Ladies and gentlemen, welcome to Sa Sa's online investors presentation for the six months ended 30 September 2021. In the first half of the year, the group's turnover for continuing operations grew by 24% to HKD 1.6 billion. Thanks to improved sales and gross profit margin in the core markets of Hong Kong and Macau SAR, as well as the effective implementation of cost reduction plans. The loss narrowed to HKD 182 million- HKD 242 million in the same period last year. The improvement is even greater when government subsidies, rental concessions, and store impairments are excluded from both periods. In the Hong Kong SAR, the retail market was still dominated by local customers.
We have been working hard to stimulate local customer sales by strengthening our product portfolio and enhancing promotions, as well as capitalizing on the government's Consumption Voucher Scheme to boost sales to local customers. In the Macau SAR, where the border with Mainland China reopened in September last year, the group's sales to Mainland Chinese tourists increased in the first half and recovered to around 45% of the pre-pandemic level in the financial year ended 31st March 2019. However, more serious COVID-19 outbreaks were reported in the Macau SAR from the beginning of August to the end of September, leading to decreased sales in the second quarter compared to the first. We expect continued fluctuation in the group's sales in the Macau SAR as the pandemic waxes and wanes while sales continues to trend up.
In response to the plunge in the number of tourist arrivals in Hong Kong, the group has been adjusting its store strategies since September 2019 by closing down stores with high rental costs in the tourist areas, while at the same time opening new stores or relocating stores to prime locations when the rents were reasonable. The total number of our stores in the Hong Kong and Macau SARs has decreased from the peak of 118 in September 2019 to 91 in September this year. Moreover, we have also negotiated for substantial rental reductions upon lease renewal. As a result, the group's monthly rental expense has been cut by more than 40% over the past two years.
Despite a reduced number of stores, turnover at the group's operations in the Hong Kong and Macau SARs rose by 27% year-on-year in the first half. While gross profit margin increased by more than 9 percentage points, leading to a narrowed loss of the group's operations in the markets of Hong Kong and Macau in the first half. In the coming months, we hope that the pandemic will be brought further under control and that sales will continue to rebound. Meanwhile, we plan to close down more stores with high rents and those without contributions. This will increase our chance of reaching break-even on a monthly basis in the Hong Kong, Macau markets within this financial year, even if the Hong Kong SAR border with the Mainland has not yet reopened.
Our beauty consultants from closed stores have been deployed in neighboring stores, helping us to continue serving customers from our closed stores systematically and leading to same-store sales growth of 32%. Some local physical store customers switched over to online shopping and boosted our local online sales, which grew by more than 40% in the first half. The store closures, therefore, has not brought about any noticeable loss of sales for the group. Overall, our online business recorded a year-on-year increase of 65% in sales and turned profitable in the first half. The group continued to press ahead with integration of its online and offline operations to establish an O2O New Retail model.
In the Hong Kong and Macau SARs, we extended the click and collect service to more stores and offered e-coupons that can be used both online and offline to facilitate the interconversion of customers between the two, which would in turn enhance repurchase rate and customer loyalty. We also target to arrive at a leaner cost structure through this New Retail model and enhance Sa Sa's overall competitiveness and profitability in the long run. In the Mainland China market, consumption weakened in the second quarter while the pandemic affected more than half of the country's provinces. As a result, sales of the group's operations on the Mainland were not as good as they were in the first quarter, resulting in a single-digit decrease for same-store sales in the first half.
As we have strategically expanded our store network in southern and northern China as well as first-tier cities, the group's total sales in the first half rose by 13% compared to last year. As for Malaysia, it was seriously affected by the pandemic, and stores there were required to close temporarily for nearly three months on average. Turnover at the group's operations in the country plunged by more than 50% year-on-year, resulting in a loss. Looking ahead, we will continue to focus our efforts on the development of businesses with promising growth potentials, such as Mainland China market and online business. In the long run, we aim to keep raising the sales mix of our businesses outside of our traditional brick-and-mortar stores in Hong Kong, Macau SAR to over 50% of the group's turnover.
This will enable the group to achieve business diversification and sustainable development. Sa Sa's physical stores will enhance the function of providing customers with richer in-store experience of our products and services, thus attracting new customers, prolonging the customer stay at the stores, and increasing their frequency of visits. Meanwhile, our online platforms provide round-the-clock shopping experience for consumers who have developed online shopping habits. The group will further integrate its online and offline operations, so that online and physical stores complement each other to provide comprehensive, seamless customer experience. New Retail also has great potential in markets other than the Hong Kong and Macau SARs. Therefore, the group plans to expand its O2O services in Mainland China, where New Retail has developed faster than in Hong Kong.
Leveraging the cross-border e-commerce capability of WeChat Mini Program, our frontline beauty consultants in Mainland China could sell selected products from the Hong Kong and Macau markets, starting from mid-October in a pilot launch. This will make our product offerings in Mainland China more attractive and, at the same time, speed up the launch of new products in the Mainland, especially Sa Sa's private labels. This can also boost new customer acquisitions for us in Mainland China. Despite the weakened consumption sentiment in Mainland China in the short term, we are confident in the long-term development and prospect of the country. Mainland China remains the focus of Sa Sa business development. Sa Sa will slightly adjust the pace of retail network expansion on the Mainland in the near term.
We have revised down the target store number at the end of this financial year from 100 to about 80, and we will focus our resources on expanding the strategic regions and our core city clusters, especially in the Greater Bay Area. The world has been hit hard by the COVID-19 pandemic. The prolonged adoption of social distancing measures for nearly two years has accelerated the digitization of consumption. The group has demonstrated its ability to adapt amid such change, including actively developing its online business. Although the retail sector is still facing a lot of challenges, Sa Sa will adopt a pragmatic and flexible approach as it strives into the New Retail world, aiming at turning around the soonest and creating long-term value for stakeholders.
Now, I would like to pass the floor to Guy, who will explain Sa Sa's financial and operational performance for the first half of the year in detail. Thank you.
Good afternoon, ladies and gentlemen. Thank you for joining Sa Sa International Holdings Limited's interim results presentation for the six months ended 30 September 2021. Our agenda today covers our financial performance, a business review, and outlook and future plans. First of all, our financial performance. Group turnover increased by 24.2% to HKD 1.597 billion. Because our gross profit margin has increased by 4.1 percentage points, our gross profit dollar has increased by 40% to HKD 586.5 million. Our losses have narrowed by 25% to HKD 181.6 million.
If we exclude government subsidies and rental concessions from both periods, our losses have narrowed by 44.3%. Loss per share was HKD 0.059 as compared to HKD 0.078 last year. Our Hong Kong and Macau sales mix has clawed back a bit from 66.6% of group turnover last year to 68% this year, mainly due to border restrictions relaxation at Macau, which itself has seen some ups and downs as outbreaks occurred from time to time. The rise of online shopping is manifesting itself in our online sales mix, which has increased again this year to 19.2% of group turnover from 14.4% last year.
Mainland China sales mix has remained at a similar level to last year at about 8%, as outbreaks have hindered growth rate beyond group average of 24%. Malaysia has been hit hard, and its sales mix declined from nearly 10%- 3.8%. The sales mix outside of Hong Kong and Macau, as they are, physical stores now stand at over 30%, and we aim to take it over to over 50%. Our number of stores has increased marginally from 231- 233. Our store openings in the Mainland has exceeded store closures in Hong Kong and Malaysia. In Hong Kong, where rental costs are among the highest in the world, we have reduced our footprint in tourist areas to 38 stores and a total store closure of 15 in the last 12 months.
We'll continue to reduce high rental and low productivity stores while aiming to end up with cheaper but better located stores with enhanced functions, which we will discuss later. Both our short-term cost and long-term cost structure will improve, and so will our profitability and competitiveness in the long run. In the Mainland, where we are underrepresented, we have increased the number of stores by about 40%- 69 stores in the last 12 months. While we may adjust the pace of store expansion in response to short-term market weakness, our mid and long-term target to further increase market penetration very much stays on course. In Malaysia, we will consolidate our position until the pandemic is brought under control.
Total loss of the group amounted to HKD 181.6 million, meaning that there is a narrowing of losses amounting to HKD 60.4 million as compared to last year. If we exclude non-recurring items, such as the improvement would amount to HKD 152.3 million. Within this HKD 181.6 million is Hong Kong and Macau, which incurred a loss of HKD 122.8 million, nearly half the loss from last year. Online operations turned a small loss from last year to a small profit of HKD 1.2 million this year. Losses at Mainland China increased by HKD 36.7 million- HKD 41.5 million. Losses at Malaysia increased by HKD 16.6 million- HKD 18.5 million. I will provide explanations and details in later slides.
Our cash on hand stood at HKD 286.4 million as at 30th September 2021. A reduction of just over HKD 300 million from last year, which is close to the amount of loss we incurred in the last 12 months of about HKD 280 million. There's been no significant changes in CapEx, inventory level, and accounts payable. We move on to business review. The reduction in losses in the Hong Kong and Macau markets amounted to nearly HKD 200 million. Our increase in sales has given us HKD 73.6 million of gross profit contribution. Increase in gross profit margin has given us another HKD 94.9 million in contribution. While cost reduction efforts have netted us HKD 76.6 million.
In Hong Kong and Macau SARs, as the narrowing of losses in the last slide has suggested, there has been a broad recovery in key operating parameters. Sales and same-store sales increased by 28.8% and 32.4% respectively against last year, but still far below the year-ended March 2019. Despite running 15 fewer stores, sales to local customers in Hong Kong and Macau SAR stabilized, thanks to our efforts. e-coupons from Hong Kong SAR government further drove positive consumption momentum and boosted the growth of sales to locals in Q2. Sales trend is up in Macau SAR, but fluctuations occur with outbreaks. One occurred in Q2 and set back sales to locals against a high base driven up by Macau SAR coupons last year.
Also, in Macau SAR, recovery of sales to Mainland customers in terms of both volume and basket size turned sales of the combined markets positive, with double-digit growth in first half despite weakness at the end of Q2. The worst is probably over. The return to normal level depends on the pandemic and the status of the border with the Mainland. Gross profit margin has recovered for six consecutive quarters in Hong Kong and Macau, reaching 37.1% in Q2. Gross profit percentage recovery across all categories of products indicates that the stock clearance pressure has subsided. We aim to improve gross profit margin further with tweaking of the commission system, further improvements of inventory management, and stronger new product introductions. The last leg of our profitability drive is cost reduction and our continuous efforts to reduce cost is yielding results.
Rental costs, as an example, is shown here to have reduced by HKD 28 million. I will provide more details to show how much a more substantial reduction where distortions from rental concessions are taken off. Probably, according to this slide, it should be on this slide. Sorry. We closed 10 stores in Hong Kong SAR in the first half, mostly located in tourist areas. Customers are effectively retained by adjacent stores or online, helped by retention of beauty consultants. We expect to close five-eight more stores with high rental in second half. Fixed costs of frontline staffs have further been trimmed by another HKD 10.6 million on top of last year's already reduced cost base. New Retail model helps improve cost structure at physical stores.
This is the slide I was referring to just now, but let's go to the bottom table first. Which shows that the rental cost for the month of September 2021 is just over half of the same month in 2019 before concessions. For the reporting period, rental cost is reduced by HKD 77.2 million or 43.5% as a result of store closures and lowered rental cost upon lease renewal. The much-reduced rental concessions obtained this year against last year has narrowed the net benefits we get from our rental cost-cutting efforts to HKD 28 million. The Mainland China market is vast and provides for enormous growth opportunities for our online business. It has been our sole market in the past, while other markets have lagged behind for a long time. COVID-19 has woken up other markets and hastened their development.
For the first half, Mainland China market accounted for 69.1% of our online sales, while Hong Kong and other markets accounted for 19% and 11.9% respectively. The penetration of online sales continues to increase in Hong Kong and Macau despite a high base last year when we sold a lot of surgical masks online, increasing from 4.6% of Hong Kong and Macau turnover last year to 5.1% this year. In the Mainland, where online sales have in the past been a big part of our business, it has continued to grow from 54.4% of sales last year to 60.5% this year. As our online sales growth continues, our profitability continues to improve.
While the profit or loss involved during the year are not big, the significance of a profit turnaround is nonetheless worth noting. Recurring and non-recurring profits to the extent of HKD 700,000 and HKD 1.2 million are good improvements over last year losses of HKD 5.4 million and HKD 2.6 million, respectively. In Mainland China, sales increased by 12.7% in the first half, boosted by 14 new openings, including five shops in Northern China and six shops in Southern China. Other new stores are in first-tier cities, including Chengdu and Chongqing. In Q2, there were more widespread outbreaks as well as weaker consumer sentiment. As a result, while sales growth of 27.5% was achieved in Q1, this slowed down to 0.3% in Q2.
Same-store sales grew by 7.2% in Q1 and fell by 16.4% in Q2. In the Mainland market, losses increased to HKD 34.5 million due to the impact of widespread outbreaks, weaker consumer sentiment, and more than 40% increase in store number. New stores performed below expectations due to the above factors, and the same also resulted in reduced positive contribution from same stores. Recurring loss was HKD 34.2 million as compared to HKD 9.8 million last year. Malaysia experienced substantial disruptions from the pandemic. Under strict Movement Control Orders, our stores were idle for an average of 91 days in the first half. Aggressive cost reduction actions were taken to reduce shop and office costs by about 28% against an already reduced cost base last year.
We also reduced inventory further by 9.3%. A small subsidy of MYR 1.6 million was received from the government. We move on to outlook and future plans. Our long-term goal is to increase the sales mix outside of Hong Kong and Macau to over 50% of the group, with development focus on online business in Mainland China. We are confident in the Mainland China market in the long term despite current weaknesses in consumption. For us, online and offline markets in Mainland China are equally important as we work towards realizing the enormous growth potential of online while we strengthen the footprint of our physical stores. More synergies can be extracted between cross-border e-commerce and physical stores in Mainland China.
To realize the synergies between online and offline operations, we have defined the roles of physical stores as follows, stock pickup for click and collect services, continuous strengthening and adaptation of in-store experience of products and services to attract physical traffic, extend in-store staying time, as well as increasing the frequency of customer visits. The functions of our online operations is to attract new customers, provide seamless customer experience through online and offline integration, reduce group cost structure and lower overall break-even point for the group. In Hong Kong, Macau, we strive to achieve monthly breakeven before the border reopens. First of all, we will work on reduction of costs in physical stores by reducing store number and optimizing tourist-located stores in Hong Kong SAR, and to reduce costs further by centralizing workflow and automation. Secondly, O2O integration will enhance customer experience and improve their loyalty and repeat purchase rates.
We will cultivate KOLs to build our exclusive brands and integrate online, offline customers. Thirdly, we aim to gain local market share by enriching our product offerings in the areas of health and fitness, as well as beauty gadgets. We will strengthen and adapt in-store experience of products and services and seize business opportunities to open new stores in residential areas. In Macau SAR, we have been profitable since the third quarter of last year after border reopened in September. Performance is trending positively, but with fluctuations. Online is our strategic focus, with third-party platforms remaining key for developing new markets and acquiring new customers. We seek cooperation with existing and new platforms, be it e-commerce, social, or others. We are building video and live streaming resources to leverage on social platforms to penetrate young customer groups.
We also recognize the role of our own channels to establish and strengthen Sa Sa's online reputation and to compensate for changing strategies and positionings of third-party platforms. As discussed in the last slide, we will further drive auto integration and extend to deploying beauty consultants in the Mainland. Product registration regulations have limited our product offerings in physical stores in the Mainland. The cross-border function of WeChat enables our Mainland-based beauty consultants to offer selected popular products in Hong Kong and Macau SARs to Mainland customers. This also allows us to expedite the launch of house brand products in the Mainland. Our next step is to centralize customer relationship management system to further support these strategies. Mainland China is our major growth driver for the future. We are confident in the China market in the long term, despite current weaknesses in consumption.
Our short-term target store number has been adjusted to 80 to cater to current situation. Our longer-term development focus will continue to be in core cities, especially Greater Bay Area. Our product portfolio will be continuously enhanced, and overseas brands as well as trendy domestic brands will be introduced. In Malaysia, business is expected to improve under coexist with the virus policy. We will proceed to catch up with caution. We will optimize our store network and strive to reduce costs and losses. On the progressive side, we will introduce popular new products and offer attractive promotions to stimulate traffic and sales. We will continue to collaborate with online platforms to facilitate customers to shop without leaving home. This is a summary of our performance in the third quarter to date, up to the 14th of November. Let me elaborate a little.
For the third quarter to the 14th of November, combined Hong Kong and Macau SAR sales declined by 2.6% and grew by 0.5% on a same-store basis. If we look at Hong Kong SAR and Macau SAR individually, the Hong Kong market alone grew by 15.9%, with same-store sales growth of 23.4%. October growth was 12.1%, and this further picked up to 24.7% in November, with same-store sales growth reaching 35%. Macau was affected by the outbreak that started in August, but recovery was fast once the border reopened. While same-store and
While sales and same-store sales declined by 33.5% and 37.7% for Q3 to the 14th of November, if we look at monthly figures, the 48% sales decline in October narrowed rapidly to 1% decline in the first two weeks in November. Online sales growth was 20.4% for this period. This includes a growth of 48% in October and a growth of 4% in November to the 14th. This year's Double Eleven involved very aggressive price discounts by the brands, which we did not join. We are confident of catching up during Black Friday to boost our growth. Mainland China sales declined by 9.4%, and same-store sales declined by 24.5% amid very tight control against COVID-19 in Beijing and the North, where one of our key clusters is based.
Malaysia started to return to growth, with top line and same-store sales growth of 9.2% and 5.5% respectively. Thank you.