Good evening, ladies and gentlemen. Welcome to the live audio webcast of analyst or investor session on Cao Tai for Jewellery Group's Annual Results for the financial year 2021. Let me introduce our management today. They are Mr. Ken Wong, the Managing Director, Corporate and Hong Kong, Macau and Overseas Mr.
Mr. Hamilton Chen, the Executive Director. Hamilton is responsible for the finance and information functions of the group Mr. Peter Sun, 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 Ong, the Director of Investor Relations and Corporate Communications. Firstly, Mr. Hamilton Chan will present the annual results, operational highlights and financial review Mr.
Chen Sai Chen and Mr. Ken Wong we'll 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 strategies. After that, we will have a Q and A session. This session will be conducted in English generally, that Mr.
Chen Sai Chen shall speak in Mandarin with English interpretation afterwards. Now, may I invite Hamilton to present? Hampton, 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 percent to JPY 70,000,000,000 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 debt of Hong Kong 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 KRW8.6 billion. This increase was mainly attributed to a well contained SG and A and operating leverage. Profit attributable to shareholders surged to KRW6 1,000,000,000 more than doubled last year. Basic earnings per share amounted to HK0.60 The Board has proposed a final dividend of HK0.24 per share. Full year dividend amounted to HKD0.40 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 Cao Tai Folk Stores in Mainland China during the year, bringing the total number there to 4,098 at the end of March. Momentum of our CTF Hua collection continued to be robust. Its contribution to gold products RSV in Mainland China further expanded to almost 40% during the year.
For TMAC, its contribution to our diamond products RSV increased to nearly 25% in Mainland China, while debt in Hong Kong Macau was lifted to 31%. Under our smart retail strategy, RSV of our e commerce and OTO 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 bps 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 and A expenses was well managed at RMB11.8 billion and the ratio contracted by 3.50 bps year on year to under 17% due to operating leverage. Core operating profit, which excluded the impact of unrealized gain of loss on gold loans and foreign exchange increased by 51.7% year on year to 8,600,000,000 yen and its margin widened by 230 bps to 12.3%. Revenue from Mainland China jumped 46% during the year, supported by new openings, improving consumer sentiment and the 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 Macao 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 had deterred retail demand during the first half, sales of this Product category rebounded significantly in the second half when gold price 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 to sales growth in Mainland China, same to sales revived and turned positive in the second quarter amid an easing Pandemic situation there, coupled with the resilient demand and an exceptionally low base of comparison, our same store sales growth accelerated to over 140% in the 4th quarter in Mainland China. As a result, same store sales in Mainland China increased by 32%. In Hong Kong Macau, however, muted customer traffic led to a 41% drop in central sales during the year, yet central sales rose over 30% in the 4th quarter, attributable to a recovery of low coal consumption. An update for the April May in the past 2 months during April May, same store sales growth in mainland China sustained a positive trend at around 50%, While in Hong Kong Macao, single sales growth lifted further to nearly 160%, driven by local consumer spending. And this slide shows the same store sales growth of major products in both markets.
Firstly, 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 Gemset during the year. And in April May, Gold products stayed resilient with same store sales growth of more than 70%, continuously outperformed gem set. Well, in Hong Kong Macao, gold products phenomenon didn't happen.
Instead, our promotional efforts successfully attracted local customers' spending on gem set and same store sales growth outpaced gold products in the year. Yet in April 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 to and accounted for over 95% of the group's operating profit. And adjusted GP margin in Mainland China contracted by 2 50 bps to 28% with the higher contribution of our wholesale business, gold products and watches in retail, which are relatively lower margin segment.
SG and A ratio decreased by 3 80 bps 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 bps to 13.8%. For Hong Kong Macau, adjusted GP margin improved remarkably by 200 bps to 29.4 percent, driven by better product mix and like for like margin improvement both in retail and jewelry trading business. SG and A ratio distributed from 25% to around 28%, however, COP margin stayed positive and 4 at around 4% in the year. And then we have an analysis on the half yearly profitability.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] In Mainland China, in general, our second half adjusted GP margin is lower than our first half due to a higher gold mix During the festive season, our adjusted shipping margin in the second half was down by 490 bps 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%, at similar level as second half last year. For Hong Kong Macau and other markets, during the second half, adjusted GP margin was down by 100 20 bps year on year to around 25% due to the impact from jewelry trading. However, it was partially offset by like for [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Margin improvement and a more favorable product mix. Thanks to our effective cost control and gradual versus recovery in the second half this year. Segmental SG and A ratio improved significantly to around 21% COE 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 and A, expenses was well managed to increase by just 2.5 percent to KRW 11,800,000,000 in the year and SG and A ratio contracted by 3 50 bps to 16.9% due to operating leverage and now effective cost control. In particular, A and P was down by 15% and packaging materials was almost flat during the year. For the major items like staff calls and lease expenses,
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] I should walk you through in the
next two slides. First is Safcor's. It rose by 14% in Mainland China and it was down by 21% in Hong Kong Macau. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] The expenses increased in Mainland China was mainly attributable to the increase in variable portion, which was in line with business growth. Fixed costs decreased by 4% during the year as there was a government relief and a lower calculation basis on social insurance contribution.
In Hong Kong Macau, variable staff costs shrank by 28% in the year, largely in line with The drop in revenue, fixed staff calls also declined by 70% due to attrition and a reduction on certain allowances. During the year, we also received KRW 160,000,000 from employment support scheme which was recognized in other income in the financial statement. And then lease related expenses. In Mainland China, concessionaire 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 Macau, lease related expenses fell by 31% during the due to the consolidation of POS and rental renewal reduction, yet its corresponding ratio expanded by 100 bps to 8.3%. In the year, we renewed leases of 46 POS [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] 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. However, average [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] 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.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] While we are expanding our presence in Mainland China, we believe that inventory balances shall increase by 10% by March last year with inventory turnover period to improve to below 300 days. CapEx in the year totaled KRW 839 1000000 and 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 KRW 1,500,000,000 as a result of POS expansion and renovation, Investment in our smart retail projects as well as expansion of our Wuhan Smart Manufacturing Center. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] And then this slide illustrates our few major items that affected our profits during the year. In our core operating profit that included one off income totaled RMB232,000,000, which aroused mainly from the government grants received in Mainland China and Hong Kong.
And as gold price softened near the financial year end and unrealized gain on gold loans was recorded versus the loss in the previous year. This led to another year on year increment of nearly a HK1 1,000,000,000 Hong Kong dollar. And there was also JPY 518,000,000,000 year on year increase in other gains and losses, which was mainly due to a net foreign exchange gain on renminbi of more than RMB300 1,000,000 and rand concession of 128 1,000,000 yen The increase in other expenses was partially due to the impairment on these assets based on situation in Hong Kong Macau. Also, there was an impairment on goodwill aroused on the acquisition of Horse 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 lead for us to penetrate into the higher end segment. Capital and return.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] In the year, we conservatively managed our balance sheet in times of uncertainty, hence we lowered our gold inventory balance by weight and lower 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 goal 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. And lastly, cash flow movements. Operating cash flows before movements in working capital, net with leases paid, was around KRW 10,000,000,000 in the year, an increase by around 46% from last year.
After cash used for inventories and CapEx pro form a free cash flows was around JPY 7,000,000,000 for the year. Other major cash flow items included a JPY 5,000,000,000 decrease in bank borrowings and JPY 2,800,000,000 used for payment of dividends. As of March this year, the company's cash and bank balances stayed at a healthy level of around KRW 6,000,000,000. And then I will turn over to Chengou and Kent for the business development in the respective markets.
Okay. Before we turn to Ken, let me recap Mr. Chen's presentation in English. 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 will continue to expand our business in Mainland China through 2 prong strategy.
We will continue to upgrade our stores to offer creative retail experiences in Tier 1 and Tier 2 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 Cao Dai Folk Jewelry POS in Mainland China. Half of these openings were located in Tier 3, Tier 4 and other cities where they achieved a stronger RSV growth than our Tier 1 and Tier 2 cities. All net openings in fiscal 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 Cao Dai Folk Jewelry Store.
We will also continue to execute differentiation strategies to make inroads into diverse customer segments. CTF Hua Collection remained popular among the younger customers and its contribution to our gold product RSV further expanded to 39.5 percent in fiscal year 2021. And 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 Ken to talk about the Hong Kong Macao segment.
Okay. Thank you, Danita. In Hong Kong Macao and other OC markets, RSV sharply declined during the year as the pandemic weighs on international travel and tourist related consumption. In Hong Kong Macau, we closed inlet of 5 point of sale in the year, mainly in touristic areas such as Timshua and Causeway Bay. Our trend on the retail network in Hong Kong will 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 5 duty free point of sale in Highland proven 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. Okay. So I'll go to further introduce our smart retail strategy. An 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 a way of choices and 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 doubled down on increasing public domain visibility. More content 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 improves our customization capability, but also drives higher operational efficiency that would differentiate us in the jewelry industry. Our RSV of our e commerce and auto related business in Mainland China grew strongly at 92% in the year, mainly attributable to our O2O platforms. E Commerce and O2O related business contributed more than 7% of our ISV in Mainland China and which trends to our smart retail applications. Average selling price of these applications was roughly 3 times that of the e commerce platform as they enable a closer connection and a more stronger trust with our customers and also driving the brand ASP of our e commerce and auto related business to HKD2800 in FY 2021 versus HKD1400 on last year. In terms of audience, share of the business amounted to almost 14.7%.
And now in this sole case, This is our smart retail applications. Our staff cemented their success with our smart mobile tool, Cloud Sales 365. In the year, more than 40,000 staff in our self operated store and franchise store used our Cloud Sales 365 to reach more than 3,700,000 customers. Not only did it attract new customers, Also, cloud sales 360x ASP and sales conversion rate, which is 80% higher than and 10x in our e commerce platform performance respectively. As at March this year, over 40% of our ports of sale have already installed Cloud kiosks in Mainland China.
Well, at a physical store, customer can look up a wide product selection online and shorten their transition 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, which with adjustment according to the different geographic needs and coming soon. Together with the initiative in enhancing the automation network 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 D1, 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 for D1 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 D1, both Customized products 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 Tmall were introduced to Devon during the year.
In February this year, we also launched Cao Tai Folk 10 Kuan Dilong Collection on D1, featuring rings that transform the refreshment of Nike to personal personalized message, thanks to our use of the innovative laser defense technology. Our customer relationship management system is integrated with CloudSells 3635 and partnered with K Dollar reward system of new wealth development to further our customer base and boost our recurring spending. As of March this year, we had over 3,000,000 members in Mainland China with a repeating per choice ratio of more than 29% in this year. In Hong Kong account, the number of members was about 1,200,000 and reached repeated purchase result was lift up to 44%. So to conclude, our Mainland China business continued to deliver strong growth performance in FY 2021 despite a challenging business environment.
With the government Through 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. And in Hong Kong and Macau market are facing multiple challenges. We believe that the domestic market has brought 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's 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 particularly, We will further enhance our automation level to meet the product needs. And this concludes our presentation today.
Thank you.
Thank you, Kent, Chan, Hamilton and Bobby.