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Public company info - Graphex Group Limited , 06128.HK
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Graphex Group Limited, 06128.HK - Company Profile
Chairman Lau Hing Tat Patrick
Share Issued (share) 488,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Construction & Decoration
Corporate Profile Business Summary: The principal activity of the Group is landscape architecture mainly in Hong Kong and Mainland China, catering business in Mainland China and Italy, and graphene business in Mainland China. Performance for the year: Revenue increased to approximately HK$313.9 million for the year ended 31 December 2019, representing an increase of approximately 59.1%, as compared with that of approximately HK$197.3 million for the year ended 31 December 2018. Gross profit increased to approximately HK$146.4 million for the year ended 31 December 2019, representing an increase of approximately 28.2%, as compared with that of approximately HK$114.2 million for the year ended 31 December 2018. Gross profit margin decreased by approximately 11.3 percentage points to approximately 46.6% for the year ended 31 December 2019, as compared with that of approximately 57.9% for the year ended 31 December 2018. The loss attributable to owners of the parent was approximately HK$57.1 million for the year ended 31 December 2019, as compared with loss attributable to owners of the parent of approximately HK$36.0 million for the year ended 31 December 2018. Business Review Landscape Architecture Business The Group maintained its market position as one of the leading landscape architecture service providers predominantly in the PRC and Hong Kong. It offered a wide range of landscape architecture services to clients including governments, public bodies, private property developers, state-owned property developers, town planning companies, architecture companies and engineering companies in the PRC and Hong Kong. The Group continued to undertake four major types of landscape architecture projects which can be categorised into (i) residential development projects; (ii) infrastructure and public open space projects; (iii) commercial and mixed-use development projects; and (iv) tourism and hotel projects. In 2019, residential development projects continued to be the largest segment in terms of revenue, which accounted for approximately 50.0% (2018: 51.1%) of the total revenue among the landscape architecture business. Commercial and mixed-use development projects represented the second largest segment in terms of revenue, which accounted for approximately 23.0% (2018: 18.3%) of the total revenue among the landscape architecture business. For the year ended 31 December 2019, the Group entered into 144 new contracts with a total contract sum of approximately HK$165.7 million for projects located in the PRC and 30 new contracts with a total contract sum of approximately HK$30.1 million for projects located in Hong Kong and others. Geographically, approximately 84.6% of the new contract sum represented projects located in the PRC and approximately 15.4% represented projects located in Hong Kong and others in terms of contract sum. In 2019, the Group recorded a drop of new contracts from the landscape architecture segment. The new contract decreased to approximately HK$195.8 million for the year ended 31 December 2019, representing a decrease of approximately 25.7%, as compared with that of approximately HK$263.5 million for the year ended 31 December 2018. Catering Business The Group’s catering business is mainly represented by Thai Gallery (HK) Limited and its subsidiaries (the “Thai Gallery Group”) in 2019. Thai Gallery Group mainly managed and operated restaurants serving Thai cuisine in the PRC and Italy under the reputable brand “Thai Gallery (泰廊)”. The first Thai Gallery restaurant has been launched in Jing’an Park of Shanghai, the PRC and operated for nearly 20 years. Today, the Thai Gallery restaurant in Shanghai has become an attraction spot to both local residents and foreign visitors. It has been awarded the Best Southeast Asian Restaurant (Reader’s Pick) organised by the website Shanghai WOW! It has also received very high popularity and praises in certain food and online restaurant guides such as Dazhong Dianping. The Group’s catering revenue decreased to approximately HK$36.4 million for the year ended 31 December 2019, representing a decrease of approximately 10.2%, as compared with that of approximately HK$40.5 million for the year ended 31 December 2018. The decrease in revenue from the catering segment mainly due to the cease of operations of Suzhou Industrial Park Wenlvge Hotel Management Company Limited (the “Wenlvge”) which operates restaurants serving Japanese ramen, Japanese curry and other Japanese-style dishes in the PRC during the year. In addition, the Group also ceased operations of one Thai Gallery restaurant in UPARK, Chengdu and Le Colonial restaurant, which served Vietnamese cuisine in the PRC, during the year due to the worsening operating and market environment. Graphene Business The Group completed the acquisition of 100% issued share capital of Think High Global Limited (“Think High”) on 7 August 2019. Think High’s principal businesses include the development, production and sales of graphene products. Think High operated research and development and sales of graphene and carbon-related products in Jixi City, Heilongjiang Province through its wholly-owned subsidiaries, Shanghai Tanao New Material Technology Company Limited* and Heilongjiang Mudanjiang Agriculture Tanao Graphene Deep Processing Company Limited* . From 7 August 2019 to 31 December 2019, the graphene segment contributed revenue of approximately HK$123.5 million, representing approximately 39.3% of the Group’s total revenue, with an adjusted EBITDA of approximately HK$19.0 million. Graphene is a thin layer of pure carbon atoms and and is the thinnest and hardest nanomaterial known at present. Its features include ultra-thin, ultra-light, ultra-flexible, ultra-high strength, ultra-conductive, excellent thermal conductivity and light transmission. With excellent light transmission, high thermal conductivity, high electron mobility, low resistivity, high mechanical strength, it has broad and huge application potential in electronics, optics, magnetism, biomedicine, catalysis, energy storage and sensors and many other fields. It is a super material that will pilot future high-tech competition. It is called “Black Gold” and “King of New Materials”. As a new type of nanomaterial, graphene has huge application potential and revolutionary changes in many fields such as electronic information, new materials, new energy, biomedicine, environmental protection due to its excellent properties. Various countries and international enterprises have dedicated more resources on research and development, production and application of graphene, aiming to grasp the leading edge of the industry. Prospects: It is expected that 2020 will be full of challenges and uncertainties. The recent outbreak of the coronavirus disease to various countries and regions, coupled with the development of China-US trade tensions and a sharp fall in international oil prices, have posed uncertainties on the global economy and business outlook of the Group. As to landscape architecture segment in Hong Kong and the PRC, the various external and domestic factors that affected the Hong Kong economy last year continue to affect the economic performance during 2020. However, the Group believes the impact on the Group in this segment is relatively mild given a relatively stable contract backlogs of the Group's design projects which are of continuing and ongoing basis. The Group's people can work from home during the disruption period. It is expected that the PRC Government may further increase expenditure on public infrastructure to combat the coronavirus which may have positive impact on the Group's design segment. As to catering segment, the Group has followed the PRC Government policy to temporarily suspend operations of certain restaurants in Chengdu and Shanghai, the PRC for a couple of weeks since the Chinese new year. In March, one of the Group’s Thai Gallery restaurant in Milan, Italy was also suspended due to the widespread of the coronavirus disease across Italy. The Group believes the prospect of the Group's catering segment is full of uncertainties. There may be a weakening demand due to decline of inbound visitors in the next couple of months through tightened border control measures by different governments. As to graphene segment, the Group completed the acquisition of 100% issued share capital of Think High Global Limited in August 2019 and commenced the graphene business. Despite a suspension of operations of the graphene production factory in Jixi, Heilongjiang province, the PRC in the first quarter, the Group believes the graphene segment will be the key contributor to the growth of the Group in the future. Meanwhile, many countries around the world have invested in research, development and production of graphene, and have released or funded a series of graphene related research plans and projects. Several renowned multinational companies have adopted graphene and its application technology as a long-term strategic development direction. Institutions and enterprises specializing in graphene research and development, production and application have also emerged. The Company currently has 16 patented technologies in this field, and are applying other 5 patents. The main products include nano-sized spherical graphite and high-purity graphite. The main scope of its application includes automotive power batteries and lithium-ion batteries, battery conductive agents, refractory materials for the steel industry, and heat sink materials for precision electronics. In 2020, the Group will continue to increase its investment in graphene technology and midto-upstream products, and plans to launch new products for the production of graphene film heat sink, carbon nanotubes and new battery electrode materials for electric vehicles. Those are expected to enhance the revenue and profit of the Group. The Group's goal is to be a leading company in the graphene industry. The Group strives to reinforce the graphene industry chain in the future by actively seeking investment opportunities in downstream projects to generate synergies in order to strengthen the Group’s position in the graphene industry. 2020 will be full of uncertainties as well as opportunities. The Directors believe the joint efforts of the Group's management and staff can broaden the revenue streams of the Group and will have overall improvements in 2020. The Directors will continue to explore new business and investment opportunities that may generate additional income to the Group.

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