The group is here to talk about our financial year 2021 interim results. We will go through the corporate presentation, which is already uploaded onto our corporate website, followed by the Q&A session. Now, may I pass the time to Kathy for the presentation.
Okay. Thank you, Chloe. Good afternoon, ladies and gentlemen. Thank you for joining Luk Fook's FY 2021 interim results conference call. I would like to start with looking at our financial highlights, followed by financial review, and then our future plans and strategies. The details are recorded in the corporate presentation, which has been uploaded to our website. I would like to go through that with you on the phone now. Let's look at slide four about the first half FY 2021 financial highlights first. With the continuing impact of COVID-19 pandemic and high gold price, Luk Fook Group's revenue dropped by 47% to HKD 3.3 billion, while operating profit decreased by 41.4% to HKD 387 million. The group's profits attributable to equity holders decreased by 41.3% to HKD 291 million. The basic earnings per share also decreased by 41.2% to HKD 0.50.
With the strong net cash position, the group proposed an interim dividend of HKD 0.225 per share and a special dividend of HKD 0.275 per share, summing up to a total of HKD 0.50 . The dividend payout ratio is 100.8%, which is higher than our official dividend payout ratio or our official payout policy of 40%-45%. During the period under review, the group has net increased 60 stores worldwide, which were mainly Luk Fook licensed shops. As at end of September 2020, including the storefronts, the group has 2,180 shops worldwide together. Now let's look at slide six for our detailed financial performance. During the period under review, despite the drop in revenue, overall gross margin increased by 3.3 percentage points to 33.2% because of the substantial rise in gold price.
Gross profit therefore decreased by 41.2% only to HKD 1.1 billion, while the group's revenue dropped by 47%. On the other hand, total operating expenses decreased by 27%. Its ratio to revenue therefore increased by 6.5 percentage points to 23.7%. The negative impact of such ratio increase was offset by the increase in other income by HKD 89 million, a decrease in other losses by HKD 64 million, and there was no impairment losses on the CGU of HKD 56 million as in the same period last year. The HKD 89 million increase in other income was mainly because of the HKD 58 million salary subsidies from the Hong Kong government and the increase in VAT refunds plus other government subsidies of HKD 25 million together in mainland.
The HKD 64 million decrease in other losses was because of the reduction in exchange losses by HKD 39 million and decrease in gold hedging-related losses by HKD 36 million. The impact of which was partially offset by the HKD 20 million loss on financial guarantee in relation to banking facilities offered to an associate. Therefore, our operating margin maintained at a double-digit level and increased by 1.1 percentage points to 11.6%, while net margin increased by 0.9 percentage points to 8.8%. Now let's turn to slide seven. By enforcing our key targets in reducing inventory level, our inventory balance decreased by 8.1% since end of March 2020 to HKD 6.9 billion.
However, with the fastest drop in revenue, average inventory turnover days grew by 251 days to 622 days as compared to the same period last year. With the satisfactory drop in inventory level, the group's net cash increased to HKD 2 billion. Our ROE was 5.5%, which was 4.1 percentage points lower than the same period last year. The group's NAV per share at the end of September 2020 was HKD 18.11.
Now let's look at slide nine. During the period under review, the overall gross margin grew to a rather high level of 33.2% because of the rise in gold price. Meanwhile, the operating margin in the past two years remained at quite a stable low double-digit level, and the net margin maintained at a stable high single-digit level. Let's look at slide 10 now. As a result of substantial decline in number of visitors due to the continuing impact of pandemic, revenue from Hong Kong, Macau, and overseas markets decreased by 68.1% to HKD 1.2 billion, which accounted for 34.7% of the group's revenue as compared to the 57.6% in the same period last year. The segment loss was HKD 93 million. In the mainland market, the revenue declined by 18.3% to HKD 2.2 billion, accounting for 55.3% of the group's total.
The segment profit maintained flat at around HKD 508 million. During the period under review, the group's retail revenue substantially decreased by 61.5% to HKD 1.7 billion, with its mix to the group's revenue dropped to 51.7% from 71.2%. The segment loss was HKD 22 million. The group's wholesale business revenue fell by 12.2% over the corresponding period last year to HKD 1.2 billion, accounting for 36.1% of the group's total revenue. The segment profit decreased by 10.6% to HKD 147 million, accounting for 35.5% of the total. The segment profit margin was 12.2%. With the decreasing demand due to the strong gold price and the impact of poor macroeconomic conditions on consumer sentiment, sales amount of gold and platinum products substantially decreased by 52.5% to HKD 1.3 billion during the period under review, accounting for 43.6% of the overall sales amount, which was the group revenue minus licensing income.
Its gross margin rose by 7.1 percentage points to 28% because the average gold price rose by around 30% during the period under review. Gross profit of gold and platinum products, which is equivalent to consolidated gross profit of the group minus gross profit of licensing income, therefore declined by 36.3% to HKD 358 million, accounting for 44.3% of the overall gross profit against the 35.9% in the same period last year. On the other hand, by the way, we have renamed gem-set jewelry to fixed-price jewelry since the first quarter announcement in current financial year regarding our operating data. In order to distinct its difference against gold and platinum product category, which refers to gold and platinum products sold by weight based on international market price, that is at a non-fixed price. They are of two different gross margin categories.
Sales amount of fixed-price jewelry products also fell notably by 47.7% to HKD 1.7 billion, accounting for 56.4% of the overall sales amount. Its gross margin dropped by 4.5 percentage points to 27.2% because of substantial decrease in sales mix of its retail business, which was at relatively high gross margin and the discounting activities in Hong Kong and Macau markets for slow-moving stocks. Such drop in gross margin should be temporary and should go back to normal after the pandemic. Its gross profit as a result decreased by 55% to HKD 451 million, accounting for 55.7% of the overall gross profit. Now let's look at slide 12. As a result of the substantial decline in visit numbers, which is due to the continuing impact of pandemic, retail sentiment in Hong Kong and Macau markets has been weakening.
According to the government statistics on visitors arrivals, mainland visitors to Hong Kong from January to September 2020 fell by 92.7% year-on-year to 2.7 million, while that from Macau fell by 85.9% year-on-year to 3.02 million. During the period under review, retail revenues from Hong Kong, Macau, and overseas markets therefore decreased by 17.7% to HKD 1 billion, which accounted for 89.4% of its total. The segment loss was HKD 105 million. Due to the sale of excessive gold raw materials, Hong Kong's wholesale business revenue increased by 70% to HKD 98 million. However, because of the decrease of the gold hedging loss by HKD 17 million during the period under review, its wholesale business turned from a profit to loss, resulting to a segment loss of HKD 11 million. On the other hand, Hong Kong licensing income decreased by 25% to HKD 24 million.
The segment profit decreased by 23.8% to HKD 24 million. Retail revenue from the mainland market, including e-commerce revenue, declined by 26.9% to HKD 690 million, accounting for 31.6% of this total. The segment profit fell by 11.3% to HKD 83 million, accounting for 16.4% of this total. The segment profit margin was 12.1%. Revenue of the wholesale business in mainland markets declined by 15.8% to HKD 1.1 billion, which accounted for 59% of this total. Because of an unrealized gain of HKD 34 million on a fully secured gold loan to a licensee, the segment profit increased by 17.1% to HKD 159 million, accounting for 31.3% of the total.
The segment profit margin was 14.3%. As the increasing number of licenses shops in mainland offset the impact of other unfavorable factors, licensing income in the mainland market fell by 6.3% only to HKD 283 million, accounting for 17.5% of this total revenue. The segment profit fell by 5.3% to HKD 266 million, accounting for 52.3% of this total, and the segment profit margin was 69.4%. Now let's turn to slide 16 at our self-operated shops performance. Our overall SSSG was -64%, with Hong Kong and Macau market reporting -70% and mainland market reporting -30%. Due to the rise in gold price, gold and platinum sales recorded a decline in revenue and quantity, but an increase in ASP in all markets.
On the other hand, ASP of fixed-price jewelry products in mainland market increased mainly because of increase in sales mix of diamond products. In the Hong Kong and Macau market, ASP of fixed-price jewelry products decreased mainly because of increase in sales mix of lower value items. Slide 17 shows the same-store sales growth figures of self-operated licensed shops in different city tiers and regions in mainland.
Overall speaking, licensed shops performed better than our self-operated shops, as licensed shops normally are located at better locations with better fixed-price jewelry sales mix in mainland. Furthermore, 69 out of our 79 self-operated shops at the end of September 2020 were mostly centralized in northern and central parts of mainland, where the pandemic was the most serious during the period under review. Therefore, during the period under review, the same-store sales growth for licensed shops was -12%, while that for self-operated shops was -30%. Now let's look at slide 20. We have TOE, total operating expenses, of HKD 794 million, representing a decrease of 27%. With revenue declining faster, its ratio to revenue increased by 6.5 percentage points to 23.7%.
With the adoption of HKFRS 16, rental related expenses, including rental related depreciation of right of use assets, fixed and variable rental, and interest expenses amounted to a total of HKD 227 million, representing a 38.3% drop year-on-year. There were 17 shops in Hong Kong and Macau subject to rental renewal in FY 2021, accounting for around 30% of the total number of shops. The overall rental reduction was around 36%, but most of the renewals were short-term of one year. Therefore, we would have 50% of our shops subject to rental renewal next financial year, that's in FY 2022. Apart from the reduction on renewals, we have around HKD 50 million rent concession from landlords because of the pandemic during the period under review. Now let's go to the CapEx page on slide 22.
In first half FY 2021, the group incurred CapEx of HKD 177 million, which included the acquisition cost HKD 466 million of accommodation, our staff quarters in Macau, and HKD 99 million prepayment for acquisition of office and showroom in Shenzhen, and HKD 4 million prepayment of plant expansion project in Panyu. Let's look at slide 23 now. Contributed by the ongoing pandemic and the effect of HKD 20 million loss on the financial guarantee contract in respect of banking facilities, the loss in HKRH and subsidiaries widened. However, during the period under review, there was no impairment loss on amounts due from HKRH as in the same period last year. As a result, its total loss of investments and operating activities narrowed to HKD 51 million against the HKD 73 million loss in the same period last year.
Now let's look at the group's future plans and strategies. Prior to the period under review, the group has set up its new three-year, a ctually, in the last financial year, the group has set up its new three-year corporate strategy with supply chain management, mainland market expansion, and strategic growth as the three main focuses so as to foster its future business growth. In order to further enhance the group's competitive edge, the group will focus on strengthening supply chain management through various means. We will try our best endeavor to identify right products at right price and allocate right products to the market, allocate products to the market at the right time by implementing higher level of automation and big data management, i mproving factory productivity, shortening inventory turnover periods, establishing strategic partnership with suppliers, streamlining logistics and distribution, and intensifying support to licensees.
Carrying all this work helps to promote our business development and strengthen our operational efficiency and effectiveness. Let's look at slide 27 now. The group has already adopted multi-brand strategy and will strive to develop more new brands in the future. During the period under review, we have net added 20 gold bar shops. In slide 28, it shows our new brand, Joaillerie. This brand targets at the high-end jewelry sector and features exquisite design and craftsmanship, including our renowned jewelry master pieces. The first shop-in-shop was opened in Macau in July 2020, and one additional shop-in-shop was opened in mainland in September 2020. We target to open two more shops next year. Slide 29 shows our expansion plan in FY 2021. That's the current financial year.
As of 26 November 2020, including new brands, we have a total of 2,222 shops worldwide, while there were 2,180 shops by end of September 2020. As mainland remains the market with growth potential in the mid to long term, the group will continue to focus on business expansion in mainland. The target for net addition of Luk Fook shops in mainland for this financial year will be adjusted upward to around 250 shops, mainly focused on opening the licensed shops in fourth and fifth tier cities. While the target for net addition of new brand stores in mainland is 50 shops, which will also be mainly licensed shops. The group is also committed to further developing its e-commerce business and strengthening cooperation with various e-commerce platforms in mainland, aiming to sustain the growth in e-commerce revenue at a target of 15% growth in this financial year.
As it would take some time for the mainland tourists to come back to Hong Kong and for retail atmosphere to resume normal, the group will net reduce two shops in Hong Kong and seek opportunities to net add two shops in Macau in the current financial year. The CapEx budget for FY 2021 will be around HKD 250 million, which will be used for shop renovation, manager plans, office renovation, purchasing equipment, and purchase of property as well. Now let's go to slide 30 about the e-commerce business. In first half FY 2021, the e-commerce revenue increased by 23%, and the revenue accounted for 36.2% of the group's retail revenue in mainland, with a stable ASP of CNY 1,300. It accounted for 21% of the group's retail revenue as compared to the 6.6% same period last year. We currently have 15 platforms including Tmall.com, JD.com, and VIP.com.
In light of the enormous spending potential of young consumers on online sales platforms, we opened official e-shop on social media, including Douyin and Xiaohongshu. We have allocated more resources on short videos and the group enhanced live stream sales in order to expand its footprint in the young consumer market. Now let's look at slide 31. The group also continues to catch the rapid growth of online marketing by various marketing activities in new media platforms. We made use of trendy social media platforms, including Douyin, Xiaohongshu, and esports to increase our brand exposure and expand our footprint in the young consumer market. We expanded online sales by live streaming by staff and KOLs and enhanced CRM via instant messaging apps to reach and engage with customers. We are now on slide 32.
As the group anniversary was just a few days after 77 Festival, we invited our global brand ambassador, Mr. Li Yifeng, to show up at the live stream event, which recorded over 12 million views that effectively enhanced brand awareness and created a hot topic. Let's go to slide 33. To celebrate the brand anniversary, we collaborated with 100 KOLs on five major social media platforms to conduct an all-round product promotion. Three topics on anniversary promotions altogether gained a total of 700 million views and 1.2 million discussions. On slide 34, apart from the hashtag campaign on Bilibili and TikTok, which recorded tens of million views, close to 30 KOLs had a total exposure of 15 million views on Xiaohongshu. The topics attracted 10 million views and nearly 6,000 participants joined this contest, which once again raised Luk Fook's brand awareness among young consumers.
The same store sales of Hong Kong and Macau markets were around - 40% in October 2020, and - 30% in the first three weeks of November, which were further narrowed from the - 46% in September 2020. Besides, the overall same store sales of the mainland market, including both self-operated and licensed shops, recorded a low single-digit growth in October 2020 and a high single-digit growth in the first three weeks of November, a turnaround from negative to positive as compared to the - 5% in September 2020. Furthermore, the group will keep on freezing salaries and maintaining net full turnover measures for the upcoming year and will continue to negotiate with shop landlords to seek for rental concession so as to reduce costs.
To conclude, subject to the development of the pandemic, since the worst is over, we expect the same store sales in the mainland market to turn around to an increase in the quarter of October to December 2020, while the same store sales in Hong Kong and Macau markets may revert to a positive growth in the quarter of January to March 2021 in light of their low base. In view of the anticipated considerable growth of the middle-class population in mainland, the group remains optimistic about mid to long-term business prospects and will focus expansion in the mainland market. The group looks forward to regaining its business growth momentum in the near future. This is the end of my presentation, and thank you for listening.
Thank you, Kathy. Moderator, please open the floor for the question now.
Thank you. We will now begin our Q&A session. If you have a question for our speakers, please dial zero one on your telephone keypad to enter the queue. Once your name has been announced, you can ask your question. If you find your question is answered before it is your turn to speak, you can dial zero two to cancel your question. If you are using speaker equipment today, please free the handset before making a selection. One moment please for the first question. If you have a question for our speakers, please dial zero one on your telephone keypad to enter the queue. Our first question from Mavis Hui from DBS. Mavis, you may begin your question.
Yes. Hi. It's Mavis here. Thank you very much, Kathy, Nancy, for arranging the call tonight. I hope to get a little bit more information in terms of third quarter performance. You've just mentioned about expectations for same-store sales performance and perhaps into the second half, China to turn positive same-store growth in the current quarter, and then Hong Kong, Macau the fourth quarter, probably. What about the profitability trends in both markets into the second half of this financial year? Could you also give us some guidance in terms of your store mix in shopping mall and the street-level stores, given the situations especially in Hong Kong, Macau, that we're in Hong Kong particularly, that we've seen with social events and also COVID-19 impacts over the last 20 months. Which kind of store mix level do you think would be an optimal level? Thank you.
Actually, of course, for the second half of the year, we expect the profitability to be better than the first half. Basically, actually we have for the third quarter, in last financial year, it was not too bad altogether. But the fourth quarter was really, of course, it's really bad because the pandemic actually started from end of January. Basically, we should expect some growth in the second half against the second half of last financial year. When we talk about the Hong Kong, Macau market, actually, recently, we can see that the worst shops location would be like the tourist area, like Tsim Sha Tsui, Causeway Bay, Mong Kok. They've been hit the most.
That's why we need to reduce shops in those areas, while some of the residential areas are doing quite well, and some of the shops in the residential areas are actually profitable. Basically, you can see that we did not really plan to reduce too many shops in Hong Kong. Our targets has been reduced from the five-shop reduction to two-shop reduction only because of the big reduction in rental from the landlords in the past few months. Basically, we have some kind of allocation from the tourist area to the residential area. Basically, of course, with the improving same-store sales growth figures, we should expect better results going forward in our Hong Kong and Macau market.
Great. Thank you, Kathy.
Welcome.
Just to follow up about profitability. Is it possible to give us some guidance in terms of gross profit margins and perhaps some cost ratios that we are seeing like on page 20 of your slides for the second half of this financial year, so that we can have a clear picture? Thank you.
In fact, no matter how the gross margin fluctuates, you can see that we have maintained quite stable operating margin at low double digits and net margin at high single digits in the past few years. So basically, I guess maybe we should expect something like that.
Right. Thank you very much.
You're welcome.
Thank you. Next question, we have Amelia Li from Nomura. Amelia, you may begin your question. Thank you.
Hi, Kathy. Thanks for the presentation. Couple of questions from my side. First of all, can we comment, because I do understand we have restated our margins for gem-set fixed-price, but I'm just wondering if you can give us a sense of what's the gross margin for gem-set in first half of this fiscal year, j ust to get a sense of how it is trending for gem-set jewelry. Secondly, it has to do with the employment subsidy. Just wondering how much did we book for the first half, and what's the expectation of the subsidy to be booked in the second half as well? Lastly, just want to touch upon your multi-branded strategy because it seems as though that we have three brands right now, besides the Luk Fook brand.
I just want to know what sort of performance we are seeing, in particular for Goldstyle as well as Dear Q, because these two brands, I think they have had over a year of operations already. Thank you.
For the gross margin of gem-set, actually you can see it in the current period of time, it's been reduced by a few percentage points. That's mainly because of the reduction of retail sales mix, which was of a high-risk margin. Then there was some discounting activity going on for the slow-moving stocks in Hong Kong, Macau market. Basically, we normally should have something like more than 30% gross margin for gem-set jewelry. Basically, I think we should expect a better gross margin in the second half against the first half because of the gradual improvement in the retail performance. For the second question, I can't hear clearly, Nancy.
Employment subsidy.
For the amount we have received from Hong Kong government for the first half would be something like HKD 58 million. Actually, HKD 40 something million in August and HKD 40 something million in the second tranche. Part of that will fall into the period after September. For the multi-brand strategy, actually, when we talk about the, we've got Goldstyle as a new brand which expands faster than Dear Q. Dear Q is only a limited number of shops, so maybe we should, I don't think we should talk about the performance at the moment for Dear Q, but for Goldstyle, actually it's a kind of a smaller scale investment, and it's quite easy to make profits by the licensee. Basically, that's why it can be opened in such a quick manner, because the licensees, both of them are making profits.
Thank you. A perfect follow-up. I'm not sure if I missed it in your presentation. Can we talk about the franchisees' profitability in the first half of this fiscal year? You presented the margins and-
We don't know their profitability, actually. We only know their sales figure, their inventory balance, and their gross profit level. Basically, because of the rise in gold price, actually, they also benefit from that. You can see that the performance in mainland would be actually better than in Hong Kong, Macau market.
Got it. Very clear. Thank you so much, Kathy.
You're welcome.
Thank you. Next, we have Lina from HSBC. You may begin your question.
Hi, thank you. Hi, good evening, Kathy.
Hi.
I heard something like HKD 50 million rental concession in Hong Kong. I'm not sure if I heard it correctly. Do you expect any rental concession in second half, if HKD 50 million was the right number in first half? You also mentioned that on renewal, it is more short-term, like a one-year term. How do you expect the rental cost overall will be like for the full fiscal year and also into next year? Thank you.
In fact, the rental concession from landlords, we're talking about HKD 50 million in the first half. In the second half, we should expect that to be much lower because the situation would be better, especially like in Macau, we can see that the performance is getting better and better, and it may go back to normal sometimes later. Basically, like in the past few months, we may see kind of a wave of rental for some of the shops in the hotel areas or casino areas. But now, because of the cross-border activity restrictions will be less than before, basically, the performance in Macau market is actually improving in a quite good manner. That' s why we should not expect the rental concession to be that much in the second half.
For the rental renewal, the short-term one, because some of the landlords were willing to reduce the rental by maybe 50%, 60%, or 70%, but they were only willing to renew for one year, a short-term one. Basically for next year, we don't know exactly what it would look like, but all depends on the pandemic. Basically next year for the original three-year lease, we should see a reduction. But for the short-term lease, it's hard to tell. Maybe at a stable or kind of a flat sum or maybe some certain increase. It's hard to tell at the moment, really. For the full-year rental cost, because in the first half we have seen kind of 38% reduction already. Basically for the second half or for the full year, we should expect kind of double-digit drop for the total rental.
Okay, thank you. So double digits drop for full year FY 2021 is more like a 20% drop or high 20s? Or what is the-
I guess maybe minimum 20%.
Okay, got it. I also have a question regarding the profitability. Have you calculated, what is your breakeven sales level, like in Hong Kong and Macau?
In the past, we've done some calculation. It's something like maybe 50% drop, but that's talking about against something like maybe the year before last year's level.
Okay, so it's against FY 2019 level, right?
Yes.
Okay, got it. I have no further questions. Thank you.
Welcome.
Thank you. Next, we have Anne Ling from Jefferies. You may begin your question, please.
Hey. Hello, Kathy. It's Anne here. Sorry, I missed your third quarter to date same-store sales trend. Would you repeat? I only heard about that third quarter, you're expecting a positive growth for China and a positive growth for Hong Kong in 4Q. Is that correct?
Yes. That's correct.
Yeah. What about the current, as of quarter to date, could you share a little bit more of that matter, too?
In fact, in the announcement, it mentioned about that already. In October, Hong Kong and Macau markets, talking about - 40% same-store sales figure. In the first three weeks of November, it is - 30%. They show certain improvement against the - 46% in September 2020. For mainland market, the overall same-store sales figure, that is including both self-operated and licensed shops, because we ha ve only 79 self-operating shops, so it is not representative. All these together, we have some low single-digit growth in October 2020, and a high single-digit growth in the first three weeks of November. It is kind of a turnaround from the negative to positive as compared to the - 5% in September 2020. That is why we expect the third quarter, October to December 2020, mainland market to turn around to a growth again for its same-store sales.
For Hong Kong and Macau markets, we should expect that to turn back to a growth mode in the last quarter, that is January to March 2021, because of the low base.
Got it. If I take a look at the government's retail sales number for China, I think October, November is not out yet. It was up around 17%. Do you have a similar growth if you include the new store opening, or do you think that we lag behind the government's number? If that is the case, why is that? Do you think that local competitors are actually more aggressive than the Hong Kong jewelry company? Thank you.
We don't really know the content of that statistic. We have compared the retail amount, altogether for all the shops, both the self-operated and their licensed shops all together in the July to September quarter. We compare that to the local brands, some of the local brands. Most of the brands that we are talking about a decline mode. For the top two local brands, they talked about a low single-digit growth. For us, we are also at a low single-digit growth. So quite similar actually, when compared to the large one or the good performing one.
Okay, got it. For your same-store sales growth announcement, that is only including your own retail store. Is that correct?
Yes. For same-store sales growth figure, it is including only the self-operate shops. We have announced such figures, same-store sales figure for the licensed shop as well, but it will be stated clearly in the announcement.
Yeah. So for the first half, do you have any information about your franchisees, or your licensed stores same-store sales? Are they better than the self-branded brands, or are they a little bit worse?
Yeah. Actually, we've got a slide showing the stats. Let me see. That's on slide 17.
Okay. I'm on that.
For licensed shops in the first half, their overall same-store sales was - 12%, while our self-operating shops in mainland was - 30%. We've explained the reason why we performed worse than the licensed shops, mainly because they are mostly located at better locations and have a higher sales mix normally, a fixed-price-
Okay.
Mix. For our self-operate shops, actually by end of September, 69 of that, out of the 79 self-operate shops we have, were located in northern and central parts of China, where the pandemic was the most serious during the period under review. That's why we performed that worse in the first half for our self-operated shops in mainland.
Okay, got it. Thank you.
You're welcome.
Thank you. Next, we have Chris Leung from Franklin Templeton. You may begin your question.
Hey, Kathy and Nancy.
Hi.
I just want to ask about the strategy on the e-commerce business. It's still a 20%+ growth business. But in the past years, talking about more than that. What are we planning in terms of the e-commerce side? Do you have any update would be good? Any color on the e-commerce beyond this discussion?
Well, our target was set to be 15%, but we actually stretched a bit internally so that I actually asked them to grow more than 15% as a more conservative strategy. In the past years, we actually added a lot of platforms as well. We have to update the platform presentation. I just found a bit on it. We have more than 30 platforms now. The major contributors are actually still the Tmall and JD Shop and also JD.com. But we also added the Xiaohongshu and Douyin platforms in the past several months. This is going to help us to build a brand as well, because there's a lot of videos and also share and so on online. Just like what Kathy just shared in the presentation earlier, we also have advertising campaign.
We run a lot of posts and also videos on these social media channels. This actually helps the e-commerce business as well.
Okay. How big is your teams operating the e-commerce platform business?
Well, our team is in Panyu, so we actually have more than 100 people for the operations. Also, they are supporting that for photo shooting and also the marketing team is also helping them as well. Because a lot of the times when you have marketing campaign for the offline market, we actually try to link it up with the e-commerce sellers as well, so that there is a synergy between the two teams. That is why we have been doing quite well in the past years. We hopefully are going to have more growth coming up in the future.
Okay. Just a question on the Goldstyle. In terms of the store product, like sales per stores or any indicator, because that has been rolled out for a year, so just want to see. Expansion is actually very fast. In terms of the economics-wise, if any color, I don't know if the same-store growth is actually including these Goldstyle numbers or not, but I guess not. Any color on the Goldstyle performance would be appreciated.
Well, we have the Goldstyle collection in Luk Fook shop as well, and then we have some standalone shops under the brand name Goldstyle in some of the shopping malls in China. This collection was actually launched a few years back then, and it was a new product at that time because there was a lot of traditional gold products in the market. When we launched Goldstyle collection, it was actually very fresh to the market. But nowadays, there are a lot of other types of similar gold products in the market. So we have to introduce more styles and nicer designs to attract consumers. Also, some of the times we may review the pricing strategies as well, so that we are still optimistic about the development of Goldstyle collection.
If you have time to visit one of the stores in China, you can actually see that the Goldstyle brand is very outstanding, very fashionable. So there are a lot of customers in China, even the youngsters, they are still wearing gold products. This Goldstyle product is more fashionable, not like those traditional wedding gold products that some of the people might find it more old-fashioned. So that the Goldstyle product is one of the things that the youngsters may like.
Got it. Okay, that's good. Thank you.
Thank you.
Thank you. There are currently no questions in the queue, so if you have questions for our speakers, please dial zero one on your telephone keypad now to enter the queue. I think All right. We have one more question from Mavis from DBS. You may begin your question.
Hi, Kathy and Nancy. Talking about Goldstyle, actually, could you give us a breakdown in terms of your fixed-price gold products versus total sales of your overall gold and platinum products? Or should I say the overall sales of your group in China and also in Hong Kong, Macau, respectively. Just now, I think Kathy also mentioned about in Macau, actually, we've been seeing recovery in a good manner. So, is it able to give us a little bit more color in terms of your contribution of sales from Macau so far in the past three months versus perhaps the first quarter of this financial year? What about the tourist sales proportion, do you disclose that for Macau as well? Thank you.
We want to talk about it. Talking about quarter. Let me see. In fact, talking about the July to September quarter, actually, it's around maybe something like 12% of the group total for the retail revenue. But normally, it should be something like maybe 20% something , actually, in the past.
Right. So this is the fixed-price gold product sales, right?
No. It's the overall. You talk about the fixed-price gold product. Well, let me see. Well, we just talked about the fixed-price gold product in Macau from July to September, it's only maybe around, i t's really a very small portion, maybe around just 4% of the group's retail revenue. It's a very minor one.
Oh, I see what you mean. I'm happy you were saying that 12% was for the total for the group, for fixed gold price sales.
Okay.
That's for July to September, right?
Yeah.
If it's just for Macau-
Is that what you said?
Yes, yes.
Yeah. Maybe we can talk individually, and let me understand your question in a more detailed manner because I'm not too sure what you are asking.
Okay, never mind. Can you also comment a little bit in terms of your Macau recovery, please?
Because for the Macau market, actually, we can see that it improved already in the first month, several months before September, we are talking about 90% something drop in the same-store sales. Then in September, just by end of September, the border restrictions were relaxed. So basically, we've seen something like 50% drop only. Then in October, it is something like 40% drop. Then in the first week of November, it is something around 20% something drop. So basically, it is improving in a good manner.
Yes. Thank you very much, Kathy. This is very helpful.
Thank you. The next question is from Tony Li from Haitong International. You may begin your question.
Hi, Kathy and Nancy. Thanks for taking my questions. My question will be on the store expansions. Would you comment on the store expansion number for the next two or three fiscal years? This year is around 250. What about next fiscal year? Thanks.
In fact, we have set a three-year plan. In the last financial year, talking about per annum addition of 200 shops, including 150 for Luk Fook brand and 50 for new brands. Basically, that should be our normal target. But in this financial year, because we can see that the licensee are willing to have a fast expansion so that we have upgrade our targets to 250 Luk Fook shops and 50 new brands. Basically, maybe we can expect kind of similar growth or momentum in the coming one or two years. Hello?
Got it. Thanks.
All right. Thank you. As there are no further questions right now, I will hand the session over to you, Chloe, for closing statement. Please go ahead.
Thank you, Kathy and Nancy, and thank you very much for joining the call, everyone. Have a nice evening. Bye.