Good evening, ladies and gentlemen. Welcome to the live audio webcast of analyst or investor session on Chow Tai Fook Jewellery Group's annual results for the financial year 2021. Let me introduce our management today; t hey are Mr. Kent Wong, the Managing Director, Corporate and Hong Kong, Macau, and Overseas. Mr. Chan Sai-cheong, the Executive Director, Mainland China; 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, Macau, and overseas business; Mr. Bobby Liu, the Executive Director. Bobby is responsible for retail technology applications and productions management; and Ms. Danita On, the Director of Investor Relations and Corporate Communications. Mr. Hamilton Cheng will present the annual results, operational highlights, and financial review.
Mr. Chan Sai-cheong and Mr. Kent Wong will talk about business updates in Mainland China and Hong Kong, Macau, and other markets respectively. Mr. Bobby Liu will give updates on the group's smart retail strategy and conclude the presentation with the group's business outlook and share strategies. After that, we will have a Q&A session. This session will be conducted in English generally, but Mr. Chan Sai-cheong shall speak in Mandarin with English interpretation afterwards. Now, may I invite Hamilton to present. Hamilton, please.
Thank you. Good evening, ladies and gentlemen. I'm pleased to announce our fiscal year 2021 annual results. The group's revenue rose by 23.6% to $70 billion in the year, driven by our retail expansion in Mainland China and a solid recovery there during the second half of the year. Same-store sales in Mainland China rose by 32%, while that of Hong Kong and Macau declined by 41%. 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, grew strongly by more than 50% year-on-year to $8.6 billion. This increase was mainly attributed to a well-contained SG&A and operating leverage. Profit attributable to shareholders surged to $6 billion, more than doubled last year. Basic earnings per share amounted to HKD 0.60.
The board has proposed a final dividend of HKD 0.24 per share. Full-year dividend amounted to HKD 0.40, representing a ratio of around 66%. Operational highlights. In the year, we embarked on our Dual-Force Strategy to seek further market penetration in Mainland China and create greater synergy through smart retailing. Under our retail expansion strategy, we opened a net of 669 Chow Tai Fook stores in Mainland China during the year, bringing the total number there to 4,098 at the end of March. Momentum of our HUÁ collection continued to be robust. Its contribution to gold products RSV in Mainland China further expanded to almost 40% during the year. For T MARK, its contribution to our diamond products RSV increased to nearly 25% in Mainland China, while that in Hong Kong and Macau was lifted to 31%.
Under our smart retail strategy, RSV of our e-commerce and O2O-related business in Mainland China surged more than 90% in the year, contributing to 7.1% by value and 14.7% by volume to our Mainland China operations. Here, I will walk you through some major financial ratios. Adjusted gross profit increased by around 18% in the year as supported by the revenue growth and adjusted GP margin decreased by 140 basis points to 28.2% due to a higher sales contribution from our wholesale business, gold products, and watch retail business. This was partially offset by a favorable market mix with promising growth in Mainland China. SG&A expenses was well managed at $11.8 billion and the ratio contracted by 350 basis points year-on-year to under 17% due to operating leverage.
Core operating profit, which excluded the impact of unrealized gain or loss on gold loans and foreign exchange, increased by 51.7% year-on-year to $8.6 billion and its margin widened by 230 basis points to 12.3%. Revenue from Mainland China jumped 46% during the year, supported by new openings, improving consumer sentiment, and softened gold price in the second half as well as low base. Its contribution to the group's revenue reached 85% in the year. In Hong Kong, Macau, and other markets, revenue shrank 35% year-on-year as the challenging macros, pandemic, and closure of major border crossings weighed on consumer spending.
Revenue of gold products was up by 26% in the year. Despite that international gold price hike deterred retail demand during the first half, sales of this product category rebounded significantly in the second half when gold prices softened. Its contribution to the group's revenue expanded to 68% in the year. Watches also registered a strong growth of 55% in the year, fueled by a buoyant domestic demand in Mainland China and amid the international travel restrictions. Same-store sales growth in Mainland China. Same-store sales revived and turned positive in the second quarter, amid an easing pandemic situation there. Coupled with the receding demand and an exceptionally low base of comparison, our same-store sales growth accelerated to over 140% in the fourth quarter in Mainland China.
As a result, same-store sales in Mainland China increased by 32%. In Hong Kong and Macau, however, muted customer traffic led to a 41% drop in same-store sales during the year. Yet, same-store sales rose over 30% in the fourth quarter, attributable to a recovery of local consumption. An update for the April and May in the past two months. During April and May, same-store sales growth in Mainland China sustained a positive trend at around 50%, while in Hong Kong and Macau, same-store sales growth lifted further to nearly 160%, driven by local consumer spending. This slide shows the same-store sales growth of major products in both markets. First, in Mainland China, as mentioned, our sales was benefited from the softened gold price in the second half.
This happened mainly in Mainland China as the appreciation of renminbi made gold price even more attractive. This growth depends on demand, and thus, gold products outperformed gem-set during the year. In April and May, gold products stayed receding with same-store sales growth of more than 70%, continuously outperformed gem-set. While in Hong Kong and Macau, gold products phenomenon didn't happen. Instead, our promotional efforts successfully attracted local customer spending on gem-set and same-store sales growth outpaced gold products in the year. In April and May, both gold and gem-set rebounded significantly, largely because of the very low base last year.
Profitability analysis. In Mainland China, our core operating profit recorded a strong growth of 61% during the year. It continued to be our major profit contributor and accounted for over 95% of the group's operating profit. Adjusted GP margin in Mainland China contracted by 250 basis points to 28% with the higher contribution of our wholesale business, gold products, and watches in retail, which are relatively lower margin segment. SG&A ratio decreased by 380 basis points to 15% in the year, thanks to our cost saving relief received from government and operating leverage. As a result, COP margin was lifted by 130 basis points to 13.8%.
For Hong Kong and Macau, adjusted GP margin improved remarkably by 200 basis points to 29.4%, driven by a better product mix and like-for-like margin improvement, both in retail and jewelry trading business. SG&A ratio deteriorated from 25% to around 28%, however, COP margin stayed positive at around 4% in the year. We have an analysis on the half-yearly profitability. In Mainland China, in general, our second half adjusted GP margin is lower than our first half due to the higher gold mix during the festive season. Our adjusted GP margin in the second half was down by 490 basis points year-on-year to 24.3%, mainly due to a higher sales contribution from gold products and wholesale business, as well as like-for-like margin decline in gold products as gold price was decreasing in the second half.
Yet COP margin stayed at 11%, a similar level as the second half last year. For Hong Kong, Macau, and other markets, during the second half, adjusted GP margin was down by 120 basis points year-on-year to around 25% due to the impact from jewelry trading. It was partially offset by like-for-like margin improvement and a more favorable product mix. Thanks to our effective cost control and gradual business recovery in the second half this year, segmental SG&A ratio improved significantly to around 21% and COP margin was lifted to 5.4% in the second half versus a negative of 1.4% in the second half in the previous year. For SG&A, expenses was well managed to increase by just 2.5% to HKD 11.8 billion in the year. SG&A ratio contracted by 350 basis points to 16.9% due to operating leverage and our effective cost control.
In particular, A&P was down by 15% and packaging materials was almost flat during the year. For the major items like staff cost and lease expenses, I shall walk you through in the next two slides. First is staff cost. It rose by 14% in Mainland China and it was down by 21% in Hong Kong and Macau. The expenses increase in Mainland China was mainly attributable to the increase in variable portion, which was in line with business growth. Fixed cost decreased by 4% during the year as there was a government relief and a lower calculation basis on social insurance contribution. In Hong Kong and Macau, variable staff costs shrank by 28% in the year, largely in line with the drop in revenue. Fixed staff costs also declined by 17% due to attrition and a reduction on certain allowances.
During the year, we also received HKD 160 million from Employment Support Scheme, which was recognized in other income in the financial statement. Lease-related expenses. In mainland China, concessionary ratio edged down to 80% in the year, mainly due to the shift of sales mix towards gold products which are subject to lower rates. Lease-related expenses ratio also went down to 4.1% amid operating leverage. In Hong Kong and Macau, lease-related expenses fell by 31% during the year due to the consolidation of POS and rental renewal reduction, yet its corresponding ratio expanded by 100 basis points to 8.3%. In the year, we renewed leases of 46 POS, and the average reduction was around 40% relative to the last contract. Inventory and CapEx. Overall inventory balances stay at similar level as last year.
Average gold price increased by 24% versus last year, and the balance of gold products by weight was actually reduced by more than 20%. Inventory turnover period shortened by 69 days compared to the prior year. While we are expanding our presence in mainland China, we believe that inventory balances should increase by 10% by March next year, with inventory turnover period to improve to below 300 days. CapEx in the year totaled HKD 839 million, major CapEx was spent on our POS, covering renovation of existing stores and new openings in mainland China. CapEx in the coming year is expected to increase to around HKD 1.5 billion as a result of POS expansion and renovation, investment in our smart retail projects, as well as expansion of our Wuhan smart manufacturing center. This slide illustrates a few major items that affected our profit during the year.
In our core operating profit that included one-off income totaled HKD 232 million, which arose mainly from the government grants received in mainland China and Hong Kong. As gold prices softened near the financial year-end, an unrealized gain on gold loans was recorded versus the loss in the previous year. This led to another year-over-year increment of nearly HKD 1 billion. There was also a HKD 580 million year-over-year increase in other gains and losses, which was mainly due to a net foreign exchange gain on renminbi of more than HKD 300 million, and rent concession of HKD 128 million. The increase in other expenses was partially due to the impairment on these assets based on situation in Hong Kong and Macau.
Also, there was an impairment on goodwill arose on the acquisition of Hearts On Fire a few years ago as we decided repositioning of the brand so as to maintain the identity and heritage of the brand, while better serve the need for us to penetrate into the higher end segment. Capital and return. In the year, we conservatively managed our balance sheet in times of uncertainty. Hence, we lowered our gold inventory balance by weight and lowered our bank borrowings as well as gold loans during the year. As a result, net gearing ratio was reduced to around 90% from 57% a year ago, while our gold hedging ratio decreased to 38% as of March this year, which is largely a risk-off approach. Return on equity was lifted to 20% in the year, mainly due to enhancement in net profit margin and asset turnover. Lastly, cash flow movements.
Operating cash flows before movements in working capital, net with leases paid, was around HKD 10 billion in the year, an increase by around 46% from last year. After cash used for inventories and CapEx, pro forma free cash flows was around HKD 7 billion for the year. Other major cash flow items included a HKD 5 billion decrease in bank borrowings and HKD 2.8 billion used for payment of dividends. As of March this year, the company's cash and bank balances stayed at a healthy level of around HKD 6 billion. I'll turn over to Chan Sai-cheong and Kent for the business development in the respective markets.
Hamilton.
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Before we turn to Kent, let me recap Mr. Chan's presentation in English. We embark on our Dual-Force Strategy to seek further market penetration in Mainland China and create greater synergy through smart retailing. Under our retail expansion strategy, we will continue to expand our business in Mainland China through two-prong strategy. We will continue to upgrade our stores to offer greater retail experiences in Tier one and Tier two cities, while penetrating further into the lower tier and county-level cities by leveraging our franchisees. In fiscal year 2021, we opened a net of 669 Chow Tai Fook Jewellery POS in Mainland China. Half of these openings were located in Tier three, Tier four and other cities, where they achieved a stronger RSV growth than our Tier one and Tier two cities. All net openings in fiscal year 2021 were in franchise format, where we net closed 54 self-operated POS.
In the coming fiscal year, we expect to open at least 700 net openings of Chow Tai Fook jewelry store. We will also continue to execute differentiation strategies to make inroads into diverse customer segments. CTF HUÁ collection remain popular among the younger customers and its contribution to our gold product RSV further expanded to 39.5% in fiscal 2021. Our Guardian of Life collection also helped us gain market share in the diamond engagement ring market, and it contributed around 8.7% of our diamond RSV during the year. Now I'll pass to Kent to talk about the Hong Kong and Macau segment.
Okay, thank you, Danita. In Hong Kong, Macau and other overseas markets, RSV sharply declined during the year as the pandemic weighed on international travel and tourist-related consumption
In Hong Kong and Macau, we closed a net of 5 point of sale in the year, mainly in touristic areas such as Tsim Sha Tsui and Causeway Bay. Our trend, on the retail network in Hong Kong, we largely depend on the recovery upon border reopening and the outcome of negotiation with landlords. About 10 to 15 point of sales are under observation in financial year 2022. In other markets, we opened five duty-free point of sale in Hainan Province during the year, so as to serve our travel retail consumers and that have been affected by the suspension of international travel. We will focus on countries with a higher domestic consumption at the moment and continue our expansion strategy when international travel resumes. I will turn over to Bobby to share with you our smart retailing strategy, business outlook, and other strategy.
Okay. Thank you, Kent. I'll go to further introduce our smart retail strategy. Every customer expect nothing less than being treated as the single most important person by us. To the end, our omni-channel retailing aims to offer customers widely array of choices and the greater convenience. Our staff provide people-to-people engagement with digital tools and data to engage customers and helping them to enjoy their seamless shopping experience. We also double down on increasing public domain visibility. More contact points together with a more diversified smart retail experience, which could bring new customer and business opportunity to us. Meanwhile, a streamlined supply chain is key to our smart retail strategy. Not only that it improve our customization capability, but also drives higher operational efficiency that would differentiate us in the jewelry industry.
Our RSV of our e-commerce and O2O-related business in Mainland China grows strongly at 92% in the year, mainly attributable to our O2O platforms. E-commerce and O2O-related business contributed more than 7% of our RSV in Mainland China and which thanks to our smart retail applications. Average selling price of these application was roughly three times that of the e-commerce platform as they enable a closer connection and a more stronger trust with our customers. Also driving the brand ASP of our e-commerce and O2O-related business to HKD 2,800 in FY 2021 versus HKD 1,400 on last year. In terms of volume, share of the business amounted to almost 14.7%. Now in this showcase, this is our smart retail applications. Our staff cemented their success with our smart mobile tool, CloudSales 365.
In the year, more than 40,000 staff in our self-operated store and franchise store used our CloudSales 365 to reach more than 3.7 million customers. Not only did it attract new customers, also CloudSales 365 ASP and sales conversion rate, which is 80% higher than and 10 times in our e-commerce platform performance, respectively. As at March this year, over 40% of our point of sale have already installed Cloud Kiosk in mainland China. Well, at a physical store, customer can look up a wide product selection online and shorten their transaction time. A gamified experience also offered at the kiosk. This kind of smart retail application were also introduced in the Hong Kong and Macau market with adjustment according to the different geographic needs and coming soon.
Together with the initiative in enhancing the automation level of our supply chain and establish various digital platforms, we strive to deliver unparalleled customer experience. What is very most important of our new tools we call D-ONE, our pioneering digital jewelry customization platform and one of our C2M initiative was introduced to cater to the demand for customization product and exclusive experiences. It is encouraging to see that ASP of product customized through D-ONE was more than double the same store gem set jewelry ASP in mainland China. In our production process, we make full use of the IoT, the Internet of Things kind of technology to enable high level of automation and seamless connection with customers. With D-ONE, most customized product are ready for delivery within 24 hours as committed. An incredible fulfillment speed is the signature of this kind of platform.
Various brands and products such as Hearts On Fire and T MARK were introduced to D-ONE during the year. In February this year, we also launched Chow Tai Fook Tian Quan Di Lao collection on D-ONE, featuring rings that transform the reflection of light into personalized message, thanks to our use of the innovative laser deflection technology. Our customer relationship management system is integrated with CloudSales 365 and partnered with K Dollar reward system of New World Development to broaden our customer base and boost our recurring spending. As of March this year, we had over 3 million members in mainland China with a repeating purchase ratio of more than 29% in this year. In Hong Kong account, the number of members was about 1.2 million and which repeated purchase ratio was lifted up to 44%.
To conclude, our Mainland China business continued to deliver strong growth performance in FY 2021 despite a challenging business environment. With the government dual circulation strategy, we expect jewelry industry in Mainland China could benefit from the growth in domestic consumption. Therefore, we are optimistic about the mid- to long-term prospects of the jewelry market in Mainland China. In Hong Kong and Macau market are facing multiple challenges. We believe that the domestic market has bottomed out at the pandemic situation and is expected to become more stable. When the major border crossing reopen, the retail market will recover gradually. In the coming future, we will focus on our Mainland China business development. On one hand, we will continue our retail expansion strategy through penetration into lower tier cities, use our franchise model.
On the other hand, we will push forward our smart retail strategy through enhancing the retail experience and focus on O2O channel integration to take advantage of the digital transformation. In order to cope with future development and C2M in particular, we will further enhance our automation level to meet the product needs. This concludes our presentation today. Thank you.
Thank you, Kent, Chan, Hamilton, and Bobby.