Our strong set of financial results for FY2016 is a reflection of the execution abilities of the Group's management team as well as our disciplined and steady strategy in land acquisition.
In FY2016, revenue increased by 33.6% to RMB4.8 billion. The revenue contribution by property development projects is shown below:
The improvement in performance is primarily driven by an increase in gross margin and higher selling price of property units handed over. Although the aggregate GFA sold and recognised decreased by approximately 26.0% yoy in FY2016, the average selling price ("ASP") increased by 79.0% to RMB 14,290 per sqm. This translated into a strong improvement in gross margin to 19.2% in FY2016, from 8.3% in FY2015.
The Group also achieved healthy pre-sales of RMB4.6 billion for our ongoing projects in China and Australia. Pre-sales GFA for the Group's China projects increased 15.0% yoy to approximately 435,119 sqm in FY2016 with an aggregate consideration of RMB4.3 billion. This was achieved despite the cooling measures imposed by local governments throughout China in Q42016. Our Australia projects were also pre-sold with a total aggregate consideration of AUD60.0 million (RMB300.0 million) in FY2016.
Going forward into 2017, we will focus on two key strategies which include: i) Scaling within China; and ii) Expanding the fund management business beyond China. In China, we remain focused to scale up and tap into cities that are still growing. We are positive about the prospects in these growth cities and are targeting to achieve RMB10.0 billion in advanced receipts in 2017. With respect to our fund management business, we intend to expand its activities beyond China which will allow us to more effectively grow beyond our property development business.
In the longer term, we have set an internal target of annual earnings growth of 30-50% over the next few years. This will mainly be driven by our business within China, to achieve presales receipts of RMB40.0 billion by 2021. We believe that CWG is poised to be a strong growth company.
The improvement in our gross profit margin in FY2016 can be attributed to appreciating land prices of our land bank. In the past few years, we have invested into sufficient land bank for our projects in Suzhou which were completed in 2016, with some to be completed in 2017. As we know, land prices in these areas have increased rapidly since and this has translated into better margins for our Suzhou projects. In addition, many of our low margin projects are behind us, with the exception
of the last phase of Xuancheng Chiway Top Town to be completed next year, and the balance of the land bank we have in Xuzhou. As a result, projects due for completion or those to be launched, barring any major disruptions, should offer better margins and improve our bottom-line earnings going forward.
In China, when we acquire a parcel of land, a small portion of the land acquisition cost is financed through internal cash, and the rest through mezzanine financing and shareholder loans. As such, each land acquisition for a new project will increase our debt burden significantly. However, land acquisition debt typically stays on the Group's balance sheet for up to nine months before it is discharged by advanced receipts collected upon launch of the project. Our higher debt ratio for FY2016 was attributable to our acquisition of six new land parcels in Hubei, Jiangsu provinces and in Sydney, Australia. This has been our largest land bank acquisition in a single year, and is necessary to position us for the targeted growth we have earlier announced.
However, we do not see this as a huge cause for concern. Once the projects are launched this year, and as advance receipts from pre-sales are received, our debt ratio should decrease rapidly if there are no further land acquisitions. We are comfortable that our debt ratio is manageable as we have consistently demonstrated over the years our ability to manage it.
That being said, we are actively looking at ways to improve our capital structure by exploring various equity fundraising options and by reducing our debt
As a property developer, it is imperative for us to adopt a disciplined and steady land acquisition strategy in order to sustain the growth momentum. Last year, we entered the new market of Wuhan with two projects, Wuhan Chiway Lakeside Palace and Wuhan Chiway MOMA Royal Palace. We are confident of the Wuhan market for several reasons. Wuhan has been one of the fastest growing cities since 2015. In 2015, resident population reached 16.6 million, with net inflow exceeding 2.3 million. Some of the reasons for this include:
Wuhan has the highest student population, just behind Beijing, with more than 79 institutions of higher learning and close to 1 million in total university student population
Wuhan is at the central of transportation links, connecting it to all parts of China. Wuhan connects with Guangzhou, Chongqing and Beijing via its high speed train system. It is the busiest port on the Yangtze River, controlling both upstream and downstream river traffic
Wuhan has some of the biggest industries in China. Today, the five largest industries exceeding RMB100.0 billion in revenues in Wuhan are:
The other key market for land acquisition last year was Suzhou and its vicinity. Suzhou has been our core market since our inception, and we remain confident of the opportunities in this region. Last year, we bought a 34,180 sqm site in Zhangjiagang, Suzhou and two sites with a total land area of 85,282 sqm in Wuxi.
Economic developments and opportunities in Suzhou continue to attract internal migration. There is also demand generated from upgrading due to increasing affluence amongst the population within Suzhou. Specifically, in some districts, aggregate demand has been exceeding supply of residential units. We have selectively acquired land in these areas for our projects.
We expect the delivery of six projects, with a total saleable gross development value of RMB5.5 billion in FY2017:
Rest of China
Projects that are planned for launch in FY2017:
Rest of China
We plan to establish an investment property holding arm which generates recurring income streams from both management fees and property rental to provide earnings stability to the Group.
To date, we have achieved good progress in the expansion of our fund management platform. Our fund management subsidiary, Richmont Capital has successfully launched a total of eight funds, with a total fund size in excess of USD100.0 million, with the proceeds of four of these funds going to support our international expansion. In 2017, we will continue to expand and scale our fund management business beyond China, and transform our property development business into a fee-based business by capitalising on external funds for our property development projects, particularly in the international markets.
In the educational asset class, we are also making good progress. We believe that our expertise in the education sector, where we have a strong track record of building education campuses and international schools in China, will provide us with a competitive advantage. We are currently reorganising our educational assets across the broader group into a single platform so that we can invite investments to scale up further. We hope to complete this within FY2017, subject to regulatory
We intend to undertake more property projects outside of China in the next five years to increase the financial contribution from international projects. This will provide the Group with a diversified stream of revenue and earnings.
We have identified developed markets such as Australia, U.S. and Western Europe as they are mature, stable and supported by strong legal frameworks with good transparency. In entering these new markets, we will adopt a deliberate and incremental entry to scale by starting off a new project through JVs before moving on to bigger projects independently. This will help us to manage the risks of entering a new market.
In each of our market, we have a local team on the ground led by experienced key managers who have demonstrated strong operational and execution abilities. We have brought on Dr. Ying Rao as CEO of our Australia team, which is presently about 15-strong and based in Sydney. Likewise in the U.S., we have appointed Mr. Peter Lai as the President of our U.S. operations. Peter's team is expected to grow over the next year or so, as more projects come onstream in the U.S.