Good evening, ladies and gentlemen. Welcome to the live audio webcast of analyst and investor session of Chow Tai Fook Jewellery Group's annual results for the financial year 2020. Let me introduce the management today. We have Mr. Kent Wong, the Managing Director; Mr. Hamilton Cheng, the Executive Director, Hamilton responsible for the financial management and corporate operations; Mr. Chan Sai-Cheong, the Executive Director, Mr. Chan is responsible for the mainland China business; 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; and Ms. Danita On, the Director of Investor Relations and Corporate Communications. Hamilton will present annual results, operational highlights, and financial review. Kent will present the business update. Bobby will give the update on customer experience, e-commerce, and CRM.
Finally, Kent will conclude the presentation with the group's business outlook and strategies. After that, we will have Q&A. May I invite Hamilton to present.
Thank you. Good evening, ladies and gentlemen. I am pleased to announce our annual results for the fiscal year 2020. The group had a stable performance in the first half, as supported by steady growth in mainland China. While it was overshadowed by macro uncertainties and COVID-19 epidemic in the second half. For the full year, revenue amounted to HKD 56.8 billion, down 14.9% year-on-year. Same-store sales in mainland China and Hong Kong and Macau declined by 15.1% and 38.7% respectively. 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, fell 18.4% year-on-year to HKD 5.7 billion.
Profit attributable to shareholders dropped by 36.6% to HKD 2.9 billion, and unrealized loss on gold loans of HKD 711 million was recorded as international gold price surged and gold loan borrowings increased during the financial year. Basic earnings per share totaled HKD 0.29. The board has proposed a final dividend of HKD 0.12 per share, full year payout ratio approximated 82.7%, supported by our strong cash flow and financial position. Operational highlights. We opened a net of 716 POS during the financial year, bringing the total number of POS to 3,850 at the end of March. Net openings in mainland China reached 711, while Hong Kong and Macau had net additions of four POS, mainly stores for multi-brands. There was also one net opening in other markets. Chow Tai Fook HUÁ Collection continued to be well-received by our customers.
Its sales reached RMB 8.2 billion during the year, and its contribution to our gold products retail sales value in mainland China further expanded to 32% versus 18% in last year. As of March this year, there were a total of 929 counter shop and four T MARK specialty stores. In the year, T MARK contributed 19.3% and 27.8% of diamond products retail sales value in mainland China and Hong Kong and Macau respectively. Retail sales value of our e-commerce business in mainland China was up by 3.4% year-on-year, accounting for 5.2% in terms of value and 14.4% in volume of our mainland China operations in the year. Here in the income statement summary, I will walk you through the major margins and ratios.
Adjusted GP margin improved by 170 basis points to 29.6% in the year, benefiting from the like-for-like margin improvement in both retail and wholesale business as gold price surged. SG&A expenses decreased by 3.9% to HKD 11.6 billion. Nevertheless, SG&A ratio increased by 240 basis points year-on-year to 24.4% due to operating deleverage. Core operating profit, which excluded the impact of unrealized loss on gold loans and foreign exchange, decreased by 18.4% year-on-year and margin declined 50 basis points. Yet it managed to stay at 10% despite the very challenging environment surrounding our key operations. A revenue breakdown analysis. The group revenue declined by 14.9% during the year, mainly attributable to the COVID-19 epidemic in the fourth quarter, a surge in international gold price that dampened the retail demand for gold products, and weak performance in Hong Kong. In mainland China, revenue was down slightly by 3.9% in the year.
Our store expansion strategy and steady same-store sales growth there supported a decent revenue growth of 12% during the first half, which buffered a 15.9% decline in the second half in the backdrop of the epidemic. Mainland China's contribution to the group's revenue was lifted to 71.8% in the year. In Hong Kong, Macau, and other markets, revenue dropped by 34%, and its contribution to the group's revenue fell to around 28% accordingly. Revenue breakdown by products. Revenue of our gold products decreased 16% in the year as a result of high comparison base and gold price volatility. Gold products contribution to the group's revenue was reduced by 120 basis points year-on-year to 59.9%. Revenue of gem-set jewellery also fell 17.5% year-on-year during the year due to challenging macros.
On the other hand, our platinum and karat gold products demonstrated a relatively better performance, backed by the successful launch of more contemporary collections and fixed-price gold jewelry in the year. Here is an illustration of our same-store sales growth in the past two financial years plus recent update for April and May this year. The epidemic and volatile macro environment inevitably affected both Mainland China and Hong Kong, Macau, in particular during the fourth quarter. Same-store sales growth in Mainland China in the first nine months of the year stayed positive at 2%, while it plummeted to a - 49.5% in the fourth quarter. As a result, same-store sales in Mainland China dropped by 15.1% during the year. Yet same-store ASP, average selling price, stayed on a favorable trend in the year with 11.7% increment.
Same-store sales in Hong Kong, Macau declined by 38.7% during the year as foreign declined, shadowed by the sluggish business environment in Hong Kong. An update for April and May. Same-store sales in Mainland China gradually recovers and declined level to 15%, while same-store sales in Hong Kong, Macau dropped to a negative 80%, similar to the February and March level. The group's Retail Sales Value dropped by 22.6% during the period, and China's contribution to the group's Retail Sales Value was around 89%. Same-store sales by products. For our gold products, the surge in international gold price dampened consumer demand in both Mainland China and Hong Kong, Macau. Yet both market enjoyed a teens growth in ASP during the year. ASP was lifted by 17% in Mainland China, thanks to the rise in gold price and success of Chow Tai Fook HUÁ Collection.
While in Hong Kong, Macau, ASP of gold products also up by 14.2%. For gem-set, same-store sales in Mainland China declined by 12.4%, mainly dragged by the fourth quarter weak numbers. While ASP increased slightly to HKD 6,400 from HKD 6,300 last year. In Hong Kong, Macau, sluggish demand has resulted due to the situation in Hong Kong and same-store sales of gem-set jewellery was down by 42.4%, while ASP stood at around HKD 11,000 level, similar to last year. For April and May, both gem-set and gold products delivered a sequential improvement in Mainland China with gem-set having a better performance. While in Hong Kong and Macau, same-store sales trend of both products remained sluggish. While profitability analysis. In Mainland China, our core Operating Profit recorded a growth of 1.2%. Hong Kong, Macau, and other markets registered a 70% decline.
Mainland China continued to be our major profit contributor and accounted for almost 90% of the group's core Operating Profit in the year versus around 55% five years ago. Adjusted GP margin in Mainland China improved sharply by 170 basis points to 30.5% in the year as like-for-like GP margin improved when compared to last year. SG&A ratio increased by 110 basis points to 18.7% in the year due to operating deleverage. Full year core Operating Profit margin expanded by 70 basis points, demonstrating a continuous improvements across the previous three financial years.
For Hong Kong, Macau, and other markets, adjusted GP margin grew by 110 basis points to 27.4%, driven by both a surge in gold price and an improvement in the GP margin of our jewellery trading business. SG&A ratio rose by 600 basis points due to operating deleverage. Therefore, COP margin of Hong Kong, Macau segment contracted 440 basis points to 3.7%.
An analysis of our SG&A. The total operating expenses decreased by 3.9% to around HKD 11.6 billion, whereas the second half portion dropped 10.8% year-on-year as we further tightened our expenses. Yet full year SG&A ratio worsened by 240 basis points to 20.4% due to operating leverage. For the major components, including staff costs, concessionaire fees, and lease expenses. In the past, I showed what you saw separately in the last two slides. Here we are focusing first on the depreciation and amortization. As we first adopted the IFRS 16 for this year, this has led to a significant increase in depreciation and amortization and a decrease in rental expenses. If such impact was excluded, depreciation and amortization would increase by 8.8% year-on-year. Packaging materials expenses increased 19.5% in this year as we enhanced our product packaging to lift brand value and provide better customer experiences. Staff costs.
Staff and related expenses was up by 6.1% in Mainland China, while down by 14.4% in Hong Kong and Macau. Incremental expenses in Mainland China were mainly attributable to the increase in variable performance-based portion in the first nine months of the year, as business growth was positive during the period. Such variable component was trimmed by over 40% year-on-year in the fourth quarter, as business was adversely affected in light of the epidemic. In Hong Kong and Macau, variable staff costs shrank by 27% in the year. Especially in the second half, this variable staff cost dropped nearly 50%. Rental in Mainland China, concessionaire ratio edged up slightly to 8.4% due to the shift in sales mix towards gem-set jewellery. In Hong Kong and Macau, these related expenses ratio expanded by 240 basis points to 7.3% due to operating leverage.
In the year, we renewed leases of around 20 POS, and the average rental renewal reduction was around 14% relative to the last contract. On the other hand, rental relief from landlords of more than HKD 30 million was received during the year. In the coming year, we believe that we will be able to achieve an average reduction of around 25%-40% upon rental renewal. Overall, rental costs in Hong Kong and Macau should see at least a 10%-15% reduction versus this year. In the inventory analysis, inventory balances, excluding packaging materials, increased by 7.7% and reached HKD 42.3 billion as at end of March, which is mainly due to the business disruption in the fourth quarter. Inventory turnover period was prolonged by 82 days when compared to that of last year.
As of March this year, approximately 13% of the inventory balances were consigned inventories that were held for franchise POS, which is equivalent to around 50 days in terms of turnover. With a stringent procurement policy and gradual business recovery in Mainland China, we target to have inventory balances back to around HKD 39 billion by March next year, similar to the FY 2019 level. Inventory turnover period in the coming years should improve to around 320 days. CapEx totaled around HKD 1 billion in the year. Major CapEx was spent on our POS, covering new openings and renovation of existing stores. In the coming year, we expect CapEx to stay at a similar level of around HKD 1 billion-HKD 1.1 billion. Changes in our capital structure.
Major change come from bank borrowings and gold loans, which were up by HKD 1.4 billion and HKD 3.3 billion respectively, as inventory balances and gold price increased. Gold hedging ratio by weight was 63% as of March this year. Net gearing ratio, including gold loans, was 57% as of March this year. When excluding gold loans, net gearing ratio would be around 16%. Lastly, cash flow. Operating cash flows before movements in capital, net with leases paid, was around HKD 7.1 billion, a decrease of around 8% compared to the month last year on the same basis. After cash used for inventories and CapEx, our pro forma free cash flows was around HKD 5.2 billion for the year. Other major cash flow items included a HKD 1.4 billion increase in bank borrowings and HKD 6 billion used for payment of dividend for last year.
As of March 2020, the company's cash and bank balances stay at a healthy level of HKD 7.2 billion. Here conclude my part, and then we turn over to Kent for the business update.
Okay, thank you, Hamilton. Let me share with you our retail network. In mainland China, we opened a net of 711 POS during the financial year. Among which 623 POS were Chow Tai Fook Jewellery POS. Following the completion of ENZO acquisition in January 2020, 59 POS were added to the group. As of March this year, we had 3,699 POS in mainland China. This slide show the retail sales value and POS network under Chow Tai Fook Jewellery POS, which contribute 90% of our RSV in mainland China. By tier of cities, as we have been leveraging franchisee to expand our presence in lower tier and county level city, about 53% of the net opening in FY 2020 were located in Tier 3, Tier 4, and other cities. In general, this city has a stronger RSV performance than Tier 1 and Tier 2 during the financial year.
By operation model, all net opening during the financial year were in franchise format. We closed a net of 14 self-operate POS. As of March 2020, franchise POS account for over 56% of our POS in mainland China. 34% of these franchise POS were operated under the sell-in model. By sale operate model during financial year 2020, we consolidate three self-operate standalone stores and 39 store at department store while we add a net of 28 POS in shopping mall. As a result, RSV contribution from shopping malls increased from 37.3% in FY 2019 to 41.5% in FY 2020. In recent year, we have adopt our POS expansion strategy in lower tier city and county level city in mainland China to capture growth potential due to consumption upgrade. 623 POS brand under Chow Tai Fook Jewellery were opened in mainland China in FY 2020.
COVID-19 inevitably affect our opening print in first quarter of FY 2021. As business recover over the last few months, we still expect to see a growth in store count in FY 2021. We expect the net open of FY 2021 shall reach approximately 400- 450. Meanwhile, we will continue to enhance customer experience in Tier 1 and Tier 2 cities through our segmentation strategy. In terms of RSV and POS by geography, the weak business environment in Hong Kong, coupled with the epidemic, led to a 32.1% drop in customer traffic in Hong Kong and Macau during FY 2020, result in a RSV decline in both Hong Kong and Macau. Share of RSVs settled in China UnionPay, Alipay, WeChat Pay or RMB in Hong Kong and Macau. A policy for sales contribution from mainland tourists also lower from 46.5% in FY 2019 to 36.9% in FY 2020.
As mainland visitation dropped considerably, especially in second half FY 2020. Retail network management in Hong Kong and Macau. A net of 4 points of sale were opened in FY 2020, including a net open of one Chow Tai Fook Jewellery point of sale and 3 points of sale for MONOLOGUE and SOINLOVE, our new brand. Going forward, improving store productivity and profitability and optimize store relay costs will be our top priority. We expect to consolidate 10 to 15 points of sale in FY 2021. At the same time, we shall continue to seek for a more meaningful cut in rental.
In other overseas market, a net of one point of sale was opened in FY 2020, including 6 Chow Tai Fook Jewellery net opening. Other market, RSV registered over 80% growth during the year. We shall continue to explore opportunity to open store in Southeast Asia. This is my sharing. I would like to pass it to Bobby Liu. He is responsible for development on customer and e-commerce. Thank you.
Thank you, Kent. Let's share our multi-brand strategy. We continue to diversify our product portfolio to better serve each unique consumer segment and create long-term differentiation and loyalty. In January 2020, we acquired ENZO, which enabled us to further venture into the color gemstone market to complement the group's multi-brand strategy. Jewelria. Jewelria is a designer's hub of international jewelry product offering. Annoushka and Kagayoi that have recently joined the Jewelria family and are two excellent example that demonstrate Jewelria's eclectic mix of Oriental design, Western style to international brand jewelry. Annoushka, a London-based jewelry house created by the renowned designer Annoushka Ducas, has been loved by members of the British royal family. Kagayoi, a heritage jewelry brand from Japan for over 150 years, brings forth the jewelry embodied with Kagayoi's unique eclectic sense.
As of March 2020, there were 59 Jewelria points of sale in mainland China, and we will continue to roll out Jewelria through both self-operated and franchisee points of sale in financial 2021. ENZO is a creative and contemporary color gem jewelry brand founded in 2004. It is renowned for its exceptional craftsmanship and jewelry creations about nature and emotions. Its average selling price range is around RMB 2,000- RMB 5,000, and targeting to introduce and educate our potential customer about the beauty of color stones. As at March 2020, ENZO has 59 points of sale in mainland China, primarily located in Tier 1 and Tier 2 cities. T MARK. As at March 31st, 2020, there were 865 counter in shop in mainland China and 64 counter in shop in Hong Kong, Macau, distributing T MARK diamond products.
In our FY 2020, T MARK RSV was down by 9.2% in Mainland China and 41% in Hong Kong, Macau, as affected by the pandemic and the sluggish business environment in Hong Kong. We have been expanded coverage of the T MARK diamond to some hit collection with strong storytelling element, such as Guardian of Life collections. In the coming year, T MARK diamonds will be extending to 8 points diamond and above with our patent inscription. Hearts On Fire is as of March 2020, there were 11 Hearts On Fire points of sale and 210 shop in shop or counter in shop in our group. The new heritage page for Hearts On Fire collection was unveiled in October last year. We will further enrich the product offering and launch regionally marketing campaigns to boost brand awareness in the second half of the FY 2021.
Another two are young brand, SOINLOVE and MONOLOGUE. We have been proactive in exploring innovative promotional channels and new product development to connect SOINLOVE and MONOLOGUE with younger customers. Riding on the sweeping trend to social media, we leverage the power of online marketing campaign to boost the sales of our new collections. Online sales accounted for around 60% of both SOINLOVE and MONOLOGUE RSV in Mainland China during the FY 2020, effectively tap this online generation. Meanwhile, physical store are essential to provide matching products and unique in-store experience to younger customers. In FY 2020, we have 17 SOINLOVE point of sale and 15 MONOLOGUE point of sale were opened, bringing the total numbers of point of sale to 44 and 53 as at March 31st, 2020 respectively.
Rollout of these two brands shall continue through both self-operated and franchised points of sale. In view of the changing environment, we have taken steps to integrate technologies into our store and create seamless shopping experience over the past few years. Cloud Kiosk is our proprietary innovation successfully empowered our customer with more flexibility in extracting their most comfortable shopping experience in our store and online channels by strategically linking e-commerce platform to selected physical locations. Omnichannel's retailing. Despite the epidemic has dramatically affected our store operations and customers' demand and lifestyle in the last couple of months, it was also a prime opportunity for us to demonstrate our commitment to embracing technologies. We launched CloudSales 365, which connecting our online e-shop, customer management, and back-end system.
Through this program, we build up a WeChat— through the WeChat web, our staff can engage and serve our customers best anytime and anywhere by simply accessing a mobile device. It can also effectively extend the reach of our social media marketing efforts. Live streaming events is another way we can to focus a connection with our customer. We used the connection focus also proved to be successfully in amplifying the sales of our online and CloudSales 365 in this period. The collaborative event with Austin Li Jiaqi, a top Chinese influencer, received an overwhelming response with around 5,000 pieces of products sold within 30 seconds for charity purpose. Our e-commerce business deliver a RSV growth of 3.4% in the FY 2020. It contributed to 5.2% of our RSV and 40.4% of our retail sales volume in Mainland China.
The FHP daily online traffic reached 739,000 unique visitors. The number of followers on our Sina Weibo and WeChat accounts increased to 10.6 million. The average selling price on our e-commerce increased to HKD 1,400 in FY 2020 versus HKD 1,300 a year ago. Here is an update on our customer relationship management. As of March 2020, we had approximately 2.5 million members in our membership program in Mainland China. The repeated purchase ratio was lifted to around 25% in FY 2020. In Hong Kong, Macau, the number of members reached 1.2 million, with a repeat purchase ratio increase to around 36%. Now, I will turn it over to Kent for the business strategies. Thank you.
Okay. Thank you, Bobby Liu. To conclude, FY 2020 was a challenging year, especially in fourth quarter FY 2020. The Hong Kong, Macau market will remain challenging in the foreseeable future. While in Mainland China, we have seen signs of recovery as business resume. We remained cautiously optimistic about the short-term business outlook, but stay optimistic about the mid to long-term prospect of the jewellery market in Mainland China. In Hong Kong and Macau, we shall continue to consolidate our retail networks, rationalize cost structure, and refine our business strategy. We shall also place an emphasis on transforming our current business model through innovation and technology to enhance retail experience, improve operational efficiency, and strengthen our market leader position. On the other hand, we shall continue our Mainland China expansion plan through franchise model as the situation stabilize.
Customer experience shall be further diversified and satisfied through our channel innovation and our multi-brand strategy. Going forward, we shall continue to implement our customer-centric strategy with the vision of achieving our four long-term goals. One, be the market leader through further market penetration. Second, develop a comprehensive jewellery ecosystem. Third, be a tech-empowered jewellery company through harnessing innovation and technology. Four, improve operational efficiency through digital transformation. Our task will center on improving business model agility and organizational structure through technology and employee empowerment, which allow us to respond rapidly to change, strengthen supply chain credibility through streamlining the processing, automation and data analytics, and enhance our competitive edge to achieve long-term sustainable growth. This concludes our presentation today. Thank you.
Thank you, Kent Wong, Hamilton Cheng, and Bobby Liu.