Good evening, ladies and gentlemen. Welcome to the live audio webcast of analyst and investor session on Chow Tai Fook Jewellery Group's interim results for the financial year 2022. Let me introduce the management today. They are Mr. Kent Wong, the Managing Director, Mr. Chan Sai-Cheong, the Managing Director, Mr. Hamilton Cheng, the Executive Director. Hamilton is responsible for the finance and information functions of the group. Mr. Peter Suen, the Executive Director. Peter is responsible for the Hong Kong and Macau of China and other markets. Mr. Bobby Liu, the Executive Director. Bobby is responsible for the retail technology applications and production management. Ms. Danita On, the Director of Investor Relations and Corporate Communications. Firstly, Mr. Hamilton Cheng will present the interim results, operational highlights, and financial review. Mr. Chan Sai-Cheong and Mr.
Kent Wong will talk about business update in mainland China and Hong Kong, Macau of China and other markets respectively. Finally, Mr. Bobby Liu will give updates on the group's smart retail strategy and conclude the presentation with the group's business outlook and strategies. After that, we will have a QA session. This session will be conducted in English in general, but Mr. Chan Sai-Cheong shall speak in Mandarin with English interpretation. Now, may I invite Hamilton Cheng to present. Hamilton Cheng, please.
Okay, thank you. Good evening, ladies and gentlemen. I'm pleased to announce our first half fiscal year 2022 interim results. The group's revenue jumped 79% to around HKD 44 billion in the period, driven by a strong demand for gold products and our wholesale business growth in the mainland. Same-store sales in mainland was up by 32%, while that of Hong Kong and Macau leaped by 80%. Core operating profit, excluding the impact of unrealized gain or loss on gold loans and foreign exchange, which better reflects the underlying operational performance of our business, increased by 9.6% year-on-year to around HKD 4.5 billion, thanks to our well-contained SG&A. Profit attributable to shareholders rose by 60% to HKD 3.6 billion, benefiting from an unrealized gain on gold loans recorded versus a loss in same period last year.
Impact of asset impairment made last year and a lower effective tax rate this period. Basic earnings per share amounted to HKD 0.36. The board has declared an interim dividend of HKD 0.22 per share, and payout ratio is around 61% in this period. During the period, we further implemented our Dual-Force Strategy. For retail expansion, we continued to upscale our business in the mainland and developed new product offerings. We opened a net of 624 Chow Tai Fook stores in the mainland during the first half, bringing the total number to 4,722 at the end of September. Demand for CTF • HUÁ collection remained strong. Its contribution to gold products RSV in the mainland reached 43% during the period versus 36% same period last year.
Meanwhile, we increased our efforts to promote natural diamonds during the period. T MARK contribution to our diamond products RSV increased to 23% in the mainland, while that of Hong Kong and Macau was lifted to 29%. Pushing forward our smart retail strategy, RSV of our smart retail business in the mainland surged 160% in the first half, contributing to around 9% by value and 16.4% by volume to our mainland operations. Adjusted gross profit increased by 20% in the period as supported by robust revenue growth. However, our adjusted GP margin decreased to 23.5% in this period. Based on our gold hedging policy, approximately 45%-50% of the gold sold in the same period last year was not covered by gold loans.
Therefore, the surge in international gold price in the same period last year has led to a tough base, which raised the adjusted GP margin by around 5% over the normal level in last year. While in this year, around 3 percentage point impact was due to a higher wholesale revenue mix, an increased gold sales mix also caused another 2 percentage point decline to the adjusted GP margin. As the increase in our wholesale business was a major growth driver in this period, which would not incur much operating expenses. Our SG&A expenses were well-contained, and the ratio contracted by 600 basis points to 14% due to favorable operating leverage.
As a result, our core operating profit increased by 9.6% and COP margin stayed at 10.1%. Revenue by reportable segment. Revenue from Mainland increased sharply by 82% during the period, thanks to a steady consumer sentiment and new openings supported by franchisees. Retail revenue increased by around 46%, while wholesale revenue increased more than 140%. As a result, our share of the wholesale revenue in Mainland climbed from 36% in the first half last year to 49% in the period. Overall, revenue contribution of the Mainland to the group reached 87%. In Hong Kong and Macau and other markets, revenue was up by 63% year-on-year, mainly attributable to an improving local consumer spending. Revenue by product.
In the first half, revenue of gold products was more than doubled of that same period last year, benefiting from the robust customer demand and a relatively soft international gold price. Its contribution to the group's revenue expanded to around 71%. Gem set and watches in the period was also performing promisingly and registered an over 30% revenue growth. If the contribution of our gold products normalize to our fiscal year 2020 or 2019 level, which was around 65%, we believe that the GP margin or OP margin should have improved by 150-200 bps. Based on our normalized product mix, our medium-term COP margin target would be around 12%. Here is our same-store sales growth trend.
During the period, same-store sales growth sustained a stable trend in both markets. Same-store sales growth moderated in Q2 versus the Q1 in both markets, was mainly because of the base of comparison. When we look at these figures on a two-year or three-year CAGR basis, performance of these quarters were actually pretty consistent. Overall, in Mainland China, same-store sales in the first half was up by 32%. While in Hong Kong and Macau, business was supported by an improving local consumption in Hong Kong and the recovering tourist spending in Macau, same-store sales leaped by around 80% in the period. Latest update for this quarter from October 1 to 18 this month, same-store sales growth in Mainland sustained a positive trend at around 12%.
While in Hong Kong and Macau, same-store sales dropped around 3% as business in Hong Kong was impacted by the adverse weather in October, while that of Macau was negatively affected by the travel restrictions. Yet Hong Kong and Macau same-store sales returned to a positive growth in November. Then this slide shows the same-store sales growth of major products in both markets. In the Mainland, retail demand for gold products was resilient, thanks to the strength in CTF • HUÁ collection and a relatively soft international gold price. Same-store sales growth of this product category was around 57% in the first half, outperforming gem set during the period. Well, for the quarter to date, gold products stayed robust with the same-store sales growth of around 28%.
In Hong Kong and Macau, same-store sales growth of gold products also outpaced gem set and reached 130% during the period. This trend extended into the October-November period. Profitability analysis. The Mainland continue to be our major profit contributor and accounted for over 95% of the group's core operating profit in the period. The GP margin, as explained in an earlier slide, the GP margin was actually affected by a high- base, which was one-off in the same period last year, and also by higher contribution of wholesale and also gold products.
While the increase in wholesale business would also bring for a favorable operating leverage effect, therefore, the SG&A ratio has lowered by 380 basis points to under 13% in the period. As a result, COP margin stayed at around 11% in the first half for Mainland. For Hong Kong and Macau, adjusted GP margin also normalized to around 25.5%. SG&A ratio decreased from 42% last year to 23% in the period due to favorable operating leverage. COP margin in Hong Kong and Macau was lifted to 3.4% in the period. Analysis of our operating expenses.
Our cost structure for our operating expenses was around 45% fixed in nature and around 55% variable during the period. Our variable components relate largely to the retail business rather than the overall top-line revenue. Therefore, you can see different cost items have diverse behavior according to their nature. Variable costs, like concessionaire fees, increased by around 40%, roughly in line with the growth of our mainland retail business. While expenses with mixed nature, like staff costs, increased by around 20%-30%. A&P and packaging materials exceptions this year as we tightened those items last year. While, when business recovers in this first half, they're back to a relatively normal level now. Staff costs.
Staff costs and related expenses expanded by 34% and 2.5% in the mainland and Hong Kong, Macau, respectively. Fixed components rose by 37% year-on-year in the mainland, which was mainly attributable to the revision of staff remuneration package during the period in order to attract and retain talents. In Hong Kong, Macau, variable staff costs increased by 35% year-on-year, which was largely in line with business growth. While fixed staff costs declined by 11% due to attrition. Leases. In the mainland, we have roughly 60% of our stores which are in concessionaire model, and the concessionaire fees ratio edged down to 8.1% in the period.
While the other 40% stores are mostly street-level stores or those in shopping malls, which are in the fixed rent model. The lease-related expenses ratio was also trimmed slightly to 4.3%. In Hong Kong, Macau, these related expenses fell by 37%, mainly representing the sharp reduction in right-of-use assets depreciation as the respective assets were written down in last year. While these related expenses ratio shrank by 800 basis points to 5.6%. During the period, we renewed leases of 30 POS, and the average reduction was around 70% relative to the last contract. Overall inventory balances increased by 29% and reached HKD 55 billion as of end of September, as we need to prepare inventory for seasonal demand in the second half and retail network expansion in mainland China.
These balances included around HKD 12 billion inventories consigned in the franchise stores, representing more than 20% of the total inventory balances. We believe up to the end of this financial year the inventory balances would be around like 5% lower compared to the current level, which would be around like 53 billion. Inventory turnover period for this year would be around 20-30 days lower compared to last year, reflecting a healthier inventory situation. CapEx. We have a total of around HKD 600 million CapEx in the period, and were mainly spent on our POS as a result of POS expansion and renovation and investment in our smart retail projects.
We maintain our full- year CapEx budget at around HKD 1.5 billion. Capital structure, bank borrowings and gold loans were HKD 7.6 billion and HKD 13.6 billion respectively, as gold inventory balances increased. Gold hedging ratio was in the range of around 45%-55% during the period, and the ratio was 33.5%, as of end of September. Net gearing ratio including gold loans was around 44%, while excluding gold loan net gearing ratio would be barely at 2.3%. Finally, operating cash flows before movements in working capital, net with leases paid was around HKD 5 billion. After cash used for inventories and CapEx, our free cash flows was around HKD 2.1 billion. This is basically good for our interim dividend payment.
Other major cash flow items include a HKD 1.2 billion increase in bank borrowings and HKD 2.5 billion used for the payment of dividend. As of September this year, the company's cash and bank balances stay at a healthy level of HKD 6.9 billion compared to HKD 6 billion six months ago. I will turn over to Mr. Chan and Kent for the business development in the respective market. Thank you.
[Foreign Language]
[Foreign language]. Before Kent presents, Danita will provide a brief English interpretation of Chan's presentation on the Mainland China segment. Danita, please.
Okay. Let me recap on Mr. Chan's presentation. During the period, we further implemented our Dual-Force Strategy. Under our retail expansion strategy, we upscale our business in the mainland and develop new product offerings in order to enlarge our market share. As of September this year, we have 5,070 POS in the mainland. We opened a net of 624 Chow Tai Fook Jewellery POS in the mainland during first half. More than half of these openings were located in Tier 3 and Tier 4 and other cities, where they achieve a stronger RSV growth than our Tier 1 and Tier 2 cities. All net openings during the period were in franchise format. As at September this year, approximately 70% of our POS in the mainland were franchise stores.
RSV growth of franchise POS was around 100% during first half, supported by the new openings and a steady ramp up of stores productivity. Same store sales growth of franchise POS was reported at 52% in first half. For full- year openings, now we expect to open a net of 1000 Chow Tai Fook Jewellery POS in this financial year. We will continue to offer differentiated products to meet the needs of our customers throughout their lifetimes. For instance, for T MARK, we shall continue to diversify T MARK collections such as Guardian of Life and Forever Young 88 collections. In first half, T MARK contributed 23% of our diamond product RSV in mainland.
We shall also deepen the reach of our Chow Tai Fook CTF HUÁ collection by expanding the product offerings, exploring new crossover collaborations, and opening exclusive zones. Its contribution to the gold products RSV in the Mainland further lift to 43% in first half. I shall pass it to Kent to update on Hong Kong and Macau segment.
Okay, thank you. In Hong Kong and Macau and other markets, RSV rose by 55.3% thanks to an improving local consumption in Hong Kong, a recovering tourist spending in Macau and a resilient performance in Hainan duty-free shops. In Hong Kong and Macau, we underwent retail network consolidation during the period and closed a net of 4 points of sale, mainly in touristic areas such as Tsim Sha Tsui and Mong Kok. Further point of sale consolidation will be considered upon the timing of border reopening and leasing market condition. In other markets, we added 1 duty-free shop in Hainan during the period so as to serve our travel retail consumers who were affected by the international travel suspension and disruptions. We will focus on regions with a higher domestic consumption in the short- term and continue our business expansion once international travel resumes.
I return over to Bobby to walk through our smart retail strategy, business outlook and strategy.
Thank you, Kent. Since we believe that touch points are important for brands to establish connection with customers, during the period, we focused on expanding our online channels and optimizing our omni-channel integration. RSV of our smart retail in the mainland surged at around 160% during the period. Thanks to our smart retail applications. E-commerce also registered a strong sales performance, which contribution of our smart retail business to the RSV in the mainland is twenty-nine percent. Our average selling price of smart retail application was roughly three times that of the e-commerce platform as they enable closer connection and stronger trust with our customers, which driving the brand ASP to HKD 2,700 in the first half, versus HKD 1,900 in the same period last year. In terms of volume, its shares of the business lead to 16.4%.
Now I'm going to jump into more detail on e-commerce first. The rapid changes in the consumer habits due to the pandemic have prompted us to increase our presence in various online channels. For instance, we joined third-party marketplace such as Douyin, Pinduoduo, and others during the period, and we shall continue to launch hot selling and online exclusive products to differentiate our product offering in order to meet diverse customer needs and follow trending topic to boost sales. In the first half of 2022, online exclusive products accounted for around 37% of the RSV on our e-commerce platform. The next one I'm going to talk about is our CloudSales 365.
As a result of greater trust with our customers through CloudSales 365 channels, its ASP increased gradually and was 1.8 times higher than that of our e-commerce platform in the public domain during the period. Another one is very important for us, we call Cloud Kiosk. As of September this year, around 47% of our point of sale in Mainland China have already installed Cloud Kiosk. This one I'm going to talk about is our D-ONE mini program. During the period, we continued to expand our product offering on D-ONE, our digital jewelry customization platform, by including customization service for couple rings and T MARK Forevermark collections. The D-ONE contributed 4.3% of our diamond products RSV in the mainland during the period.
Through data analysis, we noticed that customer tendency to customize diamond jewelry with higher carat size and popular product collections. For example, around 10% of our one carat size diamond product is or above, and around 11% of our popular Guardians of Light collection were sold through our D-ONE in the Mainland China. It is encouraged to see that ASP of products customized through D-ONE will rose continuously and lifted to double times higher than our same store gem set jewelry ASP in the Mainland China. In the future, we will strengthen product offering in this area. Also our customer relationship management program has partnered with K Dollar program of New World Development.
Now our members are entitled to more privilege and enjoy seamless experience of earning and redeeming rewards, not only in Chow Tai Fook but also in K11, New World Development as well as New World China. We will leverage on this vast business ecosystem to expand our customer base. As of September this year, we have about 3.4 million members in Mainland China with a repeat purchase ratio around 31% in the period. In Hong Kong and Macau, the number of members was approximately 1.3 million, and the repeat purchase ratio was lifted to around more than 52%. To conclude, despite the macro uncertainties, we managed to deliver satisfactory results with our Dual-Force Strategy in the first half of financial year 2022.
In Mainland China, we expect that business growth in the second half may decelerate due to a relatively high- base. Yet, under the government's 14th Five-Year Plan, steady progress of rural revitalization will further stimulate business in the Mainland. This implies abundant opportunities and development potential with respect to the retail industry. We are therefore optimistic about the macroeconomic development and the prospects of the jewelry industry in the Mainland. Going forward, Mainland China market remains the core part of the group's retail expansion strategy, and we shall push forward to capture more market share. We will also continue to utilize technology to create exceptional customer experience, optimize the smart retail application, and keep abreast of customer needs with the help of the data. Even if Hong Kong's major border crossing reopen, we expect the number of tourists may not improve significantly in short- term.
Thus, we will continue to engage with customers by organizing members exclusive events aiming to satisfy local needs. Operation in Macau will depend on the development of the pandemic. We expect that the retail market will gradually recover upon reopening of the border crossings. At the same time, we will continue to improve operational efficiency and optimize business strategies in the Hong Kong and Macau market. This is the conclusion of our presentation today. Thank you.