Good morning, ladies and gentlemen. On behalf of Comba Telecom Systems Holdings Limited, I would like to welcome all of you joining the 2020 Interim Results Investor Presentation Web Conference. In today's meeting, there will be a presentation followed by a Q&A section. In the Q&A section, if anyone wishes to ask questions, please click on the raise hand button located at the bottom of the screen. Today, we have four senior management joining us today from Hong Kong and Guangzhou. From Hong Kong side, may I introduce the Chairman, Mr. Fok Tung Ling.
Yeah.
The Executive Director and Group Chief Financial Officer, Mr. Ken Chang. The Executive Director and Senior Vice President of the group, Ms. Huo Xinru. From Guangzhou, may I introduce the Executive Director and President of the group, Mr. Xu Huijun. [Non-English content] Now, may I invite Mr. Ken Chang, Executive Director and Group Chief Financial Officer, to present the 2020 interim financial highlights. Mr. Chang, please.
Good morning, everyone. I am here to introduce our financial results for the first half of this year. In the first half, we have the COVID pandemic that affected a lot of industries, including our telecom industry. The 5G target is still on track. We have seen that the pandemic has affected the progress somehow. The revenue for us in the first half is HKD 2.2 billion, which is about 18.6% down year-over-year. The gross profit margin is 32.5%, is 0.8 percentage point up. It is because of two reasons. First is we have been introducing new products. Second is we have been optimizing the operation, that results in a higher margin. The net profit to the shareholders is HKD 53 million, which is 35.4% down. Net profit margin 2.4%. Basic earnings per share is HKD 0.0209 per share.
We are paying dividend, HKD 0.007 per share, which result a dividend payout ratio of 33.5%. Let me talk about our OPEX, our operating cost structure. Most of the cost structure have decreased. For example, our finance cost, admin expenses, selling expenses. Finance costs decreased by HKD 12.3 million, down by 23%, because of two reasons. First of all, our net debt have decreased, resulting our gearing ratio dramatically decreased from 15.7% to 13.5%. Over the last six months, the interest, measured by HIBOR or LIBOR, have in general decreased. That result in the decrease in the interest expenses. Second of all, the admin expenses decreased by HKD 46 million, down by 16.5%. Selling expenses decreased by a larger degree, by HKD 85 million, down by 30.6%. R&D maintained similar level at 7.8%. There are two expenses that have increased year-over-year.
First of all is the income tax, increased by HKD 14.6 million because of two reasons. First of all, at the end of last year, we have restructured certain businesses. We have aligned certain businesses in different group, and that result in a one-off restructuring tax-related expenses around HKD 10.9 million. We believe the long-term benefit for the restructuring is definitely can offset the short-term shortcoming for the tax expenses. Second of all, the deferred tax asset have decreased, resulting a tax expenses of HKD 9.9 million. If we take out these two non-recurring costs, in fact, our tax income should have come down year on year. Other expenses increased by HKD 45 million because of two major factor. First of all, our AR provision have increased by HKD 31 million because of more rigorous analysis on the AR side.
Second of all, the ETL, our operator, the third largest operator in Laos that we own 51%, the new fixed asset has started to depreciate at the beginning of the year. After taking the 51% stake, the effect our bottom line is around HKD 14.7 million. On the balance sheet side, let me make also the highlight here. At the end of April, we have conducted the equity issuance and raised HKD 680 million. As a result of that, also we have seen the net cash have dramatically improved. Net asset is standing at HKD 4.1 billion, up by 20.3%. NAV per share is HKD 1.49 per share, up by 8.8%. Let me go over the operating matrix. First of all, let us look at the turnover day.
Although we see the turnover day in inventory, AR and AP have increased by 30 days, 35 days, and 51 days respectively. This is mainly due to the fact that the revenue has declined by 18.6%. The denominator has decreased and because of that effect. Inventory. If we look at inventory particularly, inventory has increased by HKD 169 million. This mainly due to the fact that we have been busy preparing the 5G antenna, which we will ship in the second half of the year. We believe that the temporary increase is more like a one-off event. For AR turnover day, it has increased in the number of days. If we look at the AR absolute amount, the AR actually has decreased by HKD 150 million. AP turnover day although has increased by 51 days.
We look at the absolute amount on the payable, trade payable decreased by HKD 264 million. Other payable decreased by around HKD 400 million. Altogether, more than HKD 500 million of the payable amount has decreased. Cash conversion cycle, we still maintain at the low number. Gross gearing ratio standing at 15.5%, is a 3.1 percentage point improvement. Debt to asset ratio is 57.9%, is 8% point down. ROE 4.5%, dividend payout ratio 33.5%. Now at our gearing ratio measured by the interest-bearing debt divided by total asset, standing at 13.5%. We look at the peak, it's around 2018. The peak standing at 18.9%. From there it's about 5.4% down. Now our gearing ratio is back to the level what we have seen in 2016. We believe it's a pretty healthy sign. Let us look at the breakdown of our revenue.
Let's look at the revenue breakdown by customer. Because of the pandemic, what we have seen is we have a slower progress in the network deployment. We are also in a transition period from 4G into 5G. What we are seeing is, although on the mainland operator side, we have a decrease in the three operators. We have seen China Tower particularly now representing our fourth largest customer in mainland. Now representing 7.7% of total revenue, up by 63.4% year-on-year because of the indoor network and the last mile network solution demand have increased. International customer have increased by 4.9% year-on-year. The market have done particularly well. For example, our Asia Pacific, Europe, Middle East, our European market have increased by 10% year-on-year. Indian market has increased by nearly three-folds.
We are making progress in the OEM customers as well. I think we have a pretty good growth profile from second half and onward for international market. For the other businesses, mainly has been dragged down by the railway transit revenue, which represent about 3.5%, and down around 18% year-on-year. Because of the pandemic that slowed down the orders. Looking at our revenue by businesses. The antenna business down by 45%. Besides the antenna business, network system services and others have increased by 7.8%, 11.6%, and 30.8% respectively. The down in the antenna business is mainly due to the fact that, I previously mentioned we are in a transition from 4G into 5G. The first half of the 5G deployment, especially out of procurement, has been slower than expected somewhat. However, we are excited from the second half onward.
Particularly the 700 MHz and the 2.1 GHz network will demand more of this type of antenna. We are in a great position for the shipment for that from second half and onward. We believe that we will have a recovery in the second half. Network system up by 7.8%. This is due to continuous recurring demand from the indoor and last mile solution. Services, similar reason. Also because the indoor and last mile services demand and also our enhanced and improved operation efficiency. Other businesses are also worth mentioning.
The wireless transmission currently account for 5.3% of revenue, up by almost 250% year-on-year. Obviously, because of the pandemic, the result is slower than expected. We lose roughly about one to one and a half months of revenue. However, we are confident we are in a great position for catch up. First of all, as mentioned, I think we are in much greater shape in liquidity, in the net cash position. We have stronger financial profile. Second of all, over the last few years, we have been rigorously invested in R&D capacity and operation enhancement. We believe we are in a much stronger position to capture the 5G opportunities and beyond. With that, I will end here. Our President, Mr. Xu Huijun will illustrate our business and strategy side. Thank you.
Thank you, Mr. Chang. May I now invite Mr. Xu Huijun, Executive Director and President of the Group, to present industry development and company outlook. [Non-English content ]
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[Non-English content] Thank you Mr. Xu.