Dear investors and friends of the media, good afternoon. Welcome to the 2020 interim results presentation by Xtep International Holdings Limited. I am Director of Investor Relations and Sustainability, Sophia Wong. We also have with us our Chairman and CEO, Mr. Ding Shuibo, our CFO, Mr. Ricky Yeung, and Mr. Chen Zhong. Our presentation will be conducted in Mandarin today with English SI. Our management will first take us through the interim results highlights to be followed by Q&A session. In a moment, I will inform you of the procedures for Q&A. I will now hand over the time to Mr. Ding, our Chairman and CEO. Dear investors and friends of the media, thank you very much for participating in our interim results presentation. I am Shuibo Ding. Today, I will talk about interim results highlights, and then I will hand the time over to our CFO, Mr.
Yeung, to take you through some more detailed explanation. We have faced rebounds of the pandemic, but we have reached historical high of our revenue at CNY 5.68 million, up 37.5%. Core Xtep brand revenue increased by 36.2% to CNY 4.898 million. Operating profit increased by 34.8%, reaching CNY 922 million. Interim dividend per share HKD 0.13, up 13%. We are focusing on three major segments, including the mass market. We have a number of strategies. We will continue to make investments to solidify our brand as the first choice in China, and we'll also enhance the product profile and enhance the level of collaboration with our partners. We will also step up the work surrounding Running Club so that we can continue to outperform our competitors.
We will continue to collaborate with all the distributors in our network. We will continue to expand our footprint and open new image stores so that we can provide better experience to our consumers. Thirdly, alongside national strategies, we will focus on sports involving children in schools and also adolescents. We'll involve students at different levels to hold on to this great development opportunity. We also have very good performance for all our different brands. In terms of our channels, we continue to expand them, and we focus on R&D as well, so that we can leverage on synergy and continuously make necessary adjustments to our portfolio. We will also strengthen and speed up the opening of new points of sale and expand our work on e-commerce. Let's move on to athleisure segment. For K-Swiss, our positioning is high-end athleisure brand.
We have already started the setting up of thematic stores in mainland China. I believe it will enjoy very good development. Palladium, it is a very well-positioned brand, which is very chic and trendy. Despite the pandemic, towards the H2 of this year, our medium to long-term outlook is still very optimistic in the future. In our operations, we will adhere to the highest level of standards and repay our community. In 2021, we have formulated our long-term development plan and all related strategies and targets, setting a very good foundation for sustainable development of the group. As for the detailed financial information, I will pass the mic to Ricky. Thank you, Mr. Ding. Good afternoon. Welcome to our interim results presentation. Looking back at the H1, the global economic situation continues to be affected by the pandemic.
Towards the end of March, there was this new round of outbreak in mainland China, causing a lot of challenges to our work. For our core brands, we recorded single-digit drop, but afterwards things stabilized and our current account stabilized as well. Our retail revenue increased by 30-odd%. For Q2, the growth was medium to high level. For the whole half year, it was between 20% and 25%. In July and August in mainland China, we still have some isolated outbreaks, but they are of smaller scale, and they do not fall into our targeted sales areas. The impact is about 20%-30% in August. We have a growth of retail by about 30%. Because of the pandemic, our inventory level compared to last year, it increased by about two weeks.
Q1, Q2, compared to last year, we have an increase about 5 percentage points. Next, let's look at the H1 performance. Please turn to page two, performance highlights. Revenue CNY 5.684 million, up by 37%. Core business increased substantially. Our core brand increased by 36.2%, reaching CNY 4.898 million. For the children's segment, it also performed very well, taking about 50% of the total performance revenue of the brand. K-Swiss and Palladium sales increased by 36.3%, reaching CNY 630 million. Saucony and Merrell increased by 106%, reaching CNY 157 million. Our revenue increased by 34%. You can see an increase of 38% concerning profit attributable to our equity holders.
HKD 0.13 dividend payout for the interim has been supported by the board. Payout ratio 50%, which is below last year's level because we have identified a lot of development opportunities, for example, our children's brand. We have decided to adjust downward the payout ratio, but it's still higher than our peers. In the past, we have always stressed that we will not fall below 50%. Since IPO, we have adhered to our commitment, and we will continue to discharge our duty. Mr. Ding will continue to follow up on the dividend payout matter, which is an area of concern of our investors. We have a total of 6,251 branded stores, an increase of 100 in the past year. Our inventory, 4.5 months. Page four, consolidated income statement.
Revenue increased by 37.5%, as stated earlier. Gross profit ratio increased by 2 percentage points, reaching 42%. SG&A to revenue ratio, 30%. Operating profit, 16.2%, a drop of 0.3% because of higher logistical cost overseas. We can see that the logistical cost has shown some falling trend towards the H2, so we believe it has already bottomed out. For the professional sports sector, we've seen a drop because associated entities, they have increased the prices. The actual gross margin is actually an increase of 0.7%, reaching 57.2%. I will tell you about the details on Page 19 later. Our gross profit increased by 38%, reaching CNY 37.3 billion. SG&A has also shown positive growth. Operating profit margin, nine hun...
Operating profit, CNY 922 million. Profit attributable to ordinary equity holders increased by 38% to CNY 590 million. Net profit margin, 10.4%. Page five. Our working capital turnover days compared to last year, there's a drop of 7 days at 70 days. Compared to end of previous year, an increase of 6 days because of inventory turnover cycle has been lengthened. Other than comparing to end of 2021, we also see that there are some factors leading to higher level of inventory. Between March and May in Jilin, Henan, and other northeastern regions, we have long-term lockdowns, so we actively canceled some orders. The produced products, some of them have been sold in mid-June. We still have about CNY 200 million worth of inventory at hand. Through e-commerce during November 11 festival, we'll clear all the inventory.
Overseas supply chain and logistical systems in May and June, they resumed normality and we received products. Gradually, some have been sent to our customers. That explains 36% growth in terms of sales for athleisure brands. Some inventory are still waiting to be delivered. That is why inventory level is higher than the previous period. It ensures in the H2 we'll have sufficient supply to our overseas customers. In June, plenty of products became our inventory, expanding our cycle to 136 days. Suppliers normally give us the cycle of 120 days, but this is short-lived. Page seven, if you look at some of the revenue and gross profit performance. We are looking at a revenue at CNY 4.8 billion. For children's brands, very good improvement. Our other products are also performing very well.
Functional items for running especially, there is a growth of 40%. Overall gross profit margin also increased by 0.7% to 42.2%. Children's proportion is going up, dragging down the growth of gross profit margin because it is normally lower compared to adult products by 7%-8%. In the H2, gross profit margin will continue to be improved. For the whole year, we expect it will be around 42%-42.5%. Page eight, SG&A analysis increased by 38.3% to CNY 1.306 billion. An increase of 0.5%. The biggest chunk is in advertising promotions, up by 37.3%, reaching CNY 495 million.
During the pandemic, we could not organize many marathons and related activities, but we have invested more heavily into our Running Club. We have added about 24 Running Clubs, and we are also advertising more in terms of our children consumers. In the H2, we will continue on with such investment so as to support children's segment and overall growth. R&D cost. Year-on-year increase of 11.7%. Takes about 2.2% of total sales. Normally, we will keep it at 2%-3%. In the H2, R&D expenses will continue to grow. Staff cost increase of 39.7%, mainly driven by 75 million stock options offered to our staff.
The cost is about CNY 300 million to be amortized over nine months, and they will be able to obtain such options by the end of March 2023. The amortization does not have any impact on our cash flow. We're talking about amortization of CNY 50 million for 2021. 2022 whole year, it is about CNY 62 million. Compared to the previous year, there's only an amount representing three months, so it is reflected like we have higher level this year. We have e-commerce operating, logistics expenses. In Anhui, we have this whole line of production, and gradually it is commissioned, so depreciation cost is going up as well. Core business performance. First of all, page 9. In terms of the running ecosystem, we have many offerings.
We have our products, we have Running Club and running ecosystem participants representing biggest groups of runners. Towards the end of June, we have 1.5 million club members, an increase of 0.5 million. We also own the greatest number of runners clubs, 42 in total, an increase of 28. Before the pandemic, we also dominate the marathon product segment. We have sponsored 25 fastest runners. Some of them, such as Dong Guojian, Peng Jianhua, they all wear 160X Series products when they achieve new records. This is expanding and growing most rapidly. We are maintaining our market lead. We also have stronger brand recognition, driving sales of other products. Page 10. 160X Series have been worn by many runners in major competitions, including Asian Games trial. The top six players or participants were wearing 160X Series.
It shows that 160 Series is very successful, and it is very much recognized by professional athletes. Page 11. We continue to provide good functions in our products, but we also want to be more compatible with people's lifestyle, and we want to be more sustainable. In May 2021, we have launched Xtep DNA, keeping our original elements but blending different Chinese DNA to showcase our Chinese trend. It is high-end in nature. Compared to leisure products, they will be more expensive by 30%-50%. We also have a number of celebrities who are our spokespersons, and they promote a positive image of our products and enhance brand recognition. It is very important, so we'll continue to collaborate with sports stars and entertainment stars. It is a bit unclear. Let's ask the technical staff to fix the problem.
For the first time, we got MSCI BB rating. We will continue to work very hard. In terms of ESG, we will continue to invest. We have used this biodegradable material to produce our windbreaker. Page twelve. We'll continue to upgrade our channel. We will open big stores and close the smaller stores. In the past, we focused on third to fifth-tier cities. Now we are moving towards second to third-tier cities. Also in Shenzhen, we have more than 50 shops already. We also have one flagship store. On top of that, for first and second-tier cities, the proportion is about 20%-30%. Third to fourth-tier cities enjoyed the fastest growth in recent years. We'll continue to move into these places and continue to enhance brand recognition in first and second-tier cities. We have 6,251 branded stores.
Compared to last year, there's a net increase of 236, and 100 more compared to the end of 2021. In the H2 of this year, we'll continue to open 100 new stores. Perhaps you have heard about our collaboration with YY. On the ninth of July, YY opened the first thematic store on our behalf. We'll also consider collaborating with international brands and operators. YY and other operators will help consumers to go to shopping malls in higher-tier cities more quickly, and there is no conflict with existing operators. Page 13. Xtep Kids, this is the second year of fast growth. Last year, more than 50%, and H1, we saw a growth of 84% to CNY 721 million, accounting for 15% of core brands revenue. We dedicate our efforts to R&D.
We draw more students to be covered by our brands. Last year, we sponsored many secondary school and university competitions. We also provide our products as sponsored products to help competitors achieve better performance. H1 this year, we achieved great growth of 83%. We believe that the whole year growth will not be below 50%. Identifying the correct market opportunities, we will continue to dedicate our efforts to R&D and A&P. Page 14, outlook and strategies. The pandemic is still affecting us, but we're very confident about the H2. We'll continue to solidify our running ecosystem and also accelerate kids business. We will also strengthen our products, strengthen brand recognition. Because the macroeconomic situation is affecting our overall performance, consumers are more inclined to purchase more cost-effective products.
When we position ourselves, in terms of the mass market, we will continue to do well our positioning. We will scale up Xtep Kids business and functional products. We believe there will be a 25% growth in the H2, and whole year sales growth will be between 25%-30%. I believe it will close, it will be closer to 30%. Let's look at K-Swiss and Palladium. Page 16. Revenue increased by 36.3%, reaching CNY 629 million, which is 11.1% of group revenue. They focus on Taiwan, Hong Kong, and European markets. In the past two years, because of disruption to the supply chain around the world, and also the pandemic, we were greatly affected. Things are beginning to become more normalized towards the middle of the year.
In the H1, sales greatly improved. Our product supply was greatly protected, and we are able to achieve this CNY 629 million revenue. For whole year, we believe the growth will be 30%. Gross profit margin dropped by 3.7 percentage points because of overseas logistical costs has gone up. Logistics is becoming more smooth, so the cost will come down. GP margin has bottomed out. Operating loss, CNY 54 million, an increase of CNY 13 million. As we have said in recent years, K-Swiss and Palladium are still in investment stage, so we will continue to control the annual losses to about CNY 100 million. Page 17. We have 15 K-Swiss self-operated stores and 71 Palladium stores in Asia Pacific by the end of June.
K-Swiss stores are mainly in mainland China and Palladium mainly in Hong Kong, and also some in mainland China. We are cautious about business outlook due to the pandemic. In the H2, we will continue to focus on branding and adjustments. Whole year sales hope to achieve 30% growth. Page 19. Professional sports, Saucony and Merrell. We have two JVs. One is a branding company, the other one is an operational company. We are assuming two JVs have ownership of 100% to understand the actual operations of the two brands. It is going to be different from our consolidated books. You can refer to Page 31 if you want to look at the details. Revenue increased by 106% to CNY 257 million.
Gross profit margin increased by 0.7 percentage points to 57.2%. Operating loss, CNY 12 million, part borne by our clients. E-commerce sales increased by 4 percentage points, taking up about 58%. Direct operation, 33%. A small part is done through wholesale, mainly to Hong Kong. A quarter of our shops in Shanghai, so the sales situation in the H1 was greatly affected by the pandemic in Shanghai. With strong e-commerce performance, we have seen very good performance for our Running Club. That is why we're able to sustain very strong growth. 87% goes to footwear. We believe it will continue to grow. Page 20. By the end of June, we have 46 Saucony shops and 7 Merrell shops. Because of serious pandemic situation in mainland China, we will be conservative in opening new shops.
In the H2, we will continue to strengthen e-commerce sales. 50% growth for our JVs. We are readjusting our target to no less than 60%. It should be between 60% and 70%. Our losses will be contained within CNY 50 million. Saucony is developing better than expected. Towards next year, when Saucony business model continues to mature, we will start considering franchise arrangements. 2025 revenue target is CNY 1.1 billion. Page 22, prospects. We remain optimistic about long-term prospects of sportswear industry in Mainland China. Although there is still impact from the uncertainty of the macro economy and also the pandemic. We'll be very cautious. For our various brands and the development in the H2, we're very optimistic.
For our core brands, we will continue to focus on Xtep, and we believe whole year growth will be about 30%. K-Swiss and Palladium, the overseas supply chain and logistics is improving, so we will be cautiously optimistic. Whole year target, close to 30% sales growth. For our JVs, with the sharing of resources in terms of running, in particular, our JVs will have good growth in the H2. We have readjusted our annual target from 50% to 60%-70% growth. Despite the high base figures towards the end of last year, all brands have been growing very quickly. Whole year sales growth will be more than 30%. Our investors used to be quite concerned about room for growth for our gross margin. Well, actually, if you look at our brand positioning, our products, they are all maturing.
Every year we sustain very good growth in terms of profitability, but we need to continue to invest so that we can get closer and catch up with the market leaders. We see good development opportunities, and we will invest more strongly in R&D and advertisement and promotional activities so as to drive up our GP margin. We also have a number of new brands, and we'll control the losses at a level below CNY 150 million. GP margin will be between 0.3%-0.5%. We are confident in the next 1-2 years, with our core kids brands continue to grow, they will make better contribution to the entire company. Thank you very much.