Group 1 - The core point of the article is that Wu Wencup has reduced his stake in Xinshi Electric Vehicle Materials (06128) by selling 46 million shares at a price of HKD 0.196 per share, totaling HKD 9.016 million [1] - After the transaction, Wu Wencup's remaining shareholding is 47.5 million shares, representing a 5.06% ownership in the company [1] - The transaction also involves other related parties, specifically Shen Taoyu [1]

致：香港交易及結算所有限公司 公司名稱: 烯石電動汽車新材料控股有限公司 (於開曼群島註冊成立的有限公司) 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 06128 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 1,800,000,000 | HKD | | 0.05 | HKD | | 90,000,000 | | 增加 / 減少 (-) | | | 0 | | | | HKD | | 0 | | 本月底結存 | | | 1,800,000,000 | HKD | | 0.05 | HKD | | 90,000,000 | | 2. 股份分類 | 優先股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | ...

Financial Performance - Revenue for the year ended December 31, 2024, was HKD 187,850,000, a decrease of 36% compared to HKD 291,929,000 in 2023[4] - Adjusted segment EBITDA for graphene products was HKD 17,734,000, down 54% from HKD 38,319,000 in the previous year[4] - The company reported a pre-tax loss of HKD 119,168,000, which is a 4% increase from a loss of HKD 114,281,000 in 2023[4] - Total assets decreased by 4% to HKD 809,348,000 from HKD 847,343,000 in 2023[4] - Cash and bank balances fell by 43% to HKD 15,547,000 compared to HKD 27,190,000 in the previous year[4] - The net asset value decreased by 24% to HKD 280,360,000 from HKD 369,638,000 in 2023[4] - The graphene products segment reported a revenue decline of 39% year-on-year to approximately HKD 118.0 million, accounting for 63% of the group's total revenue[24] - The total revenue of the group decreased to approximately HKD 187.9 million, a 36% decrease compared to HKD 291.9 million for the year ended December 31, 2023[31] - The adjusted EBITDA for the graphene products segment fell by 54% to approximately HKD 17.7 million[24] - The landscape design segment contributed approximately HKD 69.9 million in revenue, representing a 28% decrease from approximately HKD 97.0 million[28] - The group experienced a 24% increase in impairment losses on financial and contract assets, rising to approximately HKD 27.7 million from HKD 22.3 million[35] - The group reported a net loss attributable to equity holders of approximately HKD 111.4 million for the year ended December 31, 2024, compared to a loss of HKD 113.2 million in the previous year[41] Strategic Plans and Market Position - The company plans to focus on enhancing resilience and strategic deployment in 2025 despite ongoing challenges[14] - Expansion plans in China faced unexpected delays due to logistics and administrative issues, affecting the timeline for new anode material production facilities[14] - The company sees potential value in its role within the U.S. battery materials supply chain due to export restrictions on graphite and graphene products[14] - The company anticipates new revenue sources from government incentives in renewable energy, electric vehicles, drones, and robotics[14] - The group plans to continue increasing its graphene product capacity despite geopolitical tensions affecting global expansion strategies[24] - The company plans to invest at least RMB 200 million in the first phase of a graphite deep processing project, aiming for an annual production of 20,000 tons of high-purity spherical graphite[47] - The estimated total investment for the first phase of the lithium-ion battery anode material project in Laixi City is approximately RMB 1 billion[48] - A comprehensive five-year plan has been established focusing on capacity expansion, R&D enhancement, and innovative battery systems[60] - The company anticipates strong demand for lithium-ion batteries driven by the global shift towards electrification, particularly in electric vehicles and renewable energy storage[60] Governance and Compliance - The company has adopted a dividend policy since January 8, 2019, allowing shareholders to share in profits while retaining sufficient reserves for future development[96] - The board will continue to review the dividend policy and reserves the right to update, amend, and modify the policy at any time[99] - The company emphasizes the importance of board diversity to enhance performance quality, considering various measurable aspects such as gender, age, ethnicity, knowledge, and tenure[101] - The board currently consists of eight members, including three executive directors, one non-executive director, and four independent non-executive directors[112] - The company has five independent non-executive directors, which is at least one-third of the board members[112] - The board is responsible for developing the company's strategy, overseeing operations and financial performance, and ensuring effective governance and risk management systems[113] - The nomination committee reviews the board's composition annually to ensure diversity and effectiveness[103] - The company adopted a nomination policy on December 31, 2018, to ensure a balanced and suitable skill set on the board[105] - Independent non-executive directors have confirmed their compliance with independence standards as per listing rules[112] - The board has established mechanisms to ensure independent opinions and perspectives are available to all directors[116] - The company has a mechanism for indemnifying directors and senior officers against costs and liabilities incurred in the execution of their duties[116] - The nomination committee evaluates potential candidates based on integrity, commitment, and diversity factors[108] - The board is responsible for preparing financial statements that fairly reflect the company's affairs and performance[115] - The board plans to hold at least four regular meetings annually, with a total of eight meetings scheduled for 2024[118] - The company encourages continuous professional development for directors to enhance their knowledge and skills[124] - The company’s compliance with legal regulations and corporate governance policies is regularly reviewed[121] - Directors are required to retire and seek re-election at least every three years, ensuring board refreshment[122] - The company has established specific committees, including the Audit, Remuneration, and Nomination Committees, to enhance governance[126] - The company’s governance report includes a commitment to maintaining effective internal controls and risk management systems[127] Risk Management - The company has established a risk management system that includes risk identification, assessment, and management to mitigate potential impacts on business objectives[134] - Major risks identified include market risk due to a slowdown in China's real estate development, which could affect demand for design services[136] - Credit risk is a concern, particularly regarding accounts receivable management, with measures in place to address overdue payments[136] - The company has implemented a comprehensive IT security policy to mitigate risks associated with network security threats, which are increasingly relevant to its operations[138] - The company is committed to monitoring and managing significant risks that could adversely affect its performance and strategic execution[135] - The board reviews the effectiveness of the risk management and internal control systems annually, concluding that these systems are effective and adequate, providing reasonable assurance against significant errors or losses[141] - The internal audit function operates independently and evaluates the risk management and internal control systems through interviews, process tracking, and operational efficiency testing[142] Shareholder Communication and Equity - The company encourages effective communication with shareholders and stakeholders, providing detailed information through annual reports and interim reports[147] - The company has a dedicated company secretary who has complied with the relevant professional training requirements under the listing rules[143] - The company has a total equity of 98,610,887 shares, representing approximately 8.4% of the issued share capital[70] - The company has a total equity of 680,000 shares, representing approximately 0.06% of the issued share capital[73] - The company has outstanding bonds of approximately HKD 113.8 million and issued bills of approximately HKD 61.7 million as of December 31, 2024[44] - The company issued 2,400,000 and 43,689,383 ordinary shares on May 8, 2024, and June 28, 2024, respectively, to offset liabilities totaling HKD 5,890,600[51] - The company completed a placement of 185,480,000 shares at a price of HKD 0.066 per share, raising approximately HKD 11.97 million[54] - The intended use of the net proceeds includes repaying loans of HKD 11,865 million and general working capital of HKD 105 million, totaling HKD 11,970 million[54] - A rights issue will be conducted at a subscription price of HKD 0.170 per share, aiming to raise approximately HKD 119.7 million by issuing 704,284,056 shares[58] Employee and Share Incentive Plans - The company has approximately 232 employees as of December 31, 2024, with compensation based on job nature, market trends, and individual performance[50] - The company has adopted a new share incentive plan effective from February 6, 2023, after terminating the existing share option and incentive plans[195] - The total number of share options available for issuance under the share option plan is 1,935,538 shares, which is approximately 0.82% of the issued shares as of the report date[191] - The company has 9,677,692 share options that are unexercised as of December 31, 2024, which represents about 1.00% of the weighted average number of shares issued and outstanding[191] - A total of 35,231,235 shares were granted to three employees and eight service providers, representing approximately 4.53% of the company's issued shares as of June 12, 2023[196] - The fair value of the shares granted on June 12, 2023, was estimated at HKD 0.455 per share, based on the closing price of HKD 0.425 per share on the grant date[196] - On July 24, 2023, a total of 22,990,000 shares were granted to three directors and thirteen employees, representing about 2.94% of the company's issued shares[198] - The fair value of the shares granted on July 24, 2023, was estimated at HKD 0.46 per share, based on the closing price of HKD 0.47 per share on the grant date[198] - A total of 10,128,072 shares were granted to twelve employees on December 14, 2023, representing approximately 1.13% of the company's issued shares[198] - The fair value of the shares granted on December 14, 2023, was estimated at HKD 0.38 per share, based on the closing price of HKD 0.375 per share on the grant date[198] - The total number of shares granted under the 2023 Share Incentive Plan is capped at 68,349,307 shares, which is 10% of the company's issued shares as of the plan adoption date[197] - The maximum allocation for each participant is limited to 1% of the company's issued share capital[197] - The shares granted under the 2023 Share Incentive Plan do not have performance targets but are subject to general clawback provisions[199] - The plan is effective for ten years from February 6, 2023[197]

Financial Performance - Total revenue for the year ended December 31, 2024, was HKD 187.85 million, a decrease of 36% compared to HKD 291.93 million in 2023[5] - Revenue from graphene products declined by 40% to HKD 117.95 million from HKD 194.93 million[5] - Adjusted segment EBITDA fell by 40% to HKD 20.11 million from HKD 33.24 million[5] - The company reported a pre-tax loss of HKD 119.17 million, a 4% increase from a loss of HKD 114.28 million in the previous year[5] - Basic loss per share attributable to ordinary equity holders of the parent was HKD 11.5 cents, a 22% improvement from HKD 14.8 cents in 2023[5] - The company reported a total comprehensive loss of HKD 121,248,000 for the year ended December 31, 2024, compared to a loss of HKD 120,927,000 in 2023, indicating a slight increase in losses[8] - The company recorded a loss attributable to equity holders of HKD 111,435,000 for the year ending December 31, 2024, with a net current liability of HKD 104,616,000[13] - The net loss attributable to the owners of the parent company for the year ending December 31, 2024, was approximately HKD 111.4 million, compared to a net loss of approximately HKD 113.2 million in 2023[49] Assets and Liabilities - Total assets decreased by 5% to HKD 809.35 million from HKD 847.34 million[5] - Net asset value dropped by 24% to HKD 280.36 million from HKD 369.64 million[5] - Cash and bank balances decreased by 43% to HKD 15.55 million from HKD 27.19 million[5] - The company’s total debt, including lease liabilities, increased by 1% to HKD 235.98 million from HKD 233.17 million[6] - The total liabilities increased to HKD 528,988,000 in 2024 from HKD 477,705,000 in 2023, showing an increase of approximately 10.7%[10] - The company’s equity attributable to shareholders decreased to HKD 280,359,000 in 2024 from HKD 369,687,000 in 2023, a decline of about 24.1%[10] - Current assets as of December 31, 2024, were HKD 262.4 million, while current liabilities were HKD 367.0 million, resulting in a current ratio of 0.71, down from 0.77 in 2023[51][52] Revenue Breakdown - Revenue from landscape design services was HKD 69,899,000, compared to HKD 97,000,000 in 2023[18] - Geographically, total revenue from mainland China was HKD 160,472,000, while revenue from Hong Kong was HKD 24,842,000[19] - Revenue from the graphene segment decreased to approximately HKD 118 million, a reduction of about 40% compared to HKD 194.9 million for the year ending December 31, 2023; total revenue decreased to approximately HKD 187.9 million, down about 36% from HKD 291.9 million[44] Cost Management - The cost of sales for 2024 was HKD 119,543,000, down from HKD 195,108,000 in 2023, indicating a significant reduction in operational costs[25] - Administrative expenses for 2024 were HKD 134,456,000, a decrease from HKD 143,267,000 in 2023, reflecting improved cost management[26] - Financial costs decreased from HKD 23,748,000 in 2023 to HKD 17,011,000 in 2024, indicating a reduction in interest expenses[27] - Selling, marketing, and administrative expenses decreased to approximately HKD 136.2 million, down about 8% from HKD 148.5 million in the same period of 2023[47] Strategic Focus and Future Plans - The company is focused on developing graphene products, particularly for electric vehicles and energy storage systems, indicating a strategic emphasis on innovation and market expansion[11] - The company has established a comprehensive five-year plan focusing on capacity expansion, strengthening R&D, and exploring innovative battery systems to meet the evolving demands of various battery chemistry structures[67] - The company plans to raise approximately HKD 119.7 million through a rights issue at an issue price of HKD 0.170 per share, with 704,284,056 shares to be issued[14] - The company plans to invest approximately RMB 1 billion in the lithium-ion battery anode materials project in Laixi, Shandong, pending government approvals[57] Corporate Governance and Compliance - The company is committed to high standards of corporate governance to ensure shareholder rights and enhance corporate value and accountability[68] - The company has confirmed compliance with the corporate governance code as of December 31, 2024[68] - The independent auditor's report indicates that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2024[75] Market Conditions and Risks - The global shift towards electrification is expected to drive demand for rechargeable batteries, particularly in electric vehicles and renewable energy storage[66] - The demand for graphite, a key material for lithium-ion battery anodes, is anticipated to remain strong due to its advantages in reliability, efficiency, and cost-effectiveness[66] - There are significant uncertainties regarding the company's ability to continue as a going concern due to financial losses and liabilities exceeding assets[76] Employee and Operational Insights - The company employs approximately 232 employees, providing competitive salaries and benefits, including mandatory provident fund and retirement plans[60] - The company has committed capital expenditures of RMB 563.7 million for the purchase of properties, plants, and equipment as of December 31, 2023[56]

Exhibit 99.1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional advisers. If you have sold or transferred all your shares in Graphex Group Limited (the "Company"), you should at once hand this circular together with the accompanying form of proxy to the purc ...

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 93,742, a decrease of 38.0% compared to HKD 151,274 for the same period in 2023[1] - Adjusted segment EBITDA for the period was HKD 4,682, down 75.7% from HKD 19,269 in the previous year[1] - The pre-tax loss increased to HKD 57,303, representing a 22.5% rise from HKD 46,780 in the prior year[1] - The loss attributable to equity holders of the parent was HKD 54,096, an increase of 23.0% from HKD 43,968 in the previous year[1] - Basic loss per share for the period was HKD 6.00, a slight decrease of 1.0% from HKD 6.06[1] - The total comprehensive loss for the period was HKD 57,752, slightly improved from HKD 58,144 in the prior year[7] - The company reported a pre-tax loss of HKD 57,303,000 for the six months ended June 30, 2024, compared to a loss of HKD 46,780,000 in the same period of 2023, indicating an increase in losses of approximately 22%[13] - The company reported a net loss attributable to the owners of the company for the six months ended June 30, 2024, was approximately HKD 54.1 million, compared to a net loss of HKD 44.0 million for the same period in 2023[80] Assets and Liabilities - Total assets as of June 30, 2024, were HKD 839,316, a slight decrease of 0.9% from HKD 847,343 at the end of 2023[2] - Net asset value decreased by 10.9% to HKD 329,247 from HKD 369,638 at the end of 2023[2] - Cash and bank balances fell significantly by 61.8% to HKD 10,391 from HKD 27,190[2] - As of June 30, 2024, non-current assets totaled HKD 570,006,000, a decrease of 5.1% from HKD 600,844,000 as of December 31, 2023[8] - Current assets increased to HKD 269,310,000, up 9.2% from HKD 246,499,000 at the end of 2023[8] - Total current liabilities rose to HKD 367,829,000, an increase of 14.9% compared to HKD 320,168,000 in December 2023[9] - The net current liabilities amounted to HKD (98,519,000), worsening from HKD (73,669,000) in the previous period[9] - The company's total equity decreased to HKD 329,247,000 from HKD 369,638,000, reflecting a decline of 10.9%[9] - The total liabilities increased to HKD 510,069,000 as of June 30, 2024, compared to HKD 477,705,000 as of December 31, 2023[29] Revenue Breakdown - Revenue from graphene product sales was HKD 61,489,000, down 36.6% from HKD 97,103,000 in the previous year[23] - Revenue from landscape design services decreased by 40.5% to HKD 32,253,000 from HKD 54,171,000 year-on-year[23] - The operating loss for the graphene product segment was HKD 15,830,000, while the landscape design segment reported an operating loss of HKD 13,058,000, totaling an overall operating loss of HKD 28,888,000[26] Cash Flow and Financing - Cash flow from operating activities showed a net outflow of HKD 739,000, a significant improvement from the outflow of HKD 8,332,000 in the previous year, reflecting a reduction in cash used in operations[13] - The company recorded a net cash outflow from investing activities of HKD 14,383,000, compared to HKD 3,240,000 in the prior year, primarily due to increased loans to joint ventures[14] - Financing activities resulted in a net cash outflow of HKD 1,587,000, an improvement from HKD 2,194,000 in the previous year, driven by reduced repayments of bank loans[14] - The company has secured short-term financing of HKD 20,000,000 to support its working capital needs[19] Strategic Focus and Future Plans - The company is focused on the development and processing of graphene products, particularly for lithium-ion battery applications in electric vehicles[15] - The company plans to continue focusing on the development of new technologies and market expansion strategies in the upcoming quarters[37] - The company plans to implement an expansion plan in Laixi, Shandong Province, to capitalize on the growing demand for graphite anode materials in the lithium-ion battery market[71] - The company plans to collaborate with the government of Laixi City for a lithium-ion battery anode materials project, with an estimated total investment of RMB 1 billion, expected to be completed by September 2024[86] Employee and Corporate Governance - The company had 249 employees as of June 30, 2024, with compensation based on job nature, market trends, and individual performance[88] - Employee benefits include mandatory provident fund contributions, retirement plans, medical coverage, and training programs, ensuring competitive compensation packages[88] - The audit committee has been established to review and supervise the financial reporting and internal control processes, consisting of three independent non-executive directors[115] - The company has complied with the corporate governance code as per the listing rules for the six months ending June 30, 2024[112] Shareholder and Market Relations - The company expressed gratitude to shareholders, business partners, subcontractors, and customers for their continued support[120] - The chairman acknowledged the contributions of dedicated employees to the group's outstanding achievements[120] - The earnings call highlighted the importance of stakeholder relationships in driving future growth[120] - The company aims to invest in new product development and technological advancements[120] ESG and Sustainability - The company is committed to improving ESG standards and sustainable practices in the production of battery materials[92] - The company regularly evaluates its ESG measures to meet the growing expectations of stakeholders regarding environmental and social responsibilities[92]

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 93,742,000, a decrease of 38.0% compared to HKD 151,274,000 in the same period of 2023[2] - Graphene product revenue decreased by 36.7% to HKD 61,489,000 from HKD 97,103,000 year-on-year[2] - Adjusted segment EBITDA fell by 75.7% to HKD 4,682,000 from HKD 19,269,000 in the previous year[2] - The loss attributable to equity holders of the parent increased by 23.0% to HKD 54,096,000 compared to HKD 43,968,000 in the prior period[2] - Basic loss per share was HKD (6.00), a slight improvement of 1.0% from HKD (6.06) in the previous year[2] - The company reported a net loss of HKD 54,046,000 for the six months ended June 30, 2024, compared to a net loss of HKD 41,775,000 in the prior year, representing a 29.4% increase in losses[5] - The pre-tax loss for the six months ended June 30, 2024, was HKD 57,303,000, compared to a pre-tax loss of HKD 46,780,000 in 2023, indicating a worsening of 22.5%[23] - The company reported a pre-tax loss of HKD 7,374,000 for graphene products, compared to a loss of HKD 16,012,000 in the previous year, reflecting a 53.9% improvement[2] Assets and Liabilities - Total assets as of June 30, 2024, were HKD 839,316,000, a decrease of 0.9% from HKD 847,343,000 at the end of December 2023[2] - Net assets decreased by 10.9% to HKD 329,247,000 from HKD 369,638,000[2] - Cash and bank balances decreased by 61.8% to HKD 10,391,000 from HKD 27,190,000[2] - The company's total liabilities increased to HKD 367,829,000 from HKD 320,168,000, an increase of 14.9%[6] - As of June 30, 2024, total assets amounted to HKD 839,316,000, with total liabilities at HKD 510,069,000[19] - The current ratio as of June 30, 2024, was approximately 0.73, down from 0.77 as of December 31, 2023[59] - The debt ratio was approximately 65.9% as of June 30, 2024, compared to 57.8% as of December 31, 2023[59] Revenue Breakdown - For the six months ended June 30, 2024, the total revenue from graphene products was HKD 61,489,000, while landscape design generated HKD 32,253,000, resulting in a combined revenue of HKD 93,742,000[17] - Revenue from landscape design services was HKD 32,253,000, a decline of 40.5% compared to HKD 54,171,000 in the previous year[15] - Revenue from the landscape design segment decreased to approximately HKD 32.2 million, a reduction of about 41% compared to HKD 54.2 million in the previous year, primarily due to a slowdown in the Chinese real estate market[48] Operational Focus and Strategy - The company continues to focus on enhancing its product offerings and exploring market expansion opportunities[3] - The company continues to focus on the development and processing of graphene products, particularly for electric vehicles and energy storage systems[9] - The company is exploring cost control measures to reduce operating costs[12] - The company plans to establish a deep processing production facility for graphite in Jixi, aiming for an annual output of 30,000 tons of high-purity spherical graphite and 10,000 tons of battery anode materials[65] - The company believes that electrification is a viable path for sustainable development, with an increasing demand for lithium-ion batteries, which will continue to use Stone Ink negative electrode materials[70] - A five-year plan has been established to invest in capacity expansion, research and development, and new battery systems[70] Employee and Management Information - As of June 30, 2024, the company had 249 employees, with compensation based on job nature, market trends, and individual performance, and provided various employee benefits including mandatory provident fund and medical insurance[68] - The company’s employee benefits expenses, including director and key management personnel remuneration, totaled HKD 41,289,000, down from HKD 47,451,000 in 2023, a decrease of 13.8%[28] Governance and Compliance - The company has complied with the corporate governance code as of June 30, 2024, and regularly reviews its governance practices[72] - The board of directors does not recommend the payment of an interim dividend for the six months ending June 30, 2024[77] Future Outlook and Risks - The company emphasizes that forward-looking statements may involve various risks and uncertainties that could significantly affect actual performance compared to expectations[80] - The company warns that reliance on forecasts based on various assumptions may not accurately reflect future market conditions[81] - The company recognizes the potential impact of government policies and regulations on its operations, particularly in relation to the U.S. and China[80] - There is an expectation of increased demand for the company's products and services, although market acceptance remains uncertain[80]

Share Award Plan - A total of 68,349,307 shares were granted under the 2023 Share Award Plan, with 15,094,797 shares awarded to directors and senior management[4]. - Of the shares awarded to directors and senior management, 10,554,797 shares were granted to 2 senior management members, with a vesting period not exceeding 12 months from the grant date[4]. - The 2023 Share Award Plan aims to attract and retain talent, providing shares as part of compensation to promote business development and growth[5]. - The share awards are designed to align with the company's goals of business growth and to enhance loyalty among key participants[5]. - The plan considers factors such as industry experience, tenure, and the potential contributions of participants to the company's business development[12]. - The total number of shares awarded reflects the company's commitment to incentivizing key personnel for sustained operational engagement and growth[5]. - The share awards are part of a broader strategy to ensure competitive compensation compared to industry peers[12]. - The 2023 share award plan details remain unchanged and should be read in conjunction with the annual report[14]. Compensation and Motivation - The compensation committee believes that the awarded shares will motivate recipients to contribute to the company's future development, despite the absence of performance targets and limited clawback mechanisms[7]. - The company emphasizes that the share awards do not carry performance targets but are subject to general clawback provisions in cases of misconduct[11]. - The compensation committee believes that granting share awards with a vesting period of less than twelve months is appropriate and necessary to attract and retain valuable talent[13]. - The company aims to provide competitive employment packages to enhance employee loyalty and commitment, thereby promoting business development and growth[13]. Strategic Focus - The company is focused on enhancing its operational capabilities through strategic talent acquisition and retention initiatives[5].

Financial Performance - Revenue for the year ended December 31, 2023, decreased by 14% to HKD 291.9 million compared to HKD 341.2 million in 2022[3] - Adjusted EBITDA fell by 55% to HKD 33.2 million, with a significant drop in the landscape design segment's EBITDA, which turned negative at HKD 6.8 million[3] - The company reported a pre-tax loss of HKD 114.3 million, a 59% increase from the previous year's loss of HKD 72.0 million[3] - The landscape design segment contributed approximately HKD 97 million in revenue, accounting for 33% of the group's total revenue, with a decline of 21% from HKD 122.9 million in the previous year[24] - The graphene segment generated revenue of approximately HKD 194.9 million, a decrease of about 9.2% compared to HKD 214.6 million in the previous year, leading to a total group revenue of approximately HKD 291.9 million, down 14.4% from HKD 341.2 million[28] - Gross profit decreased to approximately HKD 96.8 million, a decline of about 19.3% from approximately HKD 120.0 million in the previous year, with a gross margin of about 33.2%, down 2 percentage points from 35.2%[30] - The company reported a net loss attributable to shareholders of approximately HKD 113.2 million for the year, compared to a loss of HKD 69.7 million in the previous year[41] Assets and Liabilities - Total assets decreased by 5% to HKD 847.3 million, while cash and bank balances fell by 14% to HKD 27.2 million[3] - The total debt, including lease liabilities, decreased by 24% to HKD 233.2 million[3] - As of December 31, 2023, the company's current ratio is approximately 0.77, down from 0.82 on December 31, 2022[43] - The cash and bank balance as of December 31, 2023, is approximately 27.2 million HKD, compared to 31.5 million HKD as of December 31, 2022[43] - The company's capital debt ratio is approximately 63.08% as of December 31, 2023, a decrease from 76.9% on December 31, 2022[43] - The company has outstanding bonds of approximately 115.4 million HKD and issued bills of approximately 61.0 million HKD as of December 31, 2023[46] Business Operations and Strategy - The company plans to expand its lithium-ion battery anode material production capacity from 10,000 tons to 30,000 tons by 2024[14] - The company is focusing on producing anode materials using non-Chinese raw materials, validated by potential U.S. customers[14] - The landscape design business faced unprecedented challenges due to the deteriorating real estate market in China, but the company remains cautiously optimistic about recovery efforts[14] - The company plans to invest at least 200 million RMB in the first phase of a graphite deep processing production facility, with an annual output of 20,000 tons of high-purity spherical graphite[49] - The total estimated investment for the first phase of the lithium-ion battery anode material project in Laixi City is approximately 1 billion RMB, expected to be completed by September 2024[51] - The company anticipates increased demand for lithium-ion batteries, focusing on producing graphite anode materials to meet various battery chemistry needs, supported by a five-year plan for capacity expansion and R&D[67] Governance and Management - The company has a strong management team with diverse backgrounds in finance, law, and landscape architecture[84] - The board consists of eight members, including three executive directors, one non-executive director, and four independent non-executive directors, ensuring a diverse and qualified leadership team[131] - The board is responsible for developing the group's strategy and overseeing operational and financial performance, ensuring effective governance and risk management systems[132] - The company emphasizes the importance of training and continuous professional development for directors and senior management[137] - The company has established specific committees, including the audit committee, remuneration committee, and nomination committee, to enhance governance effectiveness[148] Risk Management - The company faces significant risks including market risks from COVID-19, which has severely impacted the global economy, and business risks related to innovation and product development[160] - The company has implemented various proactive measures and contingency plans to maintain business operations amid the ongoing COVID-19 pandemic[160] - Credit risk is a concern if customers fail to settle progress payments on time, potentially increasing the company's credit and liquidity risks[163] - The company closely monitors its liquidity and cash flow to meet all debt obligations[163] - The company has established internal procedures to monitor compliance with local and international laws and regulations, adapting to changing government policies[163] Shareholder Relations and Dividends - The board does not recommend the payment of a final dividend for the fiscal year ending December 31, 2023[189] - The company has adopted a dividend policy allowing shareholders to share in profits while retaining sufficient reserves for future development[112] - The board will consider various factors, including financial performance and capital expenditure requirements, when deciding on dividend distributions[114] Compliance and Internal Controls - The company has established a risk management and internal control system in compliance with the corporate governance code, with management responsible for its design and implementation[158] - The company has not identified any significant control deficiencies during the internal control review conducted in 2023[166] - The company emphasizes compliance with regulatory requirements and has adhered to relevant laws and regulations throughout the fiscal year ending December 31, 2023[183]

Financial Performance - Revenue for the year ended December 31, 2023, was HKD 291,929 thousand, a decrease of 14% compared to HKD 341,241 thousand in 2022[31] - Adjusted EBITDA for 2023 was HKD 33,240 thousand, down 55% from HKD 74,463 thousand in the previous year[31] - The company reported a pre-tax loss of HKD 114,281 thousand, an increase of 59% from a loss of HKD 71,971 thousand in 2022[33] - The basic loss per share attributable to ordinary equity holders was HKD (14.8 cents), compared to HKD (12.2 cents) in the prior year, reflecting a 22% increase in loss per share[33] - Total assets decreased by 5% to HKD 847,343 thousand from HKD 894,676 thousand in 2022[31] - Cash and bank balances decreased by 14% to HKD 27,190 thousand from HKD 31,470 thousand in the previous year[31] - The company’s debt reduced by 25% to HKD 213,564 thousand from HKD 285,007 thousand in 2022[31] - The gross profit for 2023 was HKD 96,821 thousand, down from HKD 119,962 thousand in 2022[33] - The landscape design segment reported a significant decline in revenue, down 21% to HKD 97,000 thousand from HKD 122,856 thousand[31] - The graphene product segment also saw a revenue decrease of 9%, totaling HKD 194,929 thousand compared to HKD 214,614 thousand in the previous year[31] - The company recorded a loss attributable to equity holders of HKD 113,168,000 for the year ended December 31, 2023[71] - Current liabilities totaled HKD 320,168,000 as of December 31, 2023, compared to HKD 288,194,000 in 2022[68] - The company has a negative net current liabilities position of HKD 73,669,000 as of December 31, 2023[68] - For the fiscal year ending December 31, 2023, the loss attributable to ordinary equity holders of the parent was approximately HKD 113.2 million, compared to a loss of HKD 69.7 million for the fiscal year ending December 31, 2022, representing an increase in loss of about 62.5%[106] - Trade receivables and notes receivable amounted to HKD 220.7 million as of December 31, 2023, up from HKD 162.5 million as of December 31, 2022, reflecting an increase of approximately 35.7%[93] - Selling, marketing, and administrative expenses increased to approximately HKD 166.6 million, up about 3.5% from HKD 160.9 million for the same period in 2022[105] Investments and Expansion Plans - The company plans to invest in expanding production capacity and R&D for new battery systems as part of a five-year plan[2] - The company has established a strategic investment cooperation agreement with the Jixi City government to set up a deep processing production facility for graphite, targeting an annual production of 30,000 tons of high-purity spherical graphite and 10,000 tons of battery anode materials[14] - The first phase of the graphite deep processing project is estimated to require an investment of no less than RMB 200 million, with funding sourced from internal resources, bank loans, or future fundraising activities[14] - The company has signed a cooperation agreement with the government of Nanshu Town to develop a lithium-ion battery negative material project in Laixi City, Shandong Province, with an estimated total investment of RMB 1 billion[15] - The company plans to expand its negative electrode material production capacity to meet the growing demand for lithium-ion batteries, particularly in the electric vehicle and energy storage markets[98] - The group plans to expedite the expansion project in Laixi City, Shandong Province, China, to enhance production capabilities[124] Corporate Governance and Compliance - The company has complied with the corporate governance code as per the listing rules and regularly reviews its governance practices[4] - The independent auditor's report confirms that the consolidated financial statements fairly reflect the company's financial position as of December 31, 2023[10] - The company has confirmed compliance with the standard code of conduct for securities trading by all directors as of December 31, 2023[21] - The company has been granted high-tech enterprise status, allowing it to enjoy a preferential corporate income tax rate of 15% until December 31, 2025[113] Employee and Talent Management - The group employed approximately 287 employees as of December 31, 2023, with compensation determined based on job nature, market trends, and individual performance[18] - Employee benefits include mandatory provident fund contributions, retirement plans, medical coverage, insurance, and training programs[28] - The company has implemented a series of share plans to reward contributions from directors, senior personnel, employees, and service providers, aimed at attracting suitable talent[19] Financial Position and Liabilities - The group’s current ratio as of December 31, 2023, was approximately 0.77, down from 0.82 as of December 31, 2022[134] - The group’s capital debt ratio was approximately 58% as of December 31, 2023, compared to 77% as of December 31, 2022[135] - The impairment loss on trade receivables was HKD 72.7 million for the fiscal year ending December 31, 2023, compared to HKD 59.5 million for the fiscal year ending December 31, 2022, indicating an increase of approximately 22.1%[93] - The impairment losses on financial and contract assets increased to approximately HKD 22.3 million, a rise of about 17% compared to HKD 19.0 million in the same period of 2022[132] - The group reported a net loss from joint ventures of HKD 582, compared to a profit of HKD 249 in the previous year[86] - The group reported a net loss of approximately HKD 7.5 million from the sale of subsidiaries, including Yummy Food Holdings Limited and Thai Lang Hong Kong Limited[138] - The company has no significant or contingent liabilities as of December 31, 2023[148] Revenue Breakdown - Total revenue for the current year reached HKD 291.93 million, with graphene product sales contributing HKD 194.93 million and landscape design services contributing HKD 97 million[77] - Revenue from the Chinese mainland accounted for HKD 265.56 million, while revenue from Hong Kong was HKD 25.32 million[77] - The total revenue of the group decreased to approximately HKD 291.9 million, a year-on-year decrease of about 14.4% from HKD 341.2 million in 2022[139] - Revenue from the graphene products segment decreased by 9% year-on-year to approximately HKD 194.9 million, accounting for 67% of the group's total revenue, with a maintained gross profit margin of 28% compared to 25% in 2022[124] - The landscape design segment contributed revenue of approximately HKD 97 million, accounting for about 33% of total group revenue, which decreased by HKD 25.9 million or 21% compared to HKD 122.9 million for the fiscal year ending December 31, 2022[99] Leasing and Capital Commitments - The company has entered into a 10-year lease agreement for a factory in Laixi, Shandong Province, China, with a total rental payment of approximately RMB 58,871,806.82 (about HKD 65,936,423.64) over the lease term[1] - A leasing agreement for a factory has been established with a total duration of 10 years and a total rental amount of RMB 58,871,860.82 (approximately HKD 65,936,423.64)[15] - As of December 31, 2023, the company has capital commitments of HKD 5,760,000 for the purchase of properties, plants, and equipment, down from HKD 7,523,000 in 2022[14] Future Outlook and Funding - The company expects to have sufficient operating funds to meet its financial obligations for at least the next twelve months[71] - The board is in discussions with potential investors regarding raising new funds through the issuance of new shares and/or debt securities[54] - The group secured a short-term loan of HKD 20 million for operational funding[72] - The project company received a letter of intent from a major Chinese bank for a proposed loan of RMB 400 million[73] - The company plans to apply for relevant policy subsidies under the "Laixi City Investment Promotion Certain Preferential Measures (Trial)" after obtaining all necessary government approvals[15]