Good evening, ladies and gentlemen. Welcome to the live audio webcast of analyst and investor session on Chow Tai Fook Jewellery Group interim results for the financial year 2021. Let me introduce the management today. They are Mr. Kent Wong, the Managing Director. Mr. Hamilton Cheng, the Executive Director. Hamilton is responsible for the financial management and corporate operations. 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 the sustainable development and innovation. 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. Kent will present the business update. Bobby will give an update on the group's individual brands, e-commerce, and O2O related business, and customer relationship management.
Finally, Kent will conclude the presentation with the group's business outlook and strategies. After that, we will have Q&A session. Now, may I invite Hamilton to present. Hamilton, please.
Thank you. Hi. Good evening, everyone. I'm pleased to announce our interim results for the first half fiscal year 2021. The group's revenue declined by 16.5% to HKD 24.7 billion in this period. Business in mainland China witnessed a steady recovery on back of the easing COVID-19 situation, especially in the second quarter. Whereas performance in Hong Kong, Macau, and other markets remained sluggish. Same-store sales in mainland China stayed flat, and that of Hong Kong, Macau declined by more than 65%. Core operating profit, excluding the impact of unrealized gain or loss on gold loans and foreign exchange, which better reflects the operational performance of our business, grew strongly by 15.6% year-on-year to HKD 4.1 billion. The increase in core operating profit was mainly boosted by the margin expansion as gold price rose. Profit attributable to shareholders surged 45.6% to HKD 2.2 billion.
Basic earnings per share amounted to HKD 0.22. The board has declared an interim dividend of HKD 0.16, representing a payout ratio of around 72% in this period. Operational highlights, we opened a net of 303 POS during the period, bringing the total number of POS to 4,153 at the end of September, which included 3,847 Chow Tai Fook Jewellery POS. Net openings in mainland China reached 310 POS, and we closed a net of five POS in Hong Kong, Macau, and two POS in other markets during the period. Retail sales value of our e-commerce and O2O related business in mainland China surged 21.8% in the period, accounting for 5.6% in terms of RSV and 14.3% in terms of volume of our mainland China business. CTF HUÁ Collection continued to receive buoyant demand.
Its contribution to our gold jewelry and products RSV in mainland China further expanded to 35.6% during the period. For T MARK, its contribution to our diamond products RSV expanded to 22.3% in mainland China during the period, while that of Hong Kong, Macau stayed above 27%. Here in the income statement summary, I'll walk you through the major financial ratios. First, it is about adjusted GP margin that improved notably by 440 basis points to 35.1% in the period, benefiting mainly from the like-for-like margin improvement in both retail and wholesale business as gold price surged. SG&A expenses decreased by 14.3% to HKD 4.9 billion. SG&A ratio increased slightly by 50 basis points year-on-year to 20% due to operating deleverage. Core operating profit increased by 15.6% year-on-year, and its margin widened by 460 basis points to 16.5%. Revenue breakdown, first by reportable segment.
Revenue from mainland China increased by 4.9% during the period in light of the easing COVID-19 situation. Its contribution to the group's revenue reached 86% during the period. In Hong Kong and Macau and other markets, revenue contracted nearly 63% year-on-year as business suffered due to challenging macros and the closure of major border crossings during the period. For revenue by product, revenue of gold jewelry and products shrank by 21.2% during the period as gold price surged deterred retail demand for the gold jewelry. Its contribution to the group's revenue reduced to 60.9% during the period. On contrary, watches delivered a robust revenue growth of 17% during the period, boosted by strong domestic demand in mainland China amidst international travel restrictions. Here is a same-store sales growth trend for the past six quarters. In mainland China, same-store sales stayed flat in the period.
Same-store sales rebounded to a positive growth of 11% in the second quarter versus a double-digit decline in the first quarter as business activities and consumer sentiment revived. While in Hong Kong and Macau, same-store sales was down by more than 65% during the period as customer traffic remained stagnant. It declined, narrowed in the second quarter, thanks to a lower base of comparison. An update for the first seven weeks in this quarter. During the period, for the quarter-to- date, same-store sales growth in mainland China sustained a positive trend at 12%, similar to the second quarter. While in Hong Kong and Macau, same-store sales growth demonstrated a continuous improvement and is narrowed to a decline of around 24%. An analysis by major products.
For gold jewelry and products, as mentioned, demand for gold jewelry, in both mainland China and Hong Kong and Macau was affected by a surge in average international gold price, especially during the first quarter. However, ASP of these gold products was lifted by around 16% in mainland China. In converse, ASP of these gold products in Hong Kong and Macau dropped 13.6% due to a shift of sales mix towards lower ASP products. For gem-set platinum and karat gold products, same-store sales of these products in mainland China declined by 1.9% in this period, whereas gem-set ASP was lifted slightly to HKD 6,400 per piece during the period. While in Hong Kong and Macau, ASP of gem-set jewelry recorded a notable increase to HKD 13,400 from HKD 11,000 in the same period last year. An update for the first seven weeks in this quarter.
In Hong Kong and Macau, same-store sales growth of gem-set and karat gold products rebounded to a positive growth of 39%, boosted by a favorable comparison base, our promotional efforts, and improved traffic. An analysis of our operating profit and profitability. In Mainland China, our COP recorded a strong growth of 42.5%, while COP of Hong Kong and Macau and other markets also turned around to a gain of HKD 28 million versus a loss of HKD 94 million in the second half last year, thanks to the margin improvement. Mainland China continued to be our major profit contributor and accounted for almost 100% of the group's operating profit in this period.
In terms of adjusted GP margin in mainland China, the margin expanded by 270 basis points to 34.6% in the period as like-for-like GP margin improved. SG&A ratio decreased by 190 basis points to 16.5% in the period, thanks to relief received on major SG&A items, cost saving, and operating leverage. As a result, COP margin in mainland China was lifted by 500 basis points to 19.1%. For Hong Kong, Macau, and other markets, adjusted GP margin improved significantly by 10 percentage point to 38.1%, driven by both the surge in gold price and the like-for-like margin improvement in jewelry trading. SG&A ratio increased substantially from 21.8% to 41.6% due to operating deleverage. COP margin stayed positive at 0.8% in the period, benefited from the government subsidies received, which were recorded as other income.
SG&A expenses decreased by 14.3% to HKD 4.9 billion in the period as we managed cautiously while SG&A ratio increased slightly by 50 basis points to 20%. For the major SG&A components are walk you through in the following two slides. First, it's about the staff costs and related expenses. In mainland China, the staff cost was down by 4.7%, and in Hong Kong and Macau is down by 32%. The expenses reduction in mainland China was mainly driven by the decrease in fixed portion as there was government relief on social insurance contribution of HKD 30 million due to the COVID-19 situation.
In addition, the calculation basis of employers' contribution on the social insurance was also adjusted down by the government as compared to the same period last year. In Hong Kong and Macau, variable staff costs shrank by 51% year-on-year in the period, which was largely in line with the drop in revenue. Fixed staff costs also declined by 17% due to attrition and reduction on some allowances. During the period, we also received HKD 107 million from Employment Support Scheme, which was recognized in other income. An analysis of rent and concessionaire fees. In mainland China, concessionaire ratio edged down to 8.2% in the period, mainly due to the rate reduction from the shopping malls and department stores. In Hong Kong and Macau, these related expenses reduced by 21.5%, yet its corresponding ratio expanded by 740 bps to 13.6%.
The average rental renewal reduction was around 45% relative to the last contract. Rent concession of HKD 76 million was granted from landlords in the period, which was recognized as other gains in the P&L. For the full year, we believe that we shall achieve an average reduction of around 40%-45% upon rental review, and overall rental costs in Hong Kong and Macau should see a reduction of around 20%-25% for the full year. As mentioned before, you may heard of quite some situations and quite some figures that were specific to this period. For example, the improvement in margin of gold products due to the increase in gold price. For example, the one-off government subsidies and also the rent concession and also the foreign exchange gains.
There are also an impairment on the right of use of assets and also our fixed assets for the stores in Hong Kong. These items may or may not repeat in the future, which formed major components that's affecting the change of profits in the period. This is an analysis for your easy understanding of the major drivers of the increase of 45% of the net profits during the period. We turn to inventory analysis. The overall inventory balance increased by about 2% to HKD 43 billion as at end of September, mainly due to gold price increase. By weight, our inventory balance of gold products was actually trimmed by more than 9% year-on-year. Together, with the 2% or 3% reduction on the inventory of gem set and karat gold on a constant price basis, our inventory would have decreased by about 5%.
Inventory turnover period was prolonged by 97 days compared to the last fiscal year due to slow sales in Hong Kong and Macau. However, as of end of September, approximately 17% of the inventory balances were actually consigned inventories that were held for the franchised POS, which represent around 80 days in terms of turnover. While we are expanding our presence in mainland China under our stringent procurement policy, we believe that inventory balances should maintain at around HKD 42 billion by March next year, which would be similar to the level of last financial year, and inventory turnover period should also improve to around 380 days. Again, similar to the level of last year. CapEx, which totaled around HKD 350 million in this period, were mainly spent on our POS, covering renovation of existing stores and also the new openings in mainland China.
The total CapEx for the year would be around HKD 500 million-HKD 1 billion, similar to last year's level. For the balance sheet item, we actually don't have a lot of changes. The major change were from the reduction of bank borrowings and gold loans, which were down by HKD 2.1 billion and HKD 700 million respectively. Gold hedging ratio was around 56% as at end of September. Net gearing ratio, including gold loans, was 43.7% as of end of September, when excluding the gold loans, net gearing ratio would be around 7%. Lastly, for operating our movement in cash flows. Operating cash flows before movement in working capital, net with leases paid, was around HKD 5.6 billion, which is similar to the amount for the same period last year. After cash used mainly for inventories and CapEx, pro forma cash flows was around HKD 3.4 billion for this period.
Other major cash flow items included a HKD 2.1 billion reduction in bank borrowings and HKD 1.2 billion used for payment of final dividends last year. As at end of September, we maintain a strong cash and bank balance of around HKD 7.3 billion. Here conclude my presentation today, and I will turn over to Kent for the business development and update for our business ecosystem. Thank you.
Thank you, Hamilton. In mainland China, we opened a net of 310 POS during the period, among which 286 were Chow Tai Fook Jewellery POS. As of September this year, we had 4,009 POS in mainland China. Chow Tai Fook Jewellery POS contribute approximately 90% of our retail sales value in mainland China. This slide, further analysis on its RSV and POS network. By tier of cities, we continue our expansion strategy in mainland China by leveraging franchisee. Approximately 51% of the net openings during the period were located in Tier 3, Tier 4 and other cities. RSV growth in Tier 3, 4 and other cities outpaced Tier 1 and 2 cities during the period, largely attributable to the new openings. By operation model, all net openings during the period were in franchise format, whereas we closed a net of 45 self-operate point-of-sales.
As of September 2020, 61% of our point-of-sales in mainland China were in franchise format. 38% of these franchise point-of-sales were under the sell-in model. By store format, standalone stores and point-of-sales at shopping mall deliver a more resilient RSV growth during the period, while point-of-sale at department store were under pressure. We continue to execute our two-pronged strategy for the retail network in mainland China. In Tier 1 and 2 cities, we offer curated retail experience to fulfill the needs of more sophisticated customers. While in lower tier city and county-level cities, we expand presence and market share through the franchise model. A net of 286 Chow Tai Fook Jewellery point-of-sale were opened in the first half of FY 2021. We are confident that full-year net openings shall reach 450-500. Over 90% were in franchise format.
In terms of RSV and point-of-sale by geography, in Hong Kong, Macau and other markets, RSV record a steep decline during the period as the pandemic continued to weigh on international travel and tourist-related consumption. Share of RSV settled in China UnionPay, Alipay, WeChat Pay or RMB in Hong Kong and Macau dropped to 12.1% from 39.7% in the last year periods. Retail network management. In Hong Kong and Macau, we closed a net of five point-of-sale in the first half FY 2021, mainly in touristic areas such as Tsim Sha Tsui and Causeway Bay. With some lease that we renewed or expect to renew at a shortened duration to take advantage of a more favorable terms, we expect the net closing this year will be around five. Improving store productivity and rationalizing retail networks and store-related costs shall remain our priority in the midterm. Other market and countries.
We closed a net of two Chow Tai Fook Jewellery point-of-sale in Japan and Korea during the period. We shall explore opportunities to open store in Southeast Asia when international travel resumes. With a solid foundation built through our Smart+ 2020 strategic framework, we are pleased to move forward with our Dual-Force Strategy. We shall expand our footprint in an agile way while we should also focus on digital empowerment. In order to deliver exceptional customer experience that creates long-term brand differentiation and loyalty. This shall be achieved under our ecosystem. The retail expansion sector refers to the diversified product offerings and experience from our physical retail networks. The digital empowerment sector is the omni-channel and smart tools that we could complement our physical retail network and achieve greater synergies, as well as building up both public and private domains.
The cooperation sectors refers to our initiative to redefine the jewelry industry ecosystem through cooperation and co-creation. We continue to innovate and invest in products and experience of our flagship brand. In terms of product, Chow Tai Fook HUÁ Collection stayed popular among the young customer in Mainland China. Its contribution to the gold jewelry and product RSV further expand to 35.6% during the period, outperforming our generic gold products. In regard to T Mark diamond, its share, the diamond product RSV in Mainland China was also lift to 22.3% in first half of FY 2021. We just made an announcement that our AI diamond grading certificate for T Mark will be introduced in the first half of 2021. Empowered by AI and big data, the process of diamond color and clarity grading will take only four minutes, offering customer a high consistency diamond appreciation experience plus an extra assurance.
I will turn over to Bobby to walk you through other individual brands and digital empowerment sector.
Okay. Thank you, Kent. For HEARTS ON FIRE, we have launched the LORELEI REVERIE Collection and amulet in July 2020 to broaden the reach of Lorelei collection. Going forward, the presence of HEARTS ON FIRE will focus on shop-in-shop and counter-in-shop under the flagship brand, Chow Tai Fook. In order to penetrate into the high-end market in Mainland China, our natural colored gemstone specialist, ENZO, has integrated with the resources to promote its brand and product in all channels. As of September 2020, it had 65 point of sale in Mainland China. Our two young segment, we are talking the brands SOINLOVE and Monologue, aim to offer innovative products and experience to younger customers and strive to enhance digital presence in first half of FY 2021. Online sales accounted for around 45%-50% of both SOINLOVE and Monologue RSV in the Mainland China.
We also collaborated with different brands such as a Japanese comics character, the Detective Conan and Barbie, to add newness to our product portfolio. A list of five SOINLOVE point of sale and 16 Monologue point of sale were opened in first half of FY 2021, mainly in higher tier city in Mainland China. We shall continue our expansion in higher tier city in order to connect more customers with our brand's personalities. In the digital empowerment sector, we aim to stay close to our customer by striking an optimal balance between technology and human touch. CloudSales 365 is a mini program that bridges our e-shop and the customers, allows both of our staff and our franchisee salespeople to proactively engage the customer by sending product promotions and information to build a close connection and rapport with customers.
We are delighted to see that the private domain traffic generally leads to higher sales conversion rate than the e-commerce platform. In the first half of FY 2021, we reached over 2 million customers through this tool. The Cloud Kiosk is an O2O hub which allows customers to enjoy shorter transaction time and wider product selection at the store front. As of September 2020, Cloud Kiosk was installed at over 1,000 spots, primarily in Mainland China. We shall continue to expand its coverage to 1,400 by the end of the financial year. Our e-commerce and O2O-related RSV in Mainland China surged by 21.8% during the period, thanks to our efforts in O2O retailing. We also enhanced our customer engagement via live streaming and short videos in third-party marketplaces. Its contribution to the RSV in Mainland China edged up to 5.6% and it amounted to 14.3% in terms of volume.
The average selling price on our e-commerce and O2O-related business increased to HKD 1,700 in the first half of 2021 instead of the HKD 1,300 in the last year. Lastly, here's an update on our customer relationship management. As of September 2020, we had approximately 2.7 million members in our membership program in Mainland China. The repeated purchase ratio was lifted to around 28% in the first half of 2021 financial year. In Hong Kong and Macau, the number of members was about 1.2 million, which is encouraging repeated purchasing ratio of around 45% instead of 36% on last year. Now I will turn to Kent for the business outlook and strategies. Thank you.
Okay. Thank you, Bobby. To conclude, first half FY 2021 was a challenging period, but the COVID-19 pandemic is expected to be under control in the market where we operate. Our business performance for second half FY 2021 would improve steadily. As we expect Mainland China will continue to focus on domestic consumption growth, we are optimistic about the mid-to-long-term prospect of the jewelry market in Mainland China. In Hong Kong and Macau, with a more stable pandemic situation, we believe that the domestic market has bottomed out. When the major border crossings will open, the visitation and retail market would recover gradually. In Mainland China, we shall continue our market expansion strategy through franchising model and online/offline channel integration to take advantage of digital trends, and to implement our differentiation strategy to better serve each unique customer segments.
For Hong Kong and Macau, we shall continue to enhance our operational efficiency and refine our business strategies. We would leverage our retail networks and talents as well as our omni-channel capabilities that we have developed in order to offer customer a seamless shopping experience at any time, anywhere with optimal balance between technology and human touch. We are delighted to see that we are steadily moving towards our four long-term goals. One, strengthen our market leader position through further market penetration. Second, develop a comprehensive jewelry ecosystem. Third, be a tech-savvy jewelry company through harnessing innovation and technology. Lastly, improve operational efficiency through digital transformation. Going forward, we would implement our Dual-Force Strategy to see us through continual expansion of footprint and digital empowerment, which would enable our customers to experience a graceful fulfillment through jewelry. This concludes our presentation today. Thank you.