the social responsibility and try to get the sustainable development. The green building is very important for the carbon neutrality for the construction industry. We pay great attention to the sustainable development and build green buildings, green communities, and to enable the sustainable development for the community.
By the end of this year, the total area of green buildings developed by Shimao has reached 393 buildings and with the area of 73 million square meters. We are at the top and leading the industry, for example, like Hangzhou Shimao Wisdom Tower, who got the recognition awarded by the LEED+WELL certifications, and we can serve -- or we can save the carbon dioxide emissions by 3,297 tons. In the future, Shimao Group will continue on this path on green technology development and promoting the granting of green projects so that we can reduce -- we can save energy for high effectiveness.
Next page, please. And with great love, we will pay back to the society. So we devote ourself into charity business, and now dedicated to charity for over 20 years with accumulated donations of more than CNY 1.75 billion and over 22 million beneficiaries, contributing as always to targeted property alleviation, cultural protection, harmony in Hong Kong and other sectors. And at the end of July, there was flood in Henan, and we have donated HKD 20 million to the whole noble cause.
Next page, please. And continuously, we enhanced the ecosystem of anticorruption. We are 1 of the 10 founding members of China Enterprise Anti-Fraud Alliance, and we have established the risk management system, internal control system, internal compliance system, a whole series of anticorruption system to -- for the supporting of the company's development.
And the -- I would like to [indiscernible] for the results review and ESG. So Mr. Shao, you have the floor for the business review.
Dear investors, good afternoon. So I would like to report to you about the future outlook and the business review, 4.1, on Page 15, please. In the first half, we have a steady development with sustainable quality growth, contracted sales reaching CNY 152.8 billion, with a Y-o-Y increase of 38% and higher than the top 10 average. The contracted area is 8.610 million square meters, with a Y-o-Y of 37%. The cash collection is CNY 116.1 billion, with a Y-o-Y increase of 30.4%.
Next page, please. And we have a very good starting with acceleration in the first quarter compared with Y-o-Y. We have had good performance in quarter 1 and quarter 2, and the sell-through ratio is more than 50%. By the end of June, we have already finished 46% of the annual target and with 11% higher than last year. So that has a good foundation for the CNY 330 billion target of the whole year.
Next page. In terms of empowerment, we have signed projects in Jiangsu and Shanghai Special Region with a contribution of CNY 32 billion; and Zhejiang Special Region, 30 -- with a contribution of CNY 30 billion; Straits Special Region, CNY 60 billion contribution. So 3 core special regions accounted for 80% of the total sales, which drives the fast development of the group. And we try to have further development in first and second tier and strong third-tier cities, altogether accounted for 90%. Same as 2020, the top 15 core popular cities contributed RMB 85 billion in sales.
Next page, please. Well-crafted products and pressing for quality and improving operation efficiency. And this year, we have adhered to the product-oriented philosophy and continued its research such as like Beijing Shimao Sanli Mansion. So on rebuilding this project, we have reached ASP over RMB 130,000. Shimao Beijing Honor of China, and we have built integration of technology and lifestyle with sales of RMB 5.5 billion. And in Hangzhou Classic Chinese Chic sales, in the first half, our sales achieved RMB 2 billion.
And through -- we have created a synergy among all those projects. The company also accelerates the turnover of popular projects to pursue greater contributions to the results like Hangzhou Classic Chinese Chic; initial sale in 7 months, we've sold out in the initial sale, with second round offered in the same month. And another project, Shanghai Natural City, sold out in initial sale, recording a daily sales of more than CNY 2 billion, rapid cash collection of more than 50% in 3 days. And we have also Wuhan Endless Future and Quzhou Classic Chinese Chic with sufficient supply. We have achieved more than CNY 2 billion in sales, which have a good foundation for further development.
In terms of the investment in the first half, Shimao acquired 19 parcels of land, with total land cost at approximately CNY 20.1 billion, covering a GFA of 3.01 million square meters and a 62% of sellable value of newly acquired land located in the first and second-tier cities. And the proportion would surge to 94% if strong third and fourth-tier cities are included. So in this way, we can make sure a robust development and increase of the business.
Next page, please. In terms of land bank in the first half, we have high quality in land bank and a stable landmark. And in those core cities, up to the middle of the year 2021, we have achieved the value at over CNY 1.180 trillion to meet growing demand in the future. So that provides us a great support. And we focus on -- keep on focusing on the -- along the coastal area and deep development in the core cities. And right now, a large -- 74% of land bank are located in the first and second-tier cities. And most of the resources are in the Yangtze River Delta and Greater Bay Area.
Right now, we have property under construction, 50.7 million square meters. And altogether, the land bank is accumulated at high quality.
The future outlook. In the second half, our -- we predict that the resources will be around CNY 360 billion, so we can realize a CNY 330 billion on targets of the whole year. So our -- in the second half, our -- the saleable resources will be largely increased with a good layout, and that will be mostly in first-tier and second-tier cities with great saleable resources and value. So that provide us the advantage. The residential will be 72% of the total. And for residential complex, these resources will be in those hot cities, popular cities. These 1-year or 2-year new resources would be CNY 270 billion, which accounts 75% of the total. So in the third quarter and fourth quarter, we're going to have a half-half proportion so that the second half will have a fast development as well.
In the second half of this year, in Greater Bay Area and [indiscernible] Area, those core cities, and the value will be more than 270%, which accounts 45% of the second half volume. And we have got launching projects for the second half. And the dividend of the land bank will be launched, and that will pay the foundation for greater development zone. Also, I would like to report to you up to today, we have calculated that this month, our number is around CNY 25 billion and with accumulation of more than CNY 200 billion. So we will have a very good performance for the whole year.
Shimao Services. In the first half, we can see that the revenue increased dramatically with a Y-o-Y increase of 171%, reaching CNY 4.234 billion attributable profit to parent with Y-o-Y of 136%, reaching CNY 578 million. For contracted GFA, reaching 239 million and with a Y-o-Y of 91%. The accelerated development of Shimao Services is funded by the Shimao Group. For us, the project is stable. And the ASP of third-party bidding projects improved and the retention rate is nearly 100%. Customer satisfaction rate outperformed to the industry peers, and we continue to improve the bid-win rate. So all those are good indicators for Shimao Services, and also a good help for the whole group in development.
Shimao Commercial. In the first half, Chengdu Shimao Festival City and Xiamen Jimei Festival City, all opened. The occupation rate is both 100% with the opening rate, one more than 95% and one more than 98%. So those landmark projects are launched.
Next page, please. In terms of the hotel business in the first half, we have Hilton Changsha Riverside opened for providing better quality service to the customers and so that we can have diversified development trend.
That is for my report, I would like to give the floor to Jason for the conclusion.
So in the conclusion, I have several parts. First of all, about the market review and the industry. In the first half, the country's sales of commodity properties reached a lot of highs, a record high of more than CNY 9.3 trillion. We think the second half year will drop a little bit. Last year second half also had a large base. So we predict that the sales for the year are expected to make history by third party by surpassing CNY 18 trillion. And in terms of land, we see that we have a 22-city land projects. We didn't buy a lot of land in the first half. This -- and they predict that maybe 60% will not make too much money. So we need to be very prudent in land acquisition. And because of the high price of the land, the government has issued a lot of regulations on controlling the land, and there's a game change in the -- game rule change in the land acquisition. So in this way, we want to be very prudent. And we also, well, in large -- the investment. The first half, we invested -- or until August, we've already invested CNY 70 billion to CNY 80 billion.
On the financing side, as you know, the financing of real estate companies and mortgage facilities continue to be tightened. We've got great mortgage facilities and financing quotas. As you know that the houses are -- for inhabiting, but not for speculation. So these are the rules, and we are fully prepared to echo with the government's rules and regulations. And right now, we are shifting ourselves from attack to defend throughout the transition and refining sustainable operation capability. We shouldn't only focus on the growth rate, but we need to run this business sustainably in the long term.
So we have strengthened the headquarter-to-headquarter cooperation. And in terms of cash collection, we have strengthened the assessment. At the investment side, we've been more prudent and strict assessments, and we have equity core partnerships. And we have got a very good strategy, which is a giant aircraft, which is the highlight for the first half as well. So these are the important indicators. Contracted sales increased by 38%. Like Mr. Shao mentioned, these amounts, we're going to achieve more than CNY 200 billion contracted sales.
So we also can see from July to August. We have seen the correction. It is also because of the epidemic. The gross profit margin is 28.6%, which is the -- above the average level because there will be a decrease in the coming months, and we can keep it in lower reduction. And our dividend per share is very high. It is nearly 9.45%. And the 128% of revenue growth is a very big highlight of our results.
And in the correction in the industry, we also pay great attention to the robust development and to focus on the brand building and the product improvement. We also have the assessment criteria changes. Besides the contracted sales and the collection of the cash, we also pay attention to the account receivable for the inventories, the optimization and also the -- down to the frontier development.
We also have the mostly assessment and the following up of the indicators so that we can strengthen the management cooperation and coordination with the local branches. We also pay attention to the optimization of our property and assets and have a stronger improvement on the collection and the cash flow keeping. The non-property revenue is 6.6%, with the hotel improvement of 140%, and the commercial 143%. So for the whole year, we will have the goal realized, which is surpassing CNY 15 billion.
For the non-property development, it will be nearly 10 percentage points. And in the future 3 years, we hope that the increase can be 20 percentage points. This can help us to defend ourselves on the cyclical decreasing. We also have a cluster of the listed companies. So the Hong Kong 873, that is for Shimao Services. And we also see the growth will be in the future 3 years of fivefold. That is the goal. We hope that we can realize that goal.
So the service, it is improving its value-added services, and the college campus logistics management. The city services, also the acquisition in this field, we can see further improvement. For the Shanghai Shimao, it is for the commercial and office buildings. It has got a lot of great projects. Three more TOD is added. And in the coming half year, we are looking at the future TOD projects. It is also looking at the third-party and the light-asset development. So for the commercial building and the sales services as well as the hotel logistics, we will have further attention and resources put on it. I believe that this will bring more contributions.
So as a summary, the robust development, disciplined acquisition and the operation and also for the high-quality development and the down-to-earth and refined management, the social responsibility, as mentioned by Madam Tang, the ESG and the charity and also to pay attention to the welfare given to the marginal groups and the vulnerable groups in the industry. So change the life and bring better life is always a go.
Thank you, Vice Chairman, Jason Hui. And if you have any questions, now please use the telephone to raise your phone call question. And we also can see many people to the chat box. And please keep your question number within 2. Thank you.
[Operator Instructions] So the first question, that is from Eric.
Eric from CICC. So I am Eric from CICC. Chairman Hui, congratulations to the great performance in the last half year. So I have 2 questions. First is for the market and the policy for the forecast. Shimao in the previous cycles have a very sensitive observation and swift adjustment according to the policy changes. So what's your observation for the future for this round policymaking? And what's your countermeasures? And for this question, I also hope to get Jason's elaboration based on the environment for the policymaking in the future several years. What's your strategy for the sales improvement in Shimao? And will there be any influence from the policy, for example, to the acceleration of the positioning and ranking in the market?
And second question is that to realize the goal of growth and looking at the current land supply environment and background, what's your policy of the land acquisition? I noticed that in the first half of this year, you are not very aggressive. But now with ample cash flow, will there be changes on the land acquisition? And will you be more aggressive? And for the expected gross profit margin compared with the current good policies, what's your observation?
There's 2 very important questions. From the market and policy perspective, we see that the regulation is more stringent and frequent. It is also related to the concentrated land supply. The executive level hope that -- I believe that the country hope that the land price can be stabilized, but this expectation is not realized. So we will see the pressure on the price increase will be continued. But the generation -- the general direction is still the housing for living, not for speculation. But we see that the policy assessment and the controls will be on the maybe second round of the land supply, and that there will be the rules changing.
And maybe the bidding based on the quality will be carried out just following the cases in Beijing. So generally speaking, the policy will be more stringent. And it is also probable that there will be a losing in the end of this year because the industry is facing the pressure and the mortgage is also facing stringent control. So we will need the advanced countermeasures. Like Madam Tam has mentioned, we will need to do something on the quota for the mortgage and the headquarter-to-headquarter cooperation.
So we hope that we can get more quota, and we also hope that we can get more support from the local banks. But I believe that healthy allocation and the cash collection are very important. So it is also probable that the investment will be made when we face good opportunities. For the high growth, we have a land bank which is CNY 1.2 trillion. We also have a renovation land. It is enough for the future 3 to 4 years' development. So we will not have a very tight goal for the land acquisition.
In the first half of this year, we participated in more land bidding. But in this year, the rate of collection is lower. In this year, the concentrated supply amounted 60% is not making profit, they are losing money. It is not necessary for us. And for the land acquisition, will that have influence or the impact on the gross profit margin? So in the second half of this year, we also can see there might be some opportunities.
In the first half of this year, we have acquired like CNY 30 billion land for the strong Tier 2 and Tier 3 cities. But for the whole year, it is hard to predict because the second round of the land supply still has many own expectancies, but we will keep our eyes on it, try to invest when there is good opportunities.
And for the gross profit margin, if it is not rational enough and we cannot get enough gross profit margin, we will be cautious. The prediction made by a lot of listed company is at about 20% or maybe 25%. But we will see in the future years, 3% to 4% of the decrease is foreseeable. We may not likely to keep it grow, but we hope that we can get a high level as an industry benchmark. If the average is decreased by 3% to 4%, we can decrease within 2%, that is also good, and we will keep the quality of our products. And the non-property investment will be an opportunity.
The gross profit is also rising. And for the service and for the hotel, the gross profit, it is about 30%. And for the commercial and entertainment, it is even higher. So we believe that in this cycle, especially for the stringent policymaking, this will be a possible results highlight in the future 3 years. So we hope that the increase will be about 20 percentage points.
Next question is from Citigroup, Ken.
Dear leaders, and Jason, thank you for this opportunity of the question raising. So first, I want to ask about the land acquisition because a lot of our clients are paying great attention and your future strategy for the land acquisition. And you have a lot of channels for the land acquisition. And for the M&A market, in the second half of this year, will that be influenced by the Three Red Lines? And what's your forecast for the future opportunities in the public market?
The project with a price higher than the bottom line by 15% is not likely to be obtained. And for your acquisition, will you see the increasing of the land acquisition so that we can see a sustained growth of the return in the future? And also my second question, that is about the dividend per share. For the whole year, will that be a continued trend? So for the whole year, will you keep steady to 35%? And now the share price is low, will you see a repurchase at this price level?
Okay. Yes. I noticed that many of you pay great attention to the land acquisition. In the first half of this year, we have participated in a lot of bidding. We have over 20 bidding in Hangzhou as a single city. But we didn't get it in before the 22 cities. In June this year -- I mean, in January this year, we obtained a very good opportunity in Hangzhou. So there will be good opportunities, but we need to be patient enough.
In the first half of this year, we got 19 parcels of land. And over 10 is through the cooperation M&A. Maybe because we got those lands at the end of last year. At that time, we thought out with the expenses. But after the first round of bidding, we started to think, oh, it's not really that expensive. So we cooperated with some other people -- other parties. So I think in the second half in M&A or in cooperation, there are still opportunities.
But of course, we have a large renewal project and large land bank. So next year, the first renewal project in Shenzhen will be in sales -- will be starting to be sold in the market. So there are different channels for land acquisition. Right now, we are talking with those technology companies about some industry introduction. So I think there is a diversified trend for the land acquisition channels. And in July and in August, we have already improved to CNY 10 billion on land acquisition. And some land bidding has been deferred, and the rules has been changed.
First of all, you need to get a number first or the entry number first. Like in Wuxi, altogether, 60 participants, but only one got the number. So the probability is not very large in Zhangjiakou, and we didn't get one number. So you mentioned that this may improve our operational cost. So we need to calculate the profit.
If the profit is lucrative, we will actively participate in the bidding. But if the profit is not good, and then we need to focus on our gross profit margin for long-term consideration. But there is opportunities. And you also mentioned about dividend and the dividend yield in the first half, that's around 35%. For the whole year, we hope to sustain our target.
So for the whole year, I think the profits will definitely increase. If the profit increases, and then the dividend will increase as well. So this is the way how we actually pay back or how we can make our commitment to our shareholders. As you mentioned that the stock price right now is cheap, and we've already done some repurchase. And at this level, maybe there is still opportunity for further repurchase from the company.
Next from Mr. [indiscernible] from [indiscernible]
If in the second half, the market is not good, the sales speed is not good. And then how would the company respond to that with flexible pricing or leveraging more sales channels? And the second question is that from the company's perspective, in the long term, the gross profit margin bottom will be around 20% or will be even lower than 20%. These are my 2 questions.
To your first question, which is a very good question, whether we have had a long-term preparation for the downward trend in the market, of course, we have our preparation. First of all, we are closely taking a look at our sales in July and August. For the whole industry in July and August, because of the regulation, there is a downward trend. And together with the pandemic issue spread, and July and August is supposed to be the button for the whole industry development.
So in -- from September to October, we have prepared a lot of projects to have a spring. So just now we mentioned about the mortgage, and there the demand is around CNY 100 billion, but we still have a gap. So we are improving on those down payment optimization structure. So in terms of price, we're going to dynamically adjust on the price. And the focus is not only on property sales, but we also have some big scale assets with different types.
We will prioritize dealing with some core assets. And in the first half, we have traded around CNY 1 billion on the core assets, but we also have some long core assets treatment projects, which might be around 5 to 6 years. So there are some institutions approaching us on those core assets, but we are asking for a high price, maybe they need 5% to 6%, but will only provide 4% to 5%. So just to echo with what Ken said, maybe the dividends will be even higher because the disposal will bring us high profit.
Well, just now you mentioned about gross profit margin. The first round of bidding, as we mentioned, 60% is not making much. So of course, the gross profit margin in the industry will have a downward trend. And also, we see the raw material cost increase in the market. Then for the industry as a whole, I think GPM would be averagely about 25%. And this year, the GPM will be even lower, from 25% to 20% or 21% to 22%, around [ 4.3 rise ] in the next 2 years.
However, our GPM is higher than the industry average. If the industry decrease 4%, then I think we will strive to achieve 2% decline. So right now, our GPM is 28.6%. So we think in the next 2 years, we will sustain a high level. Maybe this year, the decrease will be small, but we -- definitely, we will be in line with the market trend, well, because we have a good cost control and good land bank reserve, and then that will be supportive to our GPM control. So thank you for the question.
Next from JPMorgan, Ryan.
I have 2 to 3 questions. First one, I want to ask you about the land acquisition. The market, right now, price is at a high level in price. So if we take a look at other competitors, how they echo with the this situation, they speak to renewal, especially in Pearl River Delta area. So that defined our sellable resources. And secondly, in terms of the operational capabilities like commercials or like other sector business, we need to further improve our capability in those sectors.
So from those 2 angles for Shimao Group, in M&A or in land acquisition, maybe in the middle term, there is no good way for Shimao Group to reach a high level or high increase level. But if we review back, will Shimao Group starting from now, to build a medium-sized property development for that or TOD? And also in renewal, whether we're going to have a deeper development in city renewal so that we will have more opportunities in the coming future. And then that, we can look out our own way of faster growth with comparatively good GPM so that we don't need to follow on the industry's downward trend.
The second question is that, in commercial sector, what is our strategy? Because in commercial, Shimao Group, we have our strong commercial sector. As Jason mentioned, 2 to 3 years ago, we have acquired a good quality land for commercial properties. And -- but with maybe in the industry, some competitors don't have a very quick turnover. The turnover would be in the industry around 2 to 3 years, maybe they have 15 -- 10 to 15 shopping malls in 1 year's time. So I want to know what is Shimao Group's strategy in commercial sector.
Another question is that in the industry, as we know that some players, they are -- have some spinning off and separate listing with a high PE ratio. So the price is not good. We know that we have a spin-off plan for a hotel separate listing. So right now, I want to know what is the progress and how the spin-off going to happen? Apart from the repurchase from the company, I also want to know that whether the largest shareholders will have a privatization idea?
Well, altogether, you have 4 questions, okay? So land acquisition, I agree with you that the land price right now is at a very high level. Well, if through bidding in the second round, if the selling is there, but the profit won't be high. Right now, in land acquisition, I think there are diversified channels. In the first half, we have got 19 parcels. More than 10 of them are in cooperation with those small- and medium-sized developers.
And you also mentioned about those Greater Bay Area renewal projects with saleable resources of more than CNY 200 billion. And those projects will be in the market next year. And you also mentioned about the TOD projects, we have more TOD projects. This year, we have 3 priority TOD projects already in Hangzhou, Ningbo, are of good location and good quality.
As you mentioned that Shimao Group, we have a lot of big-size complex, well, not as many as you think, mainly in [ Quzhou ], Zhejiang and Nanjing, 3 big complex. Every year, the 3 of them contribute to the total sales. However, the turnover would be around like 5 to 6 years to digest, which is different with the TOD project with short turnover. And sometimes, the term is only 2 to 3 years so that the turnover can cover the land acquisition cost.
Right now, we have altogether 10 TOD projects, among which 2 to 3 are those big-size or big-scale TOD projects. So I think we have -- we will have high investments in TOD projects in the future. As I mentioned, together with some high-tech companies, we are discussing now introducing high-tech companies so that we can acquire the land at a reasonable price.
Just now you mentioned about those big-scale or high-level complex or buildings, the numbers of the projects are not too many, but the investment is huge, but we are speeding up on the sales first. Right now, in Liancheng, all the residential properties have been sold out. Right now, we only have some apartments. Every year, we can have a contribution of CNY 5 billion, and performance is also good in Zhuhai.
And hotel business spin-off, as you mentioned, is difficult. In commercial sector, there are some kind of spin-off with very good return. The hotel return is comparatively low. But right now, we are taking another path, which is using a light asset way for the separate listing. Right now, we have managed on behalf of the agencies for more than 100 projects. Right now, we are discussing with some institutions on first year, location hotel and commercials. But as you know that our asking price is always very high. But maybe if we make some compromise and then in dividend yield, or in -- we can improve as well. And just now you mentioned about how to maintain the value, there are several aspects. First of all, we need to give good performance to show the market so that they will have absolute confidence.
Well, if the stock price decrease dramatically and then we will consider repurchase. And thirdly, in asset optimization, we hope that we can go further in this sector so that we can improve repurchase or improve the dividend so that investors will be happy and they will find the great value in Shimao Group, and they will notice that we have some core high-quality projects. So this is our up-to-now plan. So thank you, Ryan, for the questions from JPMorgan.
Our next question raiser is Chloe from Morgan Stanley.
My name is Chloe. I'm from Morgan Stanley. I have 2 questions. First is for the, altogether, getting better off. So will that have an influence on the profitability of Shimao? And will the influence the strategy for the future development? And another is for the off-balance sheet. And the central government having the requirement on the off-balance sheet and the debt and also for the trust and other channels and also M&A for long time. So this will be a policy for a long-term cycle. It is now still under discussion. I don't think the impact will come very soon. So for the real estate, the long-term goal for the government is to stabilize the house price, the land price and the expectation on the price. So this will not be changed. And it is the same for the housing for living, not for the speculation. And for the property management, will there be influence on the ASP?
Well, not necessarily, the property management also can have value-added services to improve the quality of the service, and there also is an opportunity for the rise of the ASP. So we strictly follow the government policy. So for the real estate, I don't think there will be a very sudden and immediate impact. And the government regulation is a new normal for the real estate. We need to get used to that, and we also need to adapt ourselves to it to improve our business. So Madam Tang, could you answer the second question?
So for the off-balance -- so for the separate balance sheet cooperation like the joint projects and also the cooperation with other companies like the Financial City and the Asian Games City in Guangzhou and also the projects in Beijing, these are the big projects. So we don't have that off-balance. So it is also -- all of them is in the structure of the listed company. And we have stopped this commercial off-balance debt that is about CNY 4 billion or CNY 5 billion. And for the trust, so it is limited within the projects like the complex of big scale.
In the sales and operations, as mentioned by Jason, we will have a regularized monitoring and regularly put them into the balance sheet. So generally speaking, I believe that our financial structure is rational and healthy.
Next question is [ Raymond ] from the [ Galaxy ].
And Jason, yes, I will raise a question for a lot of investors. In the future 2 or 3 years, what is your prediction of the profit? You mentioned there will be double-digit growth so for the guidelines? And will that be cut with a background like this? And the domestic market is quite challenging in Mainland. In Hong Kong, there is a big project. Can you update the progress of these projects, the price and interest rate for that project?
So for the profitability guideline and prediction last year, so we hope that it can be as high as 10% every year. In the first half of this year, we have realized this goal. And for the whole year, if we can obtain the sales goal, currently, we have got CNY 200 billion. For the whole year, we believe that we can achieve that goal. And yes, it is the possibility that the gross profit margin will be reduced, but we will have other opportunities to see whether or not we can stabilize our expectation on the profitability.
In July this year, we have increased CNY 10 billion investment. We are also looking at the good opportunities in the fourth quarter of this year. We will be rational in the participation in investment. So for this, we don't have changes on our expectation. And you mentioned our project in Hong Kong, we have 3 projects. One is a hotel, which is in operation. Another is a commercial product that is CNY 30 billion. For the whole year, the sales will be CNY 10 billion. And another is in Kowloon, and the total is CNY 25 billion.
And maybe in the end of this year or no later than the first quarter of next year, we will start the sales. The land value is low. So we are looking at the price in the market. Now we are optimistic because the price in Hong Kong is stable and rising a little bit. So we have high expectation on that project. Maybe in the end of this year and in the first half of next year, when it opened, we will see this will be a great contribution to our unit price because it has a very good apartment complex. It also has a low density part, which is more profitable.
Okay. We can have opportunities for 2 questions. So all investors, please raise one question so that we can have 2 investors. So next, please.
So our next question is from Eric.
I am from Bank of America. So as mentioned by Jason, it is probable that the policy will be loosened in the end of this year. But now the fourth quarter is approaching and the strategy in the market is going to defend, so will there be -- will that be quite conservative? And second question is that for the sales in the market for the next year, the investors may have concerns on that. And it is not quite clear prediction. Will that be the reason of the conservative policymaking? And is that probable that will there be a aggressive changes? And will you do that when getting some hint?
So this question is about the strategy changing. A good question. Thank you. So it is related to the policymaking from the central government. So the reason why I said that we will change our key tone to the defend, it is because that when the sales is right, when the sales is good, there is the policy changes on the land supply on the market and also the price regularization. Previously, it was not that stringent. And now we can see that controls the price and on the certificate issuing.
Now we need to wait. Maybe there is 4 months ahead. So we will see whether or not there will be a less stringent policy control. I don't think it will be very loose because it is assumed in the trend that the -- it is getting more and more stringent. And when we see the signals of policy getting less stringent like more quota given to the market and also the land supply, and we see a rational trend in the market. We will be more aggressive. So I should say that we will need to be active, but rational.
And you also mentioned the pressure of the sales in the next year. If we see it is CNY 18 trillion, it will be the highest point in the market. Whether or not there will be a correction in the next year, I am not sure. So the first half of this year, we will see the progress is very aggressive. Probably, there will be a correction and a cool down. But next year will be more than CNY 17 trillion, and it is also very high. And probably, CNY 18 trillion, I'm not sure.
But when it is too high, there will be policy corrections as well. So we don't like to see the fluctuation in the policymaking, but we hope that the market can be rational and more stable. And we will keep our pace rational and stable as well.
From [indiscernible], Security International.
I have 2 questions. First is that you have a large acquisition by now for the land. So for the equity ratio, what is the current situation? Because currently, it is a decrease, if you look at other developers. So my first question is for your equity ratio. And the second is, if the land acquisition is lower, will that have influence on the sell-through rate for the next year? Because what we saw is the inventory will the sell-through rate lower further? So what's the first half year's sell-through rate?
So for the first half of this year, we have acquired over CNY 20 billion. And when we look at the sales, it is lower than 15%. The government requirement is 40%. So for companies at scale like ours, we will have -- we are expected to have CNY 50 billion, but we only had a half of that, but that is because of the high price. But we have another CNY 10 billion this year, and the total is about CNY 30 billion. And the equity ratio is about 60%. It is kept stable.
And that we also have some others 100% and cooperated with other companies, the dollar companies, the TOD. And the sell-through rate for the first half of this year is about 64%. If -- for the second half of this year, we will need to complete 49%. And for the next year's sell-through, we will keep it, in the long term, over 60% and look at the next year's planning. If we can realize above 60% or maybe 64%, 65%, our next year's sell-through rate will be very good because we have good quality resources and then also for the land bank.
Thank you very much. And also, thank you, our executive level. If you have following up questions, please feel free to further follow up with our IR team. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]