Graphex Subsidiary Leases China Factory for 10 Years

TL;DR

**Graphex just locked in a 10-year factory lease in China, signaling major expansion plans.**

AI Summary

Graphex Group Ltd. (NYSE American: GRFX) announced on January 10, 2024, that its indirect wholly-owned subsidiary, the Tenant, entered into a 10-year lease agreement for factory buildings in Laixi City, Shandong Province, PRC. This lease, consisting of an initial 5-year term and an automatic 5-year extension, is a material agreement under Hong Kong Stock Exchange rules. This matters to investors because securing long-term factory space in China suggests Graphex is expanding its operational capacity, which could lead to increased production and revenue, but also implies long-term financial commitments.

Why It Matters

This long-term lease signals Graphex Group's commitment to expanding its manufacturing footprint in China, potentially boosting future production capacity and revenue, but also locking in significant long-term liabilities.

Risk Assessment

Risk Level: medium — While expansion can be positive, a 10-year lease represents a significant long-term financial commitment and operational risk if market conditions change or demand doesn't meet expectations.

Analyst Insight

An investor should monitor Graphex Group's future earnings reports for details on the financial impact of this 10-year lease, specifically looking for increased production output and associated revenue growth to justify the long-term commitment.

Key Numbers

• 10 years — Lease Term (The total duration of the factory building lease agreement.)
• 5 years — Initial Lease Term (The first period of the lease before automatic extension.)

Key Players & Entities

• Graphex Group Limited (company) — the registrant and parent company
• indirect wholly-owned subsidiary (company) — the Tenant entering the lease agreement
• Landlord (company) — the lessor of the property
• Laixi City, Shandong Province, PRC (location) — location of the leased factory buildings
• January 10, 2024 (date) — date the lease agreement was entered
• 10 years (duration) — aggregate term of the lease agreement
• 5 years (duration) — initial and subsequent terms of the lease

Forward-Looking Statements

• Graphex Group's production capacity will increase due to the new factory lease. (Graphex Group Limited) — medium confidence, target: 2025-01-10
• The company's operating expenses will rise due to lease payments. (Graphex Group Limited) — high confidence, target: 2024-04-10

FAQ

Filing Documents

• form6-k.htm (6-K) — 28KB
• ex99-1.htm (EX-99.1) — 79KB
• ex99-1_001.jpg (GRAPHIC) — 16KB
• 0001493152-24-001961.txt ( ) — 130KB

Signatures

Signatures 2 Exhibit Index 3 Entry into a Material Agreement Graphex Group Limited (NYSE American: GRFX | HKSE: 6128). Graphex Group Limited (the “Company” or “we”) is an issuer with its ordinary shares listed on The Stock Exchange of Hong Kong Limited (“HKSE”). Under the Rules Governing the Listing of Securities on the HKSE (“Listing Rules”), we are required to publish an announcement (the “Announcement”) regarding the entry by the Company of a material agreement. On 10 January 2024, an indirect wholly-owned subsidiary of the Company (the “Tenant”), and the lessor of certain property (“Landlord”) entered into the agreement (the “Lease Agreement”) in respect of the lease of Factory Buildings located in Laixi City, Shandong Province, PRC for an aggregate term of 10 years made up of an initial term of 5 years and a subsequent term of 5 years which shall be extended automatically after expiry of the initial term. Pursuant to IFRS 16, the entering into the Lease Agreement as tenant will require the Group to recognise the Factory Buildings as the right-of-use assets on its balance sheet, thus the Lease Agreement and the transaction contemplated thereunder will be regarded as an acquisition of asset by the Group under the Listing Rules. As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the consideration for the acquisition of the right-of-use assets recognized by the Group pursuant to IFRS 16 is more than 5% but less than 25%, the entering into the Lease Agreement constitutes a disclosable transaction for the Company, and is subject to the reporting and announcement requirements but is exempted from the circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules. The terms of the Lease Agreement provided above are not complete and subject to the terms set forth on the Announcement th

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GRAPHEX GROUP LIMTED By: /s/ Andross Chan Andross Chan Chief Executive Officer Date: January 10, 2024 2 EXHIBIT INDEX Exhibit No. Exhibit 99.1 Announcement by the Company Regarding Disclosable Transaction In Relation To The Leasing Of Factory Buildings (English Translation) 3

View Full Filing

View this 6-K filing on SEC EDGAR