Graphex Group Ltd 6-K, filed Sep 26, 2024

About this 6-K

Graphex Group Ltd (GRFXY)

6-K 2024-09-26 For: 2024-09-26

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Added on April 06, 2026

Six months ended 30 June

No. of new contracts

Contract sum

(HK$’million)

Graphex Group Ltd filed this 6-K on September 26, 2024.

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Item		Page

Other Information		1

Signatures		2

Exhibit Index		3

	GRAPHEX GROUP LIMTED

	By:	/s/ Andross Chan
		Andross Chan
		Chief Executive Officer

Exhibit No.		Exhibit

99.1*		The Company’s 2024 Interim Report *

2	Financial Highlights	2
3	Corporate Information	3
4	Unaudited Interim Condensed Consolidated Statement of Profit or Loss	4
5	Unaudited Interim Condensed Consolidated Statement of Comprehensive Income	5
6	Unaudited Interim Condensed Consolidated Statement of Financial Position	6
8	Unaudited Interim Condensed Consolidated Statement of Changes in Equity	8
10	Unaudited Interim Condensed Consolidated Statement of Cash Flows	10
12	Notes to Unaudited Interim Condensed Consolidated Financial Statements	12
37	Management Discussion and Analysis	37
46	Other Information	46

	For the six months ended 30 June
	2024			2023
Results	HK$’000			HK$’000			Change
Revenue		93,742			151,274			(38.0	)%
Graphene products		61,489			97,103			(36.7	)%
Landscape architecture		32,253			54,171			(40.5	)%
Catering		–			–			–
		4,682			19,269			(75.7	)%
Adjusted segment EBITDA*
Graphene products		7,374			16,012			(53.9	)%
Landscape architecture		(2,692	)		1,512			(278.0	)%
Catering		–			1,745			(100.0	)%

Loss before tax		(57,303	)		(46,780	)		22.5	%
Loss attributable to owners of the parent		(54,096	)		(43,968	)		23.0	%

		HK cents			HK cents

Basic loss per share attributable to ordinary equity holders of the parent		(6.00	)		(6.06	)		(1.0	)%

	At 30 June		At 31 December
	2024		2023
Results	HK$’000		HK$’000		Change
Total assets		839,316		847,343		(0.9	)%
Net assets		329,247		369,638		(10.9	)%
Shareholder’s equity		329,246		369,687		(10.9	)%
Cash and bank balances		10,391		27,190		(61.8	)%
Debt		234,206		233,165		0.4	%

BOARD OF DIRECTORS		CORPORATE WEBSITE

Executive Directors		www.graphexgroup.com

Mr. Lau Hing Tat Patrick		AUTHORISED REPRESENTATIVES
Mr. Chan Yick Yan Andross
Mr. Qiu Bin		Mr. Kwok Ka Hei
		Mr. Chan Yick Yan Andross
Non-executive Director
		ALTERNATES TO AUTHORISED REPRESENTATIVES
Mr. Ma Lida
		Mr. Lau Hing Tat Patrick
Independent non-executive Directors
		PRINCIPAL BANKERS
Ms. Tam Ip Fong Sin
Mr. Wang Yuncai		Bank of China (Hong Kong)
Mr. Liu Kwong Sang		Bank of Communications
Mr. Tang Zhaodong		The Bank of East Asia
		The Hongkong and Shanghai Banking
COMPANY SECRETARY
		PRINCIPAL SHARE REGISTRAR OFFICE
Mr. Kwok Ka Hei
		Ocorian Trust (Cayman) Limited
REGISTERED OFFICE		Windward 3
		Regatta Office Park
Windward 3		P.O. Box 1350
Regatta Office Park		Grand Cayman KY1-1108
P.O. Box 1350		Cayman Islands
Grand Cayman KY1-1108
Cayman Islands		HONG KONG SHARE REGISTRAR

HEADQUARTER, HEAD OFFICE AND		Tricor Investor Services Limited
PRINCIPAL PLACE OF BUSINESS		17/F, Far East Finance Centre
IN HONG KONG		16 Harcourt Road
		Hong Kong
11/F COFCO Tower
262 Gloucester Road		ADR DEPOSITARY
Causeway Bay
Hong Kong		Bank of New York Mellon

AUDIT COMMITTEE		INVESTOR RELATIONS

Mr. Liu Kwong Sang (Chairman)		Email: investrel@graphexgroup.com
Ms. Tam Ip Fong Sin
Mr. Wang Yuncai		LEGAL ADVISER AS TO HONG KONG LAW

REMUNERATION COMMITTEE		Tso Au Yim & Yeung

Ms. Tam Ip Fong Sin (Chairlady)		AUDITOR
Mr. Wang Yuncai
		Crowe (HK) CPA Limited
NOMINATION COMMITTEE

Ms. Tam Ip Fong Sin (Chairlady)
Mr. Wang Yuncai

		For the six months ended 30 June
		2024			2023
	Notes	(Unaudited) HK$’000			(Unaudited) HK$’000
REVENUE	3		93,742			151,274
Cost of sales	7		(63,375	)		(101,242	)
GROSS PROFIT			30,367			50,032
Other income and gains	5		6,934			6,553
Selling and marketing expenses			(1,230	)		(2,956	)
Administrative expenses			(75,030	)		(76,724	)
Impairment losses on financial and contract assets, net			(6,704	)		(10,705	)
Impairment losses on property, plant and equipment and other intangible asset, net			(1,859	)		–
Fair value loss on financial assets at fair value through profit or loss			(3	)		(6	)
Finance costs	6		(8,978	)		(12,744	)
Share of losses of associates			(800	)		(230	)
LOSS BEFORE TAX	7		(57,303	)		(46,780	)
Income tax credit	8		3,257			5,005
LOSS FOR THE PERIOD			(54,046	)		(41,775	)
Attributable to:
Owners of the parent			(54,096	)		(43,968	)
Non-controlling interests			50			2,193
			(54,046	)		(41,775	)
LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
Basic
– For loss for the period	10		HK(6.00) cents			HK(6.06) cents
Diluted
– For loss for the period			HK(6.00) cents			HK(6.06) cents

		30 June			31 December
		2024			2023
		(Unaudited)			(Audited)
	Notes	HK$’000			HK$’000
NON-CURRENT ASSETS
Property, plant and equipment			23,863			28,676
Goodwill			101,939			101,939
Other intangible assets			435,823			460,997
Investments in associates			–			801
Equity investments designated at fair value through other comprehensive income			34			34
Prepayments, deposits and other receivables			5,122			5,157
Deferred tax assets			3,225			3,240
Total non-current assets			570,006			600,844
CURRENT ASSETS
Inventories			16,451			13,712
Trade and bills receivables	11		157,478			147,991
Prepayments, deposits and other receivables			61,685			27,677
Financial assets at fair value through profit or loss			19			23
Contract assets			23,241			29,906
Restricted bank deposit			45			–
Cash and cash equivalents			10,391			27,190
Total current assets			269,310			246,499
CURRENT LIABILITIES
Trade payables	12		39,149			23,190
Other payables and accruals			98,259			80,547
Contract liabilities			40,248			38,627
Lease liabilities			3,429			4,682
Interest-bearing borrowings	13		150,099			135,882
Convertible notes	15		3,798			4,158
Tax payable			32,847			33,082
Total current liabilities			367,829			320,168
NET CURRENT LIABILITIES			(98,519	)		(73,669	)
TOTAL ASSETS LESS CURRENT LIABILITIES			471,487			527,175

	(i)	The Group has obtained a short-term loan facility of HK$20,000,000 for financing its working capital;

	(ii)	The Group has taken various cost control measures to tighten the costs of operations;

	(iii)	The Group is in serious discussions with potential investors for raising new capital by way of issuing new equity and/or debt securities; and

	(iv)	Graphex (Shandong) New Energy Technologies Limited (the “Graphex Shandong”), being an indirect whollyowned subsidiary of the Company established for the purpose of operating a project in Nanshu Town has on 26 October 2023 received a letter of intent (“LOI”) issued by one of the four major banks of the PRC (the “Bank”) to Graphex Shandong, whereby the Bank has indicated an intention of providing banking facilities of RMB400 million for the project (the “Proposed Loan”). The LOI is non-legally binding and the granting of the Proposed Loan is subject to, amongst other things, the Bank’s further evaluation on the Proposed Loan, finalisation of the terms and conditions of the Proposed Loan and compliance with the relevant banking and other laws and regulations of the PRC.

Amendments to IAS 7 and IFRS 7		Supplier Finance Arrangements
Amendments to IFRS 16		Lease Liability in a Sale and Leaseback
Amendments to IAS 1		Classification of Liabilities as Current or Non-current Liabilities
Amendments to IAS 1		Non-current Liabilities with Covenants

	(a)	Processing and sale of graphite and graphene related products (“Graphene Products Segment”);

	(b)	Providing landscape architecture design (“Landscape Architecture Design Segment”); and

	(c)	The catering business focuses on operation of restaurants (“Catering Segment”).

	Graphene products			Landscape architecture design			Catering (note (iii))		Total
	HK$’000			HK$’000			HK$’000		HK$’000
Segment revenue (note 3)
Sales to external customers		61,489			32,253			–		93,742
Elimination of inter-segment sales		–			–			–		–
Segment results		(15,830	)		(13,058	)		–		(28,888	)
Reconciliations:
Unallocated income and gains										1,005
Unallocated expenses										(19,997	)
Unallocated finance costs										(8,216	)
Unallocated depreciation and amortisation										(407	)
Share of losses of associates										(800	)
Loss before tax										(57,303	)
Adjusted segment EBITDA (note (i))		7,374			(2,692	)		–		4,682

	Graphene products			Landscape architecture design			Catering (note (iii))		Total
	HK$’000			HK$’000			HK$’000		HK$’000
Segment revenue (note 3)
Sales to external customers		97,103			54,171			–		151,274
Elimination of inter-segment sales		–			–			–		–
Segment results		(7,790	)		(13,013	)		1,680		(19,123	)
Reconciliations:
Unallocated income and gains										1,316
Unallocated expenses										(16,479	)
Unallocated finance costs										(11,858	)
Unallocated depreciation and amortisation										(406	)
Share of losses of associates										(230	)
Loss before tax										(46,780	)
Adjusted segment EBITDA (note (i))		16,012			1,512			1,745		19,269

			Landscape
	Graphene products		architecture design		Catering (note (iii))		Total
	HK$’000		HK$’000		HK$’000		HK$’000
Segment assets		744,222		87,663		–		831,885
Reconciliations:
Elimination of intersegment receivables								(15,641	)
Unallocated assets								31,099
Total assets								847,343
Segment liabilities		72,988		71,405		–		144,393
Reconciliations:
Elimination of intersegment payables								(15,641	)
Unallocated liabilities								348,953
Total liabilities								477,705

			Landscape
	Graphene products		architecture design		Catering (note (iii))		Total
	HK$’000		HK$’000		HK$’000		HK$’000
Other segment information
Share of losses of associates unallocated								230
Impairment losses recognised in the statement of profit or loss
– Financial and contract assets		–		10,705		–		10,705
Reconciliation:
Unallocated								–
Total								10,705
Depreciation and amortisation		23,307		3,412		61		26,780
Reconciliation:
Unallocated								407
Total								27,187
Income and gains allocated		2		3,185		2,050		5,237
Finance costs allocated		495		388		3		886
Investment in an associate unallocated								–
Capital expenditure (note (ii))		451		456		–		907
Reconciliation:
Unallocated								–
Total								907

	30 June 2024 (Unaudited)			30 June 2023 (Unaudited)
	HK$’000			HK$’000
Loss before tax		(57,303	)		(46,780	)
Add:
Finance costs		8,978			12,744
Amortisation and depreciation
– property, plant and equipment		548			1,623
– right-of-use assets		2,390			2,890
– other intangible assets		21,888			22,674

EBITDA		(23,499	)		(6,849	)

Impairment of property, plant and equipment, net		1,740			–
Impairment of other intangible assets, net		119			–
Impairment loss of trade receivables, net		3,387			3,330
Impairment loss of contract assets, net		4,261			7,375
Impairment loss of other receivables, net		(944	)		–
Fair value changes on financial assets at fair value through profit or loss		3			6
(Gain)/loss on disposal of items of property, plant and equipment		(177	)		106
Share of losses of associates		800			230
Corporate expenses
– Directors and corporate staff salaries		9,289			8,108
– Auditor’s remuneration		620			726
– Legal and professional expenses		6,794			3,883
– Publicity expenses		632			907
– Bank charges		689			826
– Others		1,973			2,029
		19,997			16,479
Unallocated income and gains
– Dividend income from equity investments at fair value through other comprehensive income		(65	)		(92	)
– Interest income		(329	)		(126	)
– Gain on settlement of other payables upon issue of ordinary shares		(560	)		–
– Waiver of interest		–			(1,160	)
– Others		(51	)		(30	)
		(1,005	)		(1,408	)
Adjusted segment EBITDA		4,682			19,269

	For the six months ended 30 June
	2024		2023
	(Unaudited)		(Unaudited)
	HK$’000		HK$’000
Other income
Service income		4,969		1,659
Dividend income from equity instruments at fair value through other comprehensive income		65		92
Interest income		786		582
Waiver of interest on convertible notes		–		1,160
Compensation from a supplier		–		1,041
Government grants (note)		291		914
		6,111		5,448
Gains
Gain on lease termination		–		2
Gain on settlement of other payables upon issue of ordinary shares		560		–
Gain on disposal of items of property, plant and equipment		177		–
Exchange difference, net		1		44
Others		85		1,059
		823		1,105
		6,934		6,553

	Number of shares
	For the six months ended 30 June
	2024		2023
	(Unaudited)		(Unaudited)

Shares
Weighted average number of ordinary shares in issue during the period used in the basic loss per share calculation		901,508,416		725,781,129

	HK$6% Corporate Bonds due 2021			HK$6% Corporate Bonds due 2021 and 2022			HK$6% Corporate Bonds due 2021 and 2022			HK$6% Corporate Bonds due 2023			HK$6% Corporate Bonds due 2025			Total
	HK$’000			HK$’000			HK$’000			HK$’000			HK$’000			HK$’000
	(note (c))			(note (d))			(note (d))			(note (e))
Carrying amount as at 1 January 2023		22,955			28,693			53,224			7,995			2,500			115,367
Interest charged		–			–			–			13			3,025			3,038
Interest paid and interest
payable included in other
payables and accruals		–			–			–			(8	)		(3,025	)		(3,033	)
Due date extension		(10,469	)		(19,387	)		(48,184	)		(8,000	)		86,040			–
Carrying amount as at 31 December 2023		12,486			9,306			5,040						88.540			115,372
Carrying amount as at 1 January 2024		12,486			9,306			5,040			–			88.540			115,372
Interest charged		–			–			–			–			2,649			2,649
Interest paid and interest
payable included in other
payables and accruals		–			–			–			–			(2,649	)		(2,649	)
Carrying amount as at 30 June 2024		12,486			9,306			5,040			–			88,540			115,372

	Note:	On 7 August 2019, the Group issued a 4-year unsecured promissory note with principal amount of HK$348,080,000 at 2% coupon rate, as part of the consideration for the acquisition of the entire issued share capital of Think High Global Limited. The effective interest rate was 8.4% at the date of issue. The fair value of the promissory note at acquisition date was estimated to be HK$274,552,000. The promissory note is carried at amortised cost.

		On 9 December 2021, the Group and the promissory note holder, which is an independent third party and not a substantial shareholder of the Company, entered into an agreement to extend the maturity date from 6 August 2023 to 6 August 2026. A gain on extension of promissory note of approximately HK$51,435,000 was recognised in profit or loss for the year ended 31 December 2021. The fair value of the promissory note of HK$263,740,000 at the date of extension was determined by the directors of the Company based on the valuation prepared by a professional qualified valuer independent to the Group, CHFT Advisory and Appraisal Ltd. The effective interest rate is 8.5% per annum.

		On 25 March 2022, the Company issued 323,657,534 preference shares of HK$0.01 each, with a fair value of HK$178,427,000, as consideration for full settlement of promissory note to the holder of the promissory note with a carrying amount at HK$182,100,000, resulting in a gain on derecognition of promissory note of approximately HK$3,673,000 which was credited to the consolidated profit or loss for the year ended 31 December 2022.

		On 11 December 2023, the Company issued 100,000,000 ordinary shares, at closing market price of HK$0.39 per ordinary share, with a fair value of HK$39,000,000, to the holder of the promissory note as consideration for full settlement of promissory note with a carrying amount at HK$34,481,000, resulting in a loss on derecognition of promissory note of approximately HK$4,519,000 which was recognised in the consolidated profit or loss for the year ended 31 December 2023. As at 30 June 2024, the holder of the promissory note held 100,000,000 ordinary shares of the Company, representing approximately 10.3% of the issued share capital of the Company.

	Equity component
	Liability component			Conversion rights			Warrant reserve		Total
	HK$’000			HK$’000			HK$’000		HK$’000
As at 1 January 2023		52,983			13,006			19,943		85,932
Effective interest for the year		3,057			–			–		3,057
Conversion to ordinary shares		(51,882	)		(12,123	)		–		(64,005	)
As at 31 December 2023		4,158			883			19,943		24,984
Effective interest for the year		28			–			–		28
Conversion to ordinary shares		(388	)		(56	)		–		(444	)
As at 30 June 2024		3,798			827			19,943		24,568
Current portion of convertible notes		(3,798	)
Non-current portion of convertible notes		–

	Number of issued and fully paid		Nominal value of shares		Share premium account
	shares		HK$’000		HK$’000
As at 31 December 2023 and 1 January 2024		897,974,788		8,980		607,247
Issue of ordinary shares upon conversion of convertible notes (note (a))		596,153		6		438
Shares granted under share award scheme (note (b))		26,476,438		264		11,783
Issue of new ordinary shares (note (c))		46,089,383		461		4,870
As at 30 June 2024		971,136,762		9,711		624,338

	As at 30 June 2024			As at 31 December 2023
	HK$’000			HK$’000
Current assets		269,310			246,499
Current liabilities		367,829			320,168
Current ratio		0.73	x		0.77	x

	As at 30 June 2024		As at 31 December 2023
	HK$’000		HK$’000
Contracted, but not provided for:
Acquisition of property, plant and equipment		5,719		5,760

Date of agreement:		1 December 2021

Borrower:		Earthasia Worldwide Holdings Limited

Revolving facility amount:		Up to HK$50,000,000

Interest rate per annum:		12%

Availability period:		1 January 2022 to 31 December 2024

Repayment term:		One year

Repayment:		Borrower shall repay the interests with the principal amount at loan maturity.

Early repayment:		The Borrower may prepay all or any part of a drawdown prior to the maturity date without penalty. Any prepayment of a drawdown will refresh the available amount of the Revolving Loan Facility for drawing. Any early repayment shall first settle all interests accrued.

Collateral:		Nil

Other terms and conditions:		The Lender shall have absolute discretion as to whether to make available any sum for any drawdown under the loan agreement.

	30 June 2024
	HK$’000
Cash and cash equivalents		260
Other current assets		8,482
Current assets		8,742
Non-current assets		—
Current liabilities		57,857
Non-current liabilities		1,134
Net assets/(deficiency in assets)		(50,249	)
Reconciliation to the Group’s interests in the joint venture:
Proportion of the Group’s ownership		30	%
Carrying amount of the investment		—
Revenue		19,661
Interest expense		(2,045	)
Profit for the period		(1,971	)
Profit and total comprehensive income for the period		(1,971	)

		Number of Shares								Number of underlying Shares held under the Share				Approximate % of
Name of Director	Capacity	Personal interest		Family interest		Corporate interest		Other interest		Option Scheme		Total		shareholding

Chan Yick Yan Andross	Beneficial owner, interest of controlled corporation		4,214,000		—		93,716,887		—		—		97,930,887		10.08	%
Lau Hing Tat Patrick	Beneficial owner, interest of spouse, interest of controlled corporation		9,212,000		—		46,003,444		—		—		55,215,444		5.69	%

Name of director	Name of associated corporation	Nature of interest	Number of shares and class of shares held	Approximate % of shareholding

Chan Yick Yan Andross	Earthasia (International) Limited	Beneficial owner	50 (ordinary shares)	0.98%

Lau Hing Tat Patrick	Earthasia (International) Limited	Beneficial owner	50 (ordinary shares)	0.98%

Long position in the shares Name of shareholder	Capacity/nature of interest	Number of Shares		Approximate % of shareholding
The Bank of New York Mellon Corporation	Interest of controlled corporation		266,834,348		27.48	%
The Bank of New York Mellon	Beneficial owner		266,834,348		27.48	%
CYY Holdings Limited1	Beneficial owner		93,716,887		9.65	%
PBLA Limited2	Beneficial owner		75,123,669		7.74	%
Pubang Landscape Architecture (HK) Company Limited2	Interest of controlled corporation		75,123,669		7.74	%
Pubang Landscape Architecture Company Limited2	Interest of controlled corporation		75,123,669		7.74	%

Short position in the shares Name of shareholder	Capacity/nature of interest	Number of Shares		Approximate % of shareholding

The Bank of New York Mellon Corporation	Interest of controlled corporation		259,626,720		26.73	%

The Bank of New York Mellon	Beneficial owner		259,626,720		26.73	%

1.	Purposes	(i) to attract talents, suitable personnel and entities that are eligible participants;

		(ii) to award certain selected participants with awarded shares for accepting their appointments, employments or engagement by the Group and related entities; (iii) to recognize the contributions by certain selected participants and to provide them with incentives in order to retain them for the continual operation, development and growth of the Group and related entities; and (iv) to improve or create sense of connection and/or loyalty of certain selected participants to the Group and related entities

2.	Qualifying participants	(i) Any director and employee of the Group or its subsidiaries; (ii) Any director and employee of the related entities of the Group; and (iii) Any person who provided services to the Group on a continuing or recurring basis

3.	Maximum number of shares	Not exceeding 10% of the shares of the Company in issue as at the date of adoption of the 2023 Share Award Scheme (i.e. 68,349,307 shares)

4.	Maximum entitlement of each participant	Not exceed 1% of the issued share capital of the Company from time to time

5.	Vesting period	Subject to the terms and condition of the 2023 Share Award Scheme and the fulfillment of all vesting conditions to the vesting of the awarded Shares on such selected employee as specified in the grant notice and in accordance with the vesting schedule (if any) as set out therein

6.	The amount payable on acceptance of the award	Nil

7.	The remaining life of the scheme	It shall be valid and effect for a period of 10 years commencing on 6 February 2023

1.	Purposes	to recognise the contributions made or to be made by certain participants and to provide them with incentives in order to retain them for the continual operation and development of EIL Group and to attract suitable personnel for further development of the EIL Group

2.	Qualifying participants	(i) any individual being an employee (including without limitation any director) of any member of the EIL Group; (ii) any agent or consultant to the EIL Group; and (iii) any business or joint venture partner, contractor, any party providing advisory, consultancy, professional services to the EIL Group, or any other persons who have contributed or may contribute to the operation and development of the EIL Group

3.	Maximum number of shares	Not exceeding 10% of the shares of EIL (“EIL Shares”) in issue as at the date of adoption of the EIL Share Award Scheme (i.e. 500 EIL Shares)

4.	Maximum entitlement of each participant	Not exceed 1% of the issued share capital of EIL from time to time

5.	Vesting period	Subject to the terms and conditions of the EIL Share Award Scheme and the fulfillment of all vesting conditions to the vesting of the awarded EIL Shares on such participant as specified in the EIL Share Award Scheme and the grant notice

6.	The amount payable on acceptance of the award	HK$1.00 per awarded EIL Share

7.	The remaining life of the scheme	It shall be valid and effect for a period of 10 years commencing on 19 January 2021

●	The Company’s goals and strategies;

●	The Company’s future business development, financial conditions and results of operations;

●	Fluctuations in prices, interest rates and other factors that may increase the Company’s costs significantly;

●	The Company’s expectations regarding demand for and market acceptance of its products and services;

●	Competition in the Company’s industry;

●	Relevant government policies and regulations relating to the Company’s industry, including governmental policies in the Peoples Republic of China as well as other governmental or sovereign risk factors related to the Peoples Republic of China and its relationship with the United States;

●	The Company’s ability to continue to diversify its manufacturing and operations in the U.S. and globally;

●	The growth of the renewable energy sector; and

●	The U.S. and global economy including any recession or other adverse economic factors that limit the ability of the Company’s customers to purchase its products, including such customer’s ability to continue investment in the renewable energy sector.