The sales target for FY23 was achieved. Yuexiu Group released operating data for November 2023, achieving contract sales of RMB 11.875 billion and contract construction area of 332,300 square meters, with a year-on-year increase of 0.4% and a decrease of 0.7%, respectively. As of the first 11 months of '23, the company achieved cumulative contract sales of RMB 132.91 billion, an increase of 29.1% over the previous year, and achieved 100.7% of the annual sales target of RMB 132 billion.
A second project was added in Shanghai in '23. Yuexiu also announced that it won the bid of 4,785 billion yuan for the Xinjing Industrial Park plot in Putuo, Shanghai, for the second project added by Yuexiu in Shanghai this year. The project has a land area of 40,150 square meters, a floor area ratio of 72,270 square meters, and an average floor price of 66,210 yuan/square meter. At the same time, the average selling price limit of the project is RMB 102,000 per square meter, which is basically the same as other projects in Changning and Putuo. Including all other costs, we estimate that the total cost of the project is about RMB 84,000/square meter, and the gross margin is about 17%, which is in line with the average gross margin of 17-18% of the company's development projects.
Total land purchases from year to date are RMB 47.4 billion. Including new projects in Shanghai, Yuexiu has purchased 19 new projects by 2023, with a total planned construction area of about 3.6 million square meters and a total cost of RMB 47.4 billion, accounting for about 36% of the total contract sales achieved in the first 11 months of 2023. We believe that Yuexiu Group is replenishing land reserves according to the plan to maintain the growth of land reserves, while maintaining a stable net debt ratio of about 60%.
Maintain the buy rating. In view of the low expected profit margin of the new project due to uncertainty in the market environment, we have lowered Yuexiu's long-term profit margin expectations and profit forecasts accordingly. However, we believe that Yuexiu's sales performance is still ahead of most of its peers, and is the first developer to achieve annual sales targets under adverse market conditions. We maintain our buying rating for Yuexiu. The target price was adjusted to HK$10.7, a 50% discount from net asset value (previously 45%), maintaining Yuexiu as our first choice in the industry in 2024.