Investors, friends, good morning. Welcome to Li-Ning Company Limited's 2024 interim results announcement. Let me introduce to you our management: Executive Chairman and Joint CEO, Mr. Li Ning; Executive Director and Joint CEO, Mr. Qian Wei; and our company Vice President and CFO, Mr. Zhao Dongsheng. Today, Mr. Zhao will first present the 2024 financial review. After that, our chairman will talk about our strategic direction. Finally, Mr. Qian will go through our outlook and strategies, followed by Q&A. First of all, over to Mr. Zhao.
Good morning, everyone. I am Zhao Dongsheng. Now, I will review with you our company's financial situation in the first half of the year. In the first half, we focused on laying a solid foundation and pragmatic developments. We put stability first and achieved the following operating results.
In terms of financials, our revenue increased by 2.3%, reaching 14.345 billion RMB. Gross profit margin was up 1.6 percentage points to 50.4%. In uncertain market environment, we prudently controlled expenses and focused on investment and deployment to drive long-term business growth. Coupled with reduction of non-operating income, such as interest income, we finally achieved net profit of 1.952 billion RMB, and net profit margin is 13.6%. Overall funding situation is sufficient. Operating cash flow increased by 40.6% to 2.73 billion RMB. Average working capital to revenue ratio was 7.1%. Cash conversion cycle was 31 days, remaining healthy. The board of directors recommended interim dividend of HKD 0.3775 per share.
Dividend payout was further increased from 45% last year to 50% this time to ensure continued shareholder returns. In terms of operations, Li-Ning core brand retail sell-through recorded low single-digit decrease across all channels. Offline retail environment faced challenges, and during the period, offline new product retail sell-through recorded a mid, middle to low single-digit decrease, or a middle medium single-digit decrease. At the end of the period, omni-channel inventory tag amount increased by mid-single-digit year-on-year. Omni-channel inventory to sales ratio, 3.9, maintaining a healthy level. Revenue in the first half of the year was up 2.3% year-on-year, thanks to strategic focus on professional categories and footwear revenue accounted for 55%. We continue to maintain this proportion advantage. Under uncertain market environments, we adhere to channel strategy of balanced development.
Balanced proportion of wholesale and DTC helps us better balance the opportunities and risks between channels and finance, as well as operating funds and profit and loss. Overall, proportion of channel sales remain stable and healthy. Online business environment has improved, driving recovery of online customer flow and sales. Proportion of e-commerce revenue has increased by 3 percentage points to 30%. Direct sales revenue has remained at 25%. In order to ensure health of the channel, we proactively strengthen dealer delivery, rhythm management and proportion of wholesale revenue decreased by 3 points to 45%. Proportion of offline sales, new products within 6 months accounted for 87%, a healthy level. For channel development, there were a total of 7,677 POS in the first half, an increase of 229 compared with the same period last year.
Li-Ning brand POS increased by 72, Li-Ning Young, up 157. Li-Ning core brand actively optimized channel layout to consolidate and expand competitive advantage in high-level market. At the same time, we'll actively explore emerging markets to further enhance our brand image and market influence. During the period, affected by the volatile market environment, overall sales volume, overall retail sell-through fell low single-digit year-on-year, with e-commerce sales achieving mid-10%-20% growth. Offline sell-through decreased mid-single-digit year-on-year. Average offline ASP remains stable. Offline discount improved low single-digit, driving the average unit price to increase low single-digit. However, sales volume declined due to pressure of passenger flow by mid-single-digit.
Li-Ning brand wholesale business, excluding international market and Li-Ning Young business, saw a year-on-year decrease of 3% in revenue in the first half, while number of POS remained stable. During the period, we strictly controlled delivery pace of distributors after deducting revenue from professional channel shipment. Wholesale revenue fell by high single digit. Decline in wholesale flow rate was consistent with revenue, ensuring health of terminal channels. In the long term, we'll continue to empower distributors and improve efficiency of terminal retail operations to promote healthy development and sustainable growth of channels. Direct retail revenue was up 2% year-on-year. Number of POS increased by 72, mainly due to the addition of new stores in the second half of 2023. The number of stores decreased by 3 stores month-on-month or quarter-on-quarter.
As shown in the revenue change analysis chart, revenue growth was mainly contributed by the growth of new stores. When consumption environment is not as good as expected, we continue to strengthen our retail capabilities. At the same time, we close inefficient stores and strengthen renovation and expansion of high-quality stores to ensure improvement of efficiency of direct retail channels and promote steady growth of direct retail revenue. In the first half, gross profit margin increased by 1.6 percentage points to 50.4% in an environment of strong competition for the following reasons: One, optimization, optimization of e-commerce channel operating environment and sales efficiency led to improved discount and increased group's gross profit margin by 0.9 percentage point.... Two, optimizing sales efficiency through direct retail channels led to improved discounts, increasing group growth profit margin by 0.5 percentage point.
Increase in proportion of DTC has driven the group's GP margin to increase by 0.4 percentage point. Changes in product structure of other business units affected the group GP margin to decrease by 0.2 percentage point. Revenue growth, or in terms of expenses, we actively promote cost reduction and efficiency improvement through strategic expense investment and control, so as to further optimize resource utilization efficiency. Sales-related non-fixed expenses, such as direct retail store expenses, platform commission, logistics expenses, increased by RMB 205 million, mainly due to expansion of direct retail channels and consolidation of core business districts, which increased our expenses and recovery of e-commerce platform, commission increases. Advertising and marketing expenses increased by RMB 207 million, and expense rate increased by 13 percentage points year-on-year to 8.7%.
Increase in marketing expenses was mainly due to the increased investment in brand marketing under background of the sports year, as well as increase in promotion and sales promotion expenses driven by recovery of revenue. In order to consolidate and enhance core competitiveness of the brand, R&D and personnel expenses, asset depreciation increased, resulting in an increase of RMB 81 million in other platform expenses. Other income decreased by RMB 92,000, mainly due to decrease in investment and financial management income. Overall, group operating profit margin dropped one percentage point to 16.7% from 17.7% in the same period last year. Net profit margin dropped fifteen percentage points from 15.1% in the same period last year to 13.6%. Channel inventory.
In the first half, total inventory increased mid-single digit and was at a reasonable level. For all channels, inventory turnover months is 3.9. Inventory structure fluctuated slightly, but it is at healthy level. In the future, we'll continue to implement rigorous inventory management measures to ensure inventory turnover efficiency and inventory structure remain healthy. For our inventory, pre-provision inventory cost amount increased by 9% year-on-year in the first half. Comparing with revenue growth of 2.3%, the growth rate is controllable. The overall inventory is healthy. Of course, there are still some challenges. Our aging, inventory aging structure has improved. Overall speaking, our inventory is at healthy and controllable level. A healthy aging structure is an important foundation for supporting healthy and sustainable business growth.
We believe that through continuous improvement in product efficiency and operational efficiency, there is room for further improvement in the future. For trade receivables, relative to revenue growth of 2.3%, our pre-provision trade receivables decreased by 6%. Receivable turnover days, 15 days. Trade receivables are in reasonable, healthy level. As shown in the figure on the right, proportion of trade receivables within 90 days increased from 84% in the same period last year to 85%. Based on our past support for strategic partners and joint effort of both parties, we have optimized channel efficiency management with our partners. Overall operating situation has become healthier. In the future, we'll continue to maintain strategic support for our partners and promote win-win cooperation between both parties. In terms of working capital efficiency, our working capital remains at a healthy level.
Operating capital accounted for 7% of annual revenue, giving us sufficient resources to drive business growth. Our cash flow from operating activities was sufficient. It went up 40.6% to RMB 2.73 billion. Our net cash decreased by RMB 1.644 billion, compared with the same period last year, to RMB 17.581 billion. Abundant cash reserve enables us to better manage pressure and risk in the face of complex terminal environments, and also allow us to be in a better position to flexibly seize new business growth opportunities in the future. At present, China economy is showing an orderly recovery trend, but overall, consumer confidence still has room to recover. Challenge of weak consumer demand and expectations continues.
Entering the second half of the year, the consumption situation has not yet shown good flexibility, and the space for further improvement in discounts is narrowing, putting pressure on improvement of GP margin. Secondly, due to impact of timing, expenses in the second half of the year are usually higher than the first half, which makes our expectations for the second half of the year more cautious and pragmatic. Therefore, we adjusted our full-year revenue target, and we expect full-year revenue growth to slow down to low single digit. At the same time, we will conduct more rigorous expense planning and control to maintain full-year net profit margin at low double-digit level goal. Currently, we adhere to the direction of steady operation and pragmatic development, and strive to be fully prepared for long-term growth.
We are full of confidence in the future development of China's sports, footwear, and apparel industry, and the leading brand. So that's all for the financial performance. Now, I would invite our Chairman to introduce to you key strategic directions for the first half of the year. Thank you.
... Thank you, Dongsheng. Good morning. In the first half of 2024, the orderly recovery of the macroeconomy promoted recovery of consumer confidence. Driven by a number of sports events, national enthusiasm for sports has increased, and the demand for sports goods has been further released. Favorable national policies continue to support high-quality development of the sports industry. During the period, we took advantage of the policies and relied on the brand's professional sports genes to give full play to our insights in the sports industry, understanding of sports categories, and technological innovation and R&D capabilities. We focused on five core categories and promoted upgrade of product capabilities. We optimized consumer experience and further enhanced the value of leading style experience. The company will continue to focus on single brand, multi-categories, diversified channels as our strategy.
We will continue to strengthen our DNA in sportswear, and to clarify our positioning as a professional sports brand. Through multi-categories and diversified channels, we will provide professional and fashionable sportswear for our consumers in order to consolidate our competitiveness. In the first six months, we focused on running, gyms, badminton, basketball, and sports lifestyle. These are our five core categories. We will continue to focus on technological innovation, and also want to connect with the trends of doing sports, so that we can provide sportswear, which is both of tech elements and fashionable, and to consolidate our core competitiveness.
We will continue to focus on our professional category, and our general decrease in the first half year in all channels is around 1%, but for the jogging, we have an increase of 25%, in gyms, increase of 7%, laying a solid foundation for overall development. As for the increase and the proportion of basketball has dropped drastically. It is basically because the overall market of basketball has slowed down its growth, and we are determined to control the delivery of basketball goods and to reduce our inventory, so that we can optimize our overall depreciation and inventory level. In the same period of time, we will continue to deeply cultivate the professional running shoe matrix and expand market share in the running sector.
In the first half of this year, the three core products has a total sales of over 5 million pairs, providing a pillar to our overall development. In this year, we are also creating the Shadow 3 brand, which is both innovative and full of design elements, and we continue to provide excellent sports experience for our consumers. On one hand, we want to strengthen our products. On the other hand, we also want to increase our exposure in professional sports events, so that we can enhance our brand image. With the same period of time, our professional running shoes have signed different competing athletes, and we have won a total of 30 marathon and cross-country champions, and we are on the champion platform for a total of 56 times.
Speaking of basketball, we will continue on our direction of being balanced, and we want to focus on our starting point and activation point, so that we can continue to focus on our functional matrix and to consolidate our position in the market. Within the same period of time, Way of Wade 11 continued to increase its value. On one hand, we have increased our GCU Ground Control System and our carbon core technology. It is easy to adapt, so that at each and every single moment, the basketball player can seek a breakthrough. At the same period of time, Li-Ning also promote the basketball among youth. This July, we sponsor the China girls basketball team in the ISF World School Basketball Championship 2024, and they have won the first place.
We look forward to provide a multifaceted and professional platform for them to grow and to infuse energy into the youth basketball sector in China. In terms of fitness, we continue to expand our sports scenario with functional technology. We focus on permeability and flexibility, as well as protection function. We want to cover different types of clients and to cover their needs in different sports scenarios. We want to offer sports scenarios, goods, and to create multi-scenario fitness equipments, and to focus on the women's market, so that we can continue to improve our connections and communications with female consumers. Continue looking into the future, we will continue to take functional technology as our core and to provide fitness wear for different sports scenario.
As for sports casual, we will continue to look for a connection between their daily life and sportsmanship, so that we can present diversified and unique sports trendy product. In this period, we have focused on the SOFT series, which is a collection for a relaxing stroll, or because the general public have such needs to commute and to use sportswear in the casual daily life. The total sales in the first six months has gone beyond 1 million pairs. In order to continue to innovate for Li-Ning, we also launched the designer platform of Chuang, in order to put together all the creativity of Chinese all over the world. The first group of designers who work together include Ding Jie. They have a lot of experience in designing fashionable sportswear for different sports events.
Together with the designers, we will continue to cultivate Chinese culture and deepen our brand, Li-Ning, as an original brand. This year is a momentum event, sports event year. Therefore, we have launched another campaign called In My Name. We are providing multiple brand and multiple products for our athletes, and we also invite our athletes become KOL in order to tell their story, to present the technological capability of Li-Ning brand. We also have the thematic series products and thematic ambience creation in order to strengthen our professional image and to create our connection with our product, with the consumers, so that each and every one of them can become the lead actor in sports event.
In sports events like basketball, marathon, badminton and table tennis, we continue to deploy our efforts so that we will continue to invest in the sports sector. In this period of time, we have sponsor Hong Kong Open Badminton Championship in 2024-2026, encouraging the athletes to showcase their talents and to deepen our influence in the badminton sector. In order to deepen the consumers' understanding about our product, we have provided for a technological show, concentrating the display of different innovative products. And it is a fun, immersive experience conference focusing on six different technology. And we also launched three innovative accomplishments for the first time. Through our continued efforts in technological innovation and product, we will continue to consolidate our position as the market first, and to strengthen our core competitiveness.
That's all about our strategic direction, and I would like to invite Qian Wei, our CEO, to talk about our operational progress. Thank you. Good morning. I'm Qian Wei. Coming next, I will talk about the first half of 2024 and to report to you about our operational progress. In the first half of 2024, we focused on stable business performance, and our revenue and profits in line with expectations. In light of the instability of the market, our year-on-year increase is 2.3%, up to RMB 143.5 million. Basically, it is up to our expectations, and our gross profit increased 1.6% to 50.4%.
Although offline sales is under pressure, but through improving our efficiency, we have improved our 3-month discount rate up to 20% off, which is a much better year-on-year. Although our professional matrix is not up to standard, but in the first six months, our new product have been sold for up to 60%-80%. We will continue to focus on our professional product matrix, as well as expanding our new scenario and new market. In the first six months, we have maintained our income in shoe wear at 55%, while the overall sales of professional products has increased up to 60%. The core products, the total sales have been more than 5 million pairs.
As for 7 Pro, in the first half, we have more than 1.9 million sales, and we have a great increase year-on-year. As for the soft series, we have sales more than 1 million, a year-on-year increase by four times. In order to better serve different tiers market, we want to expand our products to product spend to 20-30, that is in the mid-spend, while the depth will increase by 10%-20% in the top tier. And through practical inventory management, we will continue to maintain a good level of inventory, and the all channel inventory sales is 3.9 months, which is healthy and controllable. And the inventory cost is up to CNY 2.46 billion, and year-on-year increase a high unit figure, and it is up to our expectation.
Our structure maintains healthy, and in six months, the new product inventory year-on-year increased 5%, and the old inventory structure continued to be optimized. This has always been our focus businesses. In the second half of the year, we will continue to focus on the prudence of our channel inventory. In the first half of the year, offline sales are under great challenge, and because of extreme weather and our customer flow continued to decrease, and we are having a decrease year-on-year in the mid-single digit. Overall, offline retail sales also decreased in the mid-single digit.
In order to adapt to the ever-changing market, we would use week as our basic unit and to adjust our sales, as well as our product sales, so that we can optimize our structure and to make sure that our depreciation rate will continue to be stabilized in order to reduce the operation pressure caused by the decrease of consumer flow. In the first half of the year, we will continue to optimize the deployment of our channels and to maintain our core store income at 90%, and so that our core competitiveness can be maintained. We also want to focus on the top-tier market stores and to adjust the store that is not up to our standard or strategies. The new shops has changed from 75 to 74, and we have closed 74 stores.
In order to increase the speed of the emerging market channel, in the first half of the year, we have new boutiques of up to 100, and we have revamped 80, and we have closed 80 low-efficiency stores. We also improved our speed in upgrading our image, and as we have, compared to 2023, we have an increase of 96%, and, in every month, we have a efficiency of $4.5 million each boutique. In the first half of the year, the e-commerce operation environment continued to improve. Through online and offline product, through channels, and through direct sales, we have achieved an increase of 10%-20%. We will continue to improve our e-commerce efficiency and to deepen our sales deployment.
And we also want to improve our investments in different e-commerce platform in order to cope with the future changes, so that we can reach our target of 10%-20% increase in customers and to improve our depreciation rate year-on-year and a low single digit. Focusing on the demand of different channels, we want to increase our accuracy in the discrepancy of product combination, so that we see the improve of inventory circulation year-on-year.
Speaking of childwear, we will continue to improve our professional products and to integrate different sales channels, and to upgrade our secondary school and primary school basketball sponsorship, and focus on soccer event resources, so that we can have all channel retail of increase at mid-single digit, while retail deficiency can be improved to low single digit, and to increase the unit price to mid-single digit, and to increase the gross profit of Li-Ning. As for the end of this period of time, childrenwear have up to 1,438 stores, and for each stores, we have an efficiency of 130,000 users. This is the business progress of our first half.
In the second half, we will continue to be prudent and develop our businesses, and we will continue to deepen our efforts and to optimize our structure in order to achieve a long-term sustainable growth.