CITIC Limited (267) Earnings Call Transcript & Summary

Good afternoon. Today is the CITIC Limited 2024 Full Year Results Briefing. [Operator Instructions] The briefing will be carried out in Mandarin. We are providing simultaneous interpretation in English and Cantonese. [Operator Instructions] And English is on channel 2, and Cantonese is on channel 3. Now I would like to introduce you the management team, Chairman, Mr. Xi Guohua; Vice Chairman, President, Mr. Zhang Wenwu; Executive Director, Vice President, Mr. Liu Zhengjun; Executive Director, Vice President, Mr. Wang Guoquan; Vice President, Mr. Fang Heying; Vice President, Mr. Zeng Qi; General Manager of Financial Management Department, Mr. Zhang Xuejun. Now we would like to have Mr. Zhang Xuejun to introduce us about the full year results of CITIC Limited 2024 and the management team will take on questions.

Dear investors, analysts and friends from the media and our friends of CITIC, good afternoon. And now I would like to brief you about the overall performance of the CITIC Limited. So one of the first key word that is we made a steady growth, which involved -- we could see financial results, net revenue, net profit and profit attributable to the ordinary shareholders. Last year affected by the geopolitical tensions and trade protectionism, global economic growth slowed. The Chinese economy also faced challenges such as the insufficient effect of the demand, weak social sentiment and underlying risks. However, positive long-term supporting factors and fundamental trends remained unchanged, facing pressures from the internal, external environment, CITIC Limited adhered to the general principle of seeking steady advancement to promote resilience. And so we have maintained steady growth. So here, we can see the revenue reached CNY 752.9 billion, up by 10.6% and the full year consolidation of the Nanjing Steel contributed CNY 57.7 billion and expansion of the existing business contributed CNY 14.4 billion accounted 8.5% and 2.1%, respectively. The profit attributable to ordinary shareholders reached CNY 58.2 billion, up by 1.1%. So let's take a look about the segment. We have the financial segment and nonfinancial segment. For financial segment, there is a recorded revenue and profit. For now financial segment demonstrated resilience. So we've established a coordinated and differentiated development framework, advancing the financial core initiatives and creating the CITIC model of 5 major tasks so we could see that 4.3% of the growth in revenue and profit and also, we elaborate more. In terms of the nonfinancial segments grew at 14.7% and contracted 2.4% year-on-year, respectively. And so here, we could see for advancement manufacturing that revenue and profit grew 0.7% and 4.6%, for advanced materials in the Nanjing Steel that actually we were already consolidated Nanjing Steel. And therefore, here, we could see that we still drove 21.7%. And we've overcame the impact of the commodity price fluctuations and reduction in iron ore production and maintained a profit about CNY 10 billion. The New Consumption strengthened market fundamental transformation efforts that was affected by the domestic auto market price war and downturn in Brazil seed market. And for New-Type Urbanisation, we've already captured quite good process. That is the 137.4% in revenue and also in profit. And so here, when we look at about a dividend payout ratio, and we've already rolled out 3 years planned for the shareholders' return plan committed to steadily increase in the dividend payout ratio. So last year, we could see that we've already made it up to 27.5%. So here we could see that actually at the end of 2024, the company proposed a final dividend of CNY 0.36 per share with the full-year dividend reaching CNY 0.55 per share. So that's a 6.8% growth against 2023. Therefore, the dividend payout ratio already reached up to 27.5%. As I recall that actually in the August in 2014, we could see that dividend paid out ratio increase, actually, we could see that's twice the amount. And so here, we could see that intra-year high of the CITIC Limited per share, that is HKD11.8. And so that's already outperformed the Hang Seng Index and also Hang Seng Composite Index. So that would be the full year's growth consecutively. And here, I also would like to touch on some of the rapid growth. The first one that is the overseas revenue was CNY 113.7 billion, and so here, we could see at the end of the year, that overseas assets was CNY 1.15 trillion, and so here, we could see that the both accounts exceeded the company's overall growth rate of 10.6% and 6.6%, respectively. And the proportion of the overseas revenue grew 1.4% to 15.1%. And so I will share with you about the performance in terms of the CITIC Dicastal and CITIC Heavy Industries because in those segments actually drive the development of the overseas business. And the second feature that is the growing technology investment so which actually laid a solid foundation for our sustainable development. So our company adhered to the innovation-driven high-quality development. So last year, the company invested CNY 25.2 billion in the technology. So we could see the R&D investment continue to be enhanced. And another key feature that is the -- we could see last year, S&P upgraded CITIC Limited long-term issuer credit rating from to A-, which is a stable outlook, so marking the highest level since 2016, and they give us a very good foundation. And now I will walk you through the business segments. The first part is a comprehensive financial services. So for this part, that actually we give a very good use of the CITIC platforms. So here, we could see the financial set to actually reached revenue of CNY 279.469 billion and profit was CNY 52.649 billion. So we have to say that we make full use of our advantage of the full suite of financial license and full-cycle comprehensive services. And the second advantage that is CITIC's innovative and collaborative resolution model led to the continuous risk deduction, and especially in the key areas such as real estate and local government funding vehicles. So that would be a very typical feature. And so we continue to mitigate the risks in real estate. In the financial service, the first one is CITIC Bank. And so we can see the revenue reached CNY 213.2 billion, the profit was CNY 68.6 billion, up by 3.7% and 2.3%. So CITIC Bank actually was one of the bank made positive growth in both revenue and profit. And so here, when we look at about this net interest margin that we could see that the annual net interest margin down only 1% to 1.77%. And for the nonperforming loans ratio was 1.16%, down 0.02 percentage point. And so here, we could see we further enhance our asset quality and resilience to withstand risks. And another one that is we have actually reached 99.9% conversion after RMB 40 billion convertible bonds, so we have a quite good capital equity ratio. And then CITIC Securities made a revenue of CNY 63.8 billion and profit of CNY 21.7 billion, so up by 62% and 10.1%, respectively, year-on-year. And so we could see that we still had a very solid industry-leading position in China, so we maintained a leading position in terms of the domestic equity and bond underwriting value, assets under custody and assets under management. And so we have to said that actually -- CITIC Securities actually ranks #1 for 19 years consecutively. And another achievement there is significant results in overseas expansion. So international business revenue grew by 16%, ranking the first in offshore Chinese bond underwriting and second, in both Hong Kong equity financing and global M&As by Chinese companies. So this part also made a huge contribution to the overseas growth. And then CITIC Trust that last year that it made a revenue of the CNY 5.38 billion and a profit of CNY 2.65 billion. So we could see we continue to optimize the business structure. So the scale of the trust assets grew 27% to CNY 2.6 trillion over the year. And so you can see that the proportion of the asset trust service encouraged by the regulators rose to 58%. And the new trusted business revenue grew 13% year-on-year as we became the industry's leader in the scale of existing charitable chart. And we also resolved underlying risks. So the asset quality of the appropriate and business remains stable. Just what we've mentioned the project in Shanghai was also a very good case. The other one is the Prudential Life. We proactively managed growth headwinds in new business and in new industry evolution. And so we are able that to have the new business value reached CNY 2.82 billion, up 16% year-on-year. And we further strengthen financial positions, and so another capital contribution of the CNY 1.25 billion from each JV partners had greatly improved the comprehensive solvency adequacy. And then we move on to the advanced intelligence and manufacturing. So last year, we made a revenue of CNY 50.793 billion and a profit of CNY 865 million. And so here, we could see that we have made continuous efforts in expanding the overseas business, and optimize the structure, which made a huge contribution to the growth. And we also strengthened critical technology research, achieve breakthroughs in key projects and won multiple national awards. And so in this segment, we have CITIC Dicastal and CITIC Heavy Industries, all listed companies. So for the CITIC Dicastal, aluminum wheel sales up 4% year-on-year and costing sales up 6.5% year-on-year. And so we made the market breakthrough that so we have already integrated the technologies. So we manufacture China's largest 7,500 tonnes two-plate die-casting machine producing the world's first higher-duty integrated casting for the automotive industry. Further improved the overseas production network, the Mexico aluminum casting facility was in full operations in 2024. While the construction of Morocco factory, Africa's first Global Lighthouse was completed in 8 month. And CITIC Heavy Industries grew by -- great significantly and have about -- grew up 28.7% with new effective orders of RMB 15 billion. And also in terms of the R&D investments, we maintain a 7% input of spending of the total revenue. So that is the part about the intelligent manufacturing. Now I'm going to talk about the advanced materials, and we are going to continue to expand the overseas mineral resource development and to enhance the connections with the upstream and downstream industries to secure strategic resources supply and strengthen the collaboration in procurement, production, sales and management, allowing two special steel companies to leverage each other's customer bases and establishing networking differentiated product segments and thereby enhancing the brand influence. So in terms of the average materials, there are 2 subsidiaries, CITIC Pacific Special Steel, last year, the steel industry suffered a loss of close to 40%. And also the profits declined by about 40% -- more than 40%. However, if we look at the subsidiaries of CITIC, they performed better than the industry. CITIC Pacific Special Steel has stable sales and realized revenue of RMB 109.2 billion, profits of RMB 5.1 billion, down 4.2% and 10.4% year-on-year, respectively, outperforming peers. And we can see that the ultra-high steel and stainless specialty steel products were up 23% year-on-year. We also strengthened the technological innovation reserves. R&D spending grew by about 0.31 pp year-on-year to 4.21% as well with 476 patents registered throughout 2024. We also deepened the AI applications in business use cases, with Xingcheng Special Steel becoming the first of the special steel industry to pass that Level 4 assessment of the maturity model of the intelligent manufacturing capacity. Nanjing Steel realized revenue of RMB 61.8 billion and profit of RMB 2.3 billion, down 14.8% and up 6.4% year-on-year, respectively. Operating performance remains stable. Core products of the advanced steel materials continued to increase in volume with the annual sales of 2.6149 million tonnes accounting for 28% of the total steel product sales, gross profit margin grew to about 1.14 pp year-on-year to 17.17%. Accelerated the advancement of the global layout actively expanded in the overseas market, with annual exports exceeding 1.5 million tonnes, up 25%. Completed the installation of a key module of its first overseas 6.5 million tonne capacity coking coal facility. The first subsidiary, CITIC Metal, a public company in Mainland China realized revenue of RMB 132 billion (sic) [ RMB 130.2 billion ] and profit of RMB 2.2 billion or 4.2% and 8.8% year-on-year, respectively. First of all, market position in the metal trading remain stable, adjusting its business structure and expanding the nonferrous business based on the market trends in particular. Scale and profit of the copper trading were up 9% and 163% year-on-year, respectively, both hitting record highs and permanent result in overseas minimum investments. Ivanhoe KK Copper Mine Phase 3 and Kipushi Zinc Mine achieved commercial production ahead of schedule and are on the way to becoming world's third largest copper mine and the fourth largest zinc mine in terms of annual production at full capacity production realized a notable disposal gain of 1% Ivanhoe shares at favorable prices. CITIC Resources realized revenues of HKD 9.5 billion and profit HKD 570 million, up 148% and 3.8% year-on-year, respectively, achieved breakthroughs in oil and gas chain and increased the trading volume of 9.5 million barrels of crude oil in 2024, completion of the major transactions and cover the entire AWC equity interest to Alcoa shares resulting in the increase of the after-tax profits. Now let's look at the New Consumption segment. New Consumption proactively responded to the market changes and also positive revenues in its leading segments, and also responded to the Brazilian seed market and the -- also the domestic auto price wars and the annual performance declined due to the Chinese domestic auto price wars in the Brazilian seed market. As to this New Consumption market, CITIC Telecom International [indiscernible]. The Macau 5G users increased by about 51% and maintain a very strong growth momentum with market share increasing to 53.3%, firmly holding up the top position in Macau's mobile market, launched 5.5G commercial services, making Macau of the first cities globally to offer the 5.5 commercial services and also further expansion into Southeast Asian markets and cooperative with renowned international hardware suppliers to provide server deployments for local customers in Singapore. And for CITIC Press realized revenues of about RMB 1.69 billion, down 1.7% year-on-year, profit of about RMB 120 million, up 2%. There are 2 points. First of all, we launched the CITIC smart publishing, CITIC responded to the sluggish publishing market and the diversion of the new media channels by leveraging AI to empower in upgrade its content, e-commerce and effectively control the overall sales cost and discount rates with a gross profit margin up by about 4.09 pp. Secondly, the brand influence also improved, so we deepened the strategic focus on animation, in comic creative industries, and strengthened the IP collaborations and maintain the leading position in China's retail market for general books, securing the leading position in market share of management, self-help and biography book about achieving 3.79% in ranking first. LongPing High-Tech also under the New Consumption segment, so we are the biggest shareholder for LongPing High-Tech and we want to stabilize the revenue. We also expanded the market of the specialized, refined and innovative and high value-added varieties in addition to the stable operation of the 3 main grain crops in rice, corn and wheats, of which the rice revenue grew by above 10%. And also Brazilian corn seeds business market share exceeded 21%. Secondly, we accelerate innovation momentum, 78 new varieties attained national approval, further improving the layout of the green high-quality and high-yield varieties, with independently cultivated Juliangyou 8612 settling -- setting a new national record for annual yield of the rice. Dah Chong Hong facing the market changes, we have further expanded the overseas market and actively expanding the export of Chinese vehicles to the overseas market, sales volume of about 100,000 unit, up 1.1% year-on-year. New-Type Urbanisation achieved revenues of about RMB 46.987 billion and profit of about RMB 5.135 billion in 2024, up 8.3% and 137.4%. We capitalized on the opportunities across the Belt and Road initiative. And also there's pressure from the real estate market and we focus on project delivery and receivables supplement and reducing provisions over the year against the real estate sector downward pressure. And segment revenue grew against downward trends. Key projects such as Jade Mansion Wuxi, Jade Mansion Suzhou and Changsha LongPing were successfully delivered, driving the property development revenue of 40% to about RMB 14.7 billion. High-quality delivery of the residential properties such as the 5 projects, including the Mansion De Verre Yangzhou, Jinlin Century Yangzhou, Jinyue Mansion Yangzhou and Jade Mansion Suzhou all exceeded 90%, demonstrating strong operational management and customer service capacity. So Construction and urban operations breakthroughs in overseas markets such as signed a batch of major projects, including the Saudi -- social housing projects in Saudi Arabia, Uzbek Highway reconstruction and also we signed contract volume 75% year-on-year to RMB 30.7 billion, and also the TKU expressway renovation project in Kazakhstan was fully open to traffic, becoming the north-south traffic artery for the eastern state of Kazakhstan. The Wuhan Jiangxia Sewage Treatment Plant and also the National Green and Low-Carbon Benchmark Sewage Treatment Plants, these are the major projects that we developed in this segment. Okay. That was my presentation. Thank you for your kind attention. Moving forward, we are going to open up the floor for questions. Before you ask a question, please identify your organization and your name. Now the first one, George?

I would like to thank the management executives for the report, I'm from [ Huai ], my name is [ Choi Lung ]. I have 2 questions. So in the economic concept, the concept of the high dividends, which had a lot of market attention, CITIC has been improving the dividend payout ratio. Last year, CITIC also published a plan for returning -- for returns for shareholders. So what are the plans for the dividend payout at your company? Secondly, and the market -- the market value also there's a lot priority given to the market value of the state-owned companies and the regulatory organizations have published some regulations about market value. In terms of the market value management, what kind of new work has your company done? What do you think of the market value of CITIC?

Thank you for your questions. First of all, let me answer your first question. CITIC attaches great importance to giving dividends and pay back to our shareholders. We pay dividends twice per year, we have stable dividend payout with increased -- stable increase. So we have been a public company for 10 years. Accumulatively, we had Hong Kong dollars dividends of HKD 120 billion and also the dividend rate would yield a 7%, so we have been quite popular because of our dividend yield. In 2024, we publish a plan for paying back to our shareholders in 2026, dividend payout rate will not be lower than 30%. In 2024, we will not be lower than 27%. 2025 dividend payout rate will not be lower than 28%. The Board of Directors also decided that in 2024, the dividend payout rate will be increased to 27.5%, increased by about 1.5 percentage points. So annual dividend yield was CNY 0.55 per share, grew by 6.8% year-over-year. It shows that CITIC Limited is committed to honoring our commitments and we will go beyond the expectations. And going forward, we are going to adopt stable, sustainable dividend policies while improving our business performance, we will also enhance our payback to the shareholders. We believe that in the future, we will surpass you -- exceed your expectations as well.

Well, I would like to take on your questions in terms of the market performance and what's our next step? Actually, since this year, we could see that the market value of CITIC Limited grew by 27.5%. So in the past 4 years, the accumulated growth point already reached 124%. So we have maintained a quite stable growth. And we still believe that there is still a room for us to improve. And I would like to respond to you based on the 3 perspectives. The first one, the CITIC Limited will seize the opportunities of the -- some of the macro policies. For example, since 2024, the central government actually has already made a visible decision that to turnaround environment. And so her, we could see there was a portfolio of the policies that being released and therefore, we could see that many international institutions have already that improved their expectation on Chinese economy. So CITIC Limited as a comprehensive company, we believe that we are able to seize those opportunities. So from the finance sector, the first 3 sectors for the 3 quarters that in China Securities and also CITIC Construction Investment that we seized the opportunities. We have already achieved the revenue that need to be down by a year. And you could see that the revenue of the CITIC Securities actually and revenue grew by 6.2% and then 10% growth in terms of profit. And so we have also have carried out effective ways to resolve the real estate risks. And in terms of the NPL of the banking system has been well controlled as well. And for example, in terms of the science and technology that in recent years that in China, that the AI technology development and application has been speed up in the CITIC Limited actually make full use of the diversified industrial application. So CITIC actually has already worked with DeepSeek and we are going to focus on more cooperation in terms of the upgrade of the computing power and the use of the AI-based application. And so that actually gives us a lot of opportunities. And so in CITIC, we could see we have the comprehensive advantage because we have the CITIC Financial Series. We have equity. We also have bonds, and we have a wide range of the financial functions. And so we are quite sensitive and keen to the market changes. And for example, this last year, there was -- they public DeepSeek and also ensure technology. So these are the company that are growing quite great. And these companies actually are within the scope of our key account. So we made quite a good return on top of that. And in terms of the consumption set, that CITIC also done a good job. For example, we seize the opportunity. For example, there was a hit with the film and animation nurture the second, and so CITIC Publishing also worked with the Nurture that to publish the books. And so our sales volume of those books already being sold up to 1.7 million copies, and all of those results are actually achieved within 1 or 2 months. So that's remarkable. So these are the favorable policies and also environments that in China. And so each segment of the CITIC Group will seize those opportunities. And secondly, that the CITIC will continue to deepen reform and improve the refined management. So actually since the year, we've already streamlined our management and operation. And so we'll keep our structure more streamlined and we will also improve defined management of the equity management, and we take on proactive approach to resolve the risks in terms of the real estate. Actually, last year, we've already lowered debt risk point by 0.7% and we could see those kinds of risk with solving process have been proved quite good. And so we already optimized our system management mechanism and also already witnessed some of the favorable results, and we also continue to control the fine management of the procurement process, we lowered the procurement cost. And we also focus on the expense control, so as we are able to ensure a very reasonable growth of the cost compared to the revenue growth. So all of these actions will make CITIC Limited that on the right check and to be more practical. And this year, we also believe that we would like to focus on our priority. So from the strategic perspective, we'll be focused on about our top line design and also to optimize our business structure. And we will focus on those resources in the financial sector and also to make deployment in terms of the emerging sectors to make CITIC more resilient and to generate more potential. And thirdly, we will continue to enhance our communication mechanism with the capital market. So we believe that actually, we have quite a complicated business majors in CITIC Limited. So in the future, we will make more efforts in terms of communications with our investors and also analysts. So when you look at our each segment, you could see that actually that in 2024, we have very good growth in terms of revenue and profit and also the credit rating. And so you could see that the CITIC Bank's revenue, net profit that actually are growing. And even for this net interest margin actually outperformed the other market players, and even though for CITIC Securities, we are making tightened pressures. But still, we maintained the growth in revenue and net profit. And for CITIC Trust, that we will continue to focus on the transformation and we could see that actually for the CITIC Pacific Special Steel, that we only have the 2% of the scale. However, we are able to make a very good growth point. And we also have the CITIC Metal, CITIC Resources in Sino Iron and these companies are developing very good. And we also will seize the market opportunities. And this year, we also make some change in terms of annual reports. We have added more detailed information and annual report. So we hope that we will help investors to better understand the advantages of CITIC Limited, so that they could have a clear understanding for CITIC Limited. And so as they could have a bit understanding in terms of the market valuation. And we also will take on the suggestions from the capital market and to put into our daily management and development. So considering the macro environment and the stable business of the CITIC Limited and high dividend ratio -- dividend payout ratio, we believe we have a big potential in terms of the market value. Next question?

I'm Haiyang Yang from HSBC. I have 2 questions. The first one, that is could you share with us what's the progress and results of the deepening reform and opening up? And the second question is about going global strategy because that in your slides, you also share about the -- in the macro environment because of the geopolitical tensions and also the protection, and so there will be some new challenges and risks. And how would you respond to those risks?

Thank very much for your question. Let me take on the first question. The CITIC is actually growing along with the reform and opening up. And therefore, on the new starting point of the deepening reform and opening up, we will continue to enhance our core competitiveness. I will share with you that 4 measures and the results. The first one that we are driven by the core projects, and we made financial sector and financial success that outperforming the market. So we make full use of our resources in financial services. And so we have built a global competitive financial consistence. So we focus on our functions and features and also these opportunities. So my colleagues already mentioned that in the banking business, we have 5 leading the market strategy. And so as that, we have already improved that in terms of the revenue, net profit, and we have proposed ourselves to make the CITIC Bank as the first-class investment bank. And so we will continue to consolidate our leading positions that our capability in serving the entities have been further enhanced that we have already made innovative financial services model that to provide full-cycle financial solutions to the scientific and start-ups. And so here, we already provide that our financial services to 96% of the those -- in specialized and innovative business in China. And we also received 12 awards in terms of the fintech development. So that number of the awards actually already outperformed the other players. And secondly, that we focus on the star supply chain project to promote the transformation of those -- steel manufacturing. So we believe that each sector that need to have its star company. And so we carry out 3 key actions. The first one, that is the star transformation in traditional industry that to focus on the high-end development, smart development and green development. We are dedicated to cultivate more leading industries in various sectors. And in terms of the aluminum wheels and also special wheel, we've already built up 3 Lighthouse factories around the world. And we also have many factories that are already been selected as the first batch of the Super Smart factory. So we believe that one company is a product. So a company as a product concept has been built on across the CITIC Limited. So we will focus on our industrial integration capabilities to focus on the more investment and also to withdraw. In emerging industries, we have a star creation campaign focusing on some new segments for development. We have put in place some highly effective strategic investment metrics and we have focused on industry research and also screening process, and we are managing a firm worth more than RMB 300 billion. We have more than 1,000 companies in our investment incubators, companies such as [indiscernible] is among the batch of the high-tech company that we support. This year, we are going to focus on technology value, technology attributes and properties and emerging domains and we show areas that can bring some breakthroughs, and we are going to have some investment in mergers and acquisitions in this segment. Secondly, we have 2 security brokerage, we have our own advantages. We are forward looking, and we're going to focus on future key equipment, futuristic materials and further improve our mechanism for industry investment and nurture stars for the future. Thirdly, we are going to have more synergy in terms of the risk management, and we work hard to reduce the risk. And also, we managed the risk in real estate and local liabilities. In 2024, we have reorganization and restructuring projects that are worth RMB 23.9 billion. For the project, we have cash return worth RMB 12.9 billion. So the nonperforming rate in the real estate and local government liabilities declined. So fourthly, we're going to deepen international collaboration, so CITIC is a window for reform and opening up. In this new time age, we would like to serve as a bridge connecting to the world. In the future, we will strive to become a rising flag in terms of implementing national strategies. Last year, we have a slogan saying that if you want to go global, you should come to CITIC. If you come to China to make investments, CITIC is a go-to brand. So we successfully organized some global events and also German Advanced Manufacturing events and then a tour in Chongqing CITIC, and CITIC Strategic East Lake investment and also, we also organized foreign companies to go to Nanjing and Guangdong province to attend the event. We would like to achieve more new productive forces to come to China. And CITIC also attaches great importance to the unique advantages of Hong Kong. In Hong Kong, we are going to accelerate the development of the quarter economy and cross-border innovation model, new productive forces epicenter, so we work in partnership with Hong Kong Polytechnic. We created an AI innovative center together, in addition, corporate social responsibility will be given priority in this region as well. We are going to give full support to our branches in Hong Kong and enhance our influence in Hong Kong and create more value in Hong Kong. Based on Hong Kong, we are going to accelerate and expand global partnership and collaboration. Last year, in 2024, the overseas project -- newly signed project value and newly effective contract value grew by about 2.5 fold and 1.8-fold. Equipment business orders increased by 80%, CITIC Securities International revenues grew by about 14 -- 41% year-on-year. Net profit almost doubled -- achieved double growth. So taking advantage of the 15th 5-year plan of China, we are going to give full play to our own potential and work on innovation and improve our functionalities and competencies. And also, focus on high-quality development space as well.

Okay. Next up, I'm going to talk about the internationalization. Internationalization has been our traditional advantage. It has been our long-term strategic orientation. Ever since day 1, we have been showing as a window to the outside world, for the past 45 years, we have been opting and principles of opening up a reform, we made international funds. We proactively get integrated into the globalization chains, we have built good order amount and put in place professional teams, we can cover the whole industry chain with our own prominent advantages. So our overseas business coverage can cover -- can reach more than 160 countries and regions. By the end of 2024, our overseas business assets and revenues both increased. Overseas assets amounted to RMB 1.15 trillion, grew by 13.7% accounting for 0.6% of the total asset, the overseas revenue surpassed more than RMB 100 billion, grew by about 21.8% year-on-year. Overseas revenue accounting for 15.1% grew by 1.4 percentage point year-on-year. Chairman Xi also mentioned that internationalization is part of our deep reform campaign based on our 40 years of experience with international development, we are going to focus on development routes and regional focus and supporting mechanisms, and we are going to have further developments in Hong Kong and Macau and further internationalization and so going global competitiveness will be further enhanced. Last year, in October, we have a slogan saying that if you want to go global, CITIC is the go-to company, if we want to come to China to make investment, CITIC is also the go-to company, and this will be our dual brand, and we are going to offer full industry chain support providing services, covering products, services and technologies and assist Chinese companies in the going global efforts. We are going to introduce more foreign assets and investment to China as well. We have different kinds of platforms and campaigns, such as the China to ESG Global Leadership Congress. At this event, we're going to talk about advanced management experience and our advanced models. We are going to enhance our international standing and influence. In terms of the regional selection, we put the different regions into different categories. And we can start with Hong Kong and Macau, which can be an important epicenter for our internationalization efforts. We're going to focus -- consolidate our financial advantages and technology innovation investments. We would like to enhance our service capacity in Hong Kong as well. So we would like to be well integrated in the Hong Kong financial sector, and enhance the CITIC's competencies and provide more services and support to companies efforts to have IPO or to issue bonds in Hong Kong. So we have to account a business such as the Hong Kong, Shenzhen Stock Exchange Connect, Bond Connect and Exchange Connect. We have different kind of services. We are going to expand the use scenarios for RMB currency as well. And also [indiscernible] Financial Holdings is going to provide different kind of supporting systems covering the equity and loan and bond insurance business as well. We're going to strengthen our competencies and competitiveness in Hong Kong as well, utilizing the RMB strength and regional geographic strength at Hong Kong, we are going to further expand the business of CITIC and focus on financial innovation and branch out that innovation to the Great Bay area. Secondly, we're going to focus on some niche market such as the Belt and Road initiative and working together with the emerging economies and developing countries and we are going to focus on high-quality development, high-quality partnership in the Belt and Road initiative. We focus on small and beautiful, livelihood projects, cross-border finance and industry supply chain, technology innovation. So we have similar kind of branch offices and representative offices in Belt and Road initiative, focusing on providing high-quality services. CITIC Construction had now has more newly effected contract value grew quite significantly year-on-year. CITIC Metals had a kind of trading plus investment model in Africa and South Africa and such as the CITIC Dicastal in Morocco, the factory was the first of its kind lighthouse factory and the South America casting factory was -- deliver the first batch of products and the CITIC environment successfully won some bidding. Thirdly, we are going to further expand in the developed economy and deepen our policies with our international partners and expand our circle of friends and partners. Last year, we organized the “Chongqing tour for German Advance Manufacturing Industries, 118 German advanced manufacturing and hidden champion enterprises joining the business matching session. We signed agreements for 13 projects contract value amounting to RMB 9 billion. In terms of the supporting mechanisms, we are going to have measures to provide support to the international talents, and we also offer some regional synergy platform, and we are going to strengthen the overseas risk management mechanisms and providing stable support to the going global efforts. That was my response. The next question.

I am a Citi analyst. My name is [ Joe Dunkin ]. I'm going to talk -- I'm going to ask a question about the industry and financing synergy and risk resolution and mitigation. So can you talk about the progress in terms of the project that your company has and also earlier this year -- and you have the first of its kind lighthouse factory in Africa. In China, we have a third factory. So we have some remarkable accomplishment going forward in terms of technology innovation and AI and digitalization are the important measures at CITIC.

First of all, let me answer your first question about the risk mitigation, risk resolution in terms of the industry and financial synergy. This is a unique industry innovation model. Through our own efforts, we have made some very good progress in terms of the synergy, we have some unique advantages. I'm going to talk about 4 aspects. First of all, we need to innovate in terms of business model. On the CITIC, we have some financial subsidiaries, and in CITIC, we have a team for giving for the risk mitigation, and we have measures to isolate risks. And we also make investments to mobilize the asset, is CITIC Bank also make investment in bond financing, and through increasing growth in this aspect, we can lead to development in other aspect as well. We also have CITIC Industries subsidiaries, they have strength in terms of the real estate sector that they can manage projects, manage the risk and they can also do the day-to-day operations, we will isolate the risk and then the mitigate the risk. And we provide services that can cover the whole industry chain by isolating risk and improving the assets creating more value, empowering brands, and then we will be able to roughly cash on our investment and increase their value of our investment. And so we could see that actually these risk reservation model is effective because we have a number of the projects already been operated under this model. For example, actually last year, the totaled asset value is at CNY 23 billion. And in that yield, we already collected CNY 19 billion back. So actually, since 2022, we've already risk reduction. We have already reduced those risk up to CNY 82 billion, and we've already revitalized nearly 70 high-risk real estate projects. And we've already delivered that 66,000 units of the house. And for example, last year that the project [indiscernible] in Shanghai actually opened for 3x and sold down for 3x. So this is really a benchmark case. And for example, that they are -- they were 106 units and then sold out. And so since 2022, that actually CITIC Bank has already worked with the CITIC Urbanization Development. And so as to focus on some of the Kaisa Group's -- portfolio group's mitigation projects. And for example, that afford the Shenzhen [indiscernible] project, which is also one of the Shenzhen based project. Actually, it has not clarified about the user right of the land, which is the legacy -- history legacy problem and lasted for 20 years. But we already put into construction. And so here, we could see that we also have made some other projects, for example, Shenzhen Mangrove Bay projects. That's already been sold out and revenue already reached CNY 3.2 billion in those home owners we're quite satisfied with the delivery. And so these kind of the industrial finance, innovative collaborative reservation model is able to segregate risks and to restructure the whole project. And so in this model, could ensure the delivery of the house and to ensure livelihood and ensure stability. And therefore, this test model has been highly recognized by the many governments. And we do believe that this kind of the model could be copy and paste in other cities as well. Therefore, CITIC Limited, we love to work with the different real estate companies and projects and local governments that to present and also mitigate risks in the real estate. And we believe that we are able to build out the CITIC Limited risk resolution model as one of the benchmark that should help more and more real estate players and also the local governments that to reduce those risks. And therefore, we will continue to make our efforts in that regard. And I also would like to answer your questions that from a 4 perspective. The first one, that is the scientific innovation is actually one of our features and innovation is a part of our DNA. In recent years that we have witnessed very solid revenue growth and innovation is one of the engine. Secondly, that you paid a lot of attention about the lighthouse. And we have already made a lot of #1 of the lighthouse. I think lighthouse factory is very strong evidence of our strong capability in productivity. And it also showcase about the leading position of the CITIC Limited in terms of the digitalization, internationalization and smart manufacturing. Apart from the lighthouse, I actually have some figures. For example, last year that actually we've already invested CNY 45.2 billion in the scientific research and development. And so which accounted 3.34% of our total revenue. And we indeed have around 110 scientific and technology achievements that already being awarded by the provincial government and the national government. And so we've already accumulated more than 10,000 valid patents. So that means we do have a lot of the profile that in terms of the scientific innovation.