Interim Results

China Chaintek United Co., Ltd

("ChainTek", the "Company" or the "Group")

Interim Results

ChainTek (AIM:CTEK), the provider of logistics services to manufacturers of consumer goods in China, today announces its interim results for the six months ended 30 June 2013 (the "period").

Financial Highlights

Operational Highlights

In the Logistics Services Division, significant progress has been made in diversifying the Group's customer base into new sectors, such as food and building materials. These new sectors accounted for 23% (H1 2012: 17%) of the division's revenues.

Since the beginning of 2013, ChainTek has continued to win new business in both the logistics service and inventory solutions segments. For the six months ended 30 June 2013, a total of 15 new customers have been added, with 14 in the logistics service business in Jinjiang City, covering the sectors of shoes and apparel, food, building materials and automobile parts, and one in the inventory solutions business in the shoe sector in a regional distribution centre ("RDC") in Guangzhou.

As previously announced, the Group intends to build a logistics park which will be located on a plot of land in an industrial zone in Jinjiang 14km from the Group's existing operational headquarters, and which already houses a number of ChainTek's existing key manufacturer customers. The Group is currently in discussions with the local government and the developer of the logistics park to acquire the Land Use Right over the plot of land and will satisfy the final condition of the acquisition when it pays the final tranche of the consideration. It is anticipated that this will occur in Q4 2013.

Commenting on the Interim Results, Shufang Zhuang, Executive Director and the Group's founder, said: "Trading since the year end has been in line with management's expectations and results for the six months ended 30 June 2013 are also in line with current market expectations. Total revenues for the period grew 6% compared to the same period in 2012, with profit before tax increasing by 9% to RMB133 million. In the Group's core Logistics Services Division we were pleased with the continued diversification of our customer base, building on our existing strength in the sports shoes and apparel sector and moving into growing markets such as food and building materials. The Inventory Solutions business has added one new customer and ended the period with six customers. The Board is pleased with the demand we are seeing for this division.

"ChainTek's cash position at 30 June 2013 was RMB249 million and the Group is well positioned to benefit from the Chinese economy's need for efficient domestic logistics services as it switches to a model of increasing investment and internal consumption. ChainTek's core business is strengthening and the Board looks forward with confidence to offering increased value and service to our varied customer base."

- Ends -

For further information:

Chairman's Statement

It is with pleasure that I present to you the results of China Chaintek United Co., Ltd. for the six months ended 30 June 2013.

Financial Overview

The Group has continued to grow satisfactorily with revenues and profit before tax both in line with the Board's expectations. For the six months ended 30 June 2013, revenues amounted to RMB 167.7 million, which represents a 6% increase compared to the same period in 2012.

The Logistics Services Division, the Group's core business, represented 86% of total revenue. Sales have grown by 5% to RMB144.0 million and gross margin increased from 90% to 94%. Most encouraging has been the diversification of customers requiring logistics services with the Company achieving 14 new customers and 292 in total.

The Inventory Solution Division has also seen robust growth in the period. Revenues increased by 8% over H1 2012 to RMB23.7 million and gross margin grew from 47% to 52%. The number of customers of the Division increased to six during the period.

EBITDA for H1 2013 has increased by 9% to RMB135.8 million (H1 2012: RMB124.6 million). Profit for the period also increased 8% from RMB90.4 million for the six months ended 2012 to RMB97.9 million in the same period of 2013.

As at 30 June 2013, the Group had a net cash position of RMB249.1 million compared with RMB159.1 million as at 30 June 2012.

Business Review

The People's Republic of China ("PRC") is the second largest economy in the world with a GDP in 2012 of approximately RMB51.9 trillion, and the PRC is widely anticipated to become the world's largest economy overtaking the USA around 2016.

The PRC is also undergoing a structural economic shift from an economy fuelled by exports to one of investment and internal consumption. The rapid growth of domestic income in the PRC is driving consumption, especially in respect of food, consumer goods and health care. Such economic adjustments continue to increase demand for logistics services in the PRC. Logistics costs are relatively high in the PRC where they were estimated to represent approximately 18% of GDP in 2010, compared to less than 10% of GDP in Europe and the USA in the same year.

The size of the Chinese domestic logistics market as a whole is expected to double during the period of the PRC's "twelfth five-year plan", which ends in 2015. The continuing development of the PRC's logistics sector and the increase in operational efficiency is likely to further support and expedite the PRC's economic development. The logistics industry has become a growth driver for national economic development and is supported at government level.

In a Chinese Government White Paper Plan of Adjustment and Revitalisation of the Chinese Logistic Industry, published in 2009, the logistics industry was the only service industry listed in Government supported projects. Furthermore, in August 2011, the State Council, the PRC's cabinet, issued new guidelines to promote the development of the country's logistics industry. These guidelines include reduced taxation and land policies geared towards logistics enterprises.

In May 2013, the Chinese State Council issued new guidance notes on speeding up and improving logistics infrastructure across China, focused on developing nationwide logistics hardware facilities, reducing inappropriate road tolls, and constructing regional logistics centres. These new policies further demonstrate the government's support of the logistics industry as a whole in China. The Board believes these policies will be beneficial to the Group's business model in the long-term, as well as for the Group's near-term plan to construct a modern logistics park.

The Logistics Services Division of ChainTek has continued to grow and diversify its client base, particularly into the food and building materials industries which comprised 23% of total revenue during the period (H1 2012: 17%). The division continues to reduce its reliance on shoes and apparel, which now comprise 70% of revenue (H1 2012: 72%). In addition, with the sportswear and apparel industries in China moving up the value chain, the Board believes the trend to greater outsourcing is likely to continue.

The Inventory Solutions Division of the Group is focused on providing outsourced inventory storage and management services including sorting, packing, labelling and short-term storage. The division now accounts for 14% of Group revenues and, since its establishment in 2010, continues to grow in line with the Board's strategy and expectations. One new customer in the shoe sector in a regional distribution centre ("RDC") in Guangzhou has been added and there are now a total numbers of six customers in this division as at 30 June 2013. The Board believes that revenue from this division will see a material uplift once the new logistics park is completed and fully operational.

Outlook

The Board is pleased with the strong progress that has been made during the period. With the ongoing diversification and strengthening of the Group's customer base, the Chinese government's support for the logistics industry and the growth that will be driven by Chaintek's new logistics park, the Board views the future with confidence.

William Knight

Non-Executive Chairman

26 September 2013

Interim consolidated statement of financial position

(All amounts in RMB unless otherwise stated)

Interim consolidated statement of comprehensive income

(All amounts in RMB unless otherwise stated)

Interim consolidated statement of changes in equity

(All amounts in RMB unless otherwise stated)

Unaudited

Interim consolidated statement of cash flow

(All amounts in RMB unless otherwise stated)

1. General information

The Company was incorporated as an exempted limited liability company in the Cayman Islands on 13 April 2011 as a result of a group restructuring in preparation for the proposed listing of the Company's shares on the AIM market of the London Stock Exchange. The Company's registered office is at P.O. Box 1034, Grand Cayman KY1-1102, Cayman Islands. The Company's shares were admitted to trading on the AIM market of the London Stock Exchange on 20 August 2012.

The principal activities of the Company are those related to investment holding. The principal activities of the subsidiaries are logistics services and inventory solutions

These financial statements are the unaudited interim consolidated financial statements for the six-month period ended 30 June 2013(hereafter 'the interim period'). The interim financial statements have been approved for issue by the Board of Directors on 25 September 2013.

2. Historical information

On 3 March 2000, Fujian Xingtai Logistics Co., Ltd. ("Fujian Xingtai") was incorporated as a limited liability company in the People's Republic of China (the "PRC") controlled by Mr Shufang Zhuang (Mr Zhuang). The registered office is located at Mei Ling Industrial Park, Jinjiang City, Fujian Province, PRC.

On 5 March 2010, Fujian Xingtai became a wholly owned entity of Mr Zhuang and his wife Mrs Meijin Xu (Mrs Xu).

On 7 December 2010, Chaintek United Holdings Ltd ("Chaintek United") was incorporated as a limited liability company in Hong Kong SAR. Chaintek United, an investment holding company, has its registered office at Room 1613, 16F, Tai Yau Building, 181 Johnson Road, Wan Chai, Hong Kong SAR. Chaintek United is wholly owned by Mr Zhuang and Mrs Xu.

On 29 January 2011, Chaintek United acquired 100% of the equity interest of Fujian Xingtai for a purchase consideration of RMB10,204,100, fully paid in cash with an advance from Mrs Xu.

On 13 April 2011, the Company was incorporated in the Cayman Islands for the proposed listing of the Company's shares on the AIM market of the London Stock Exchange. The Company is majority owned and controlled by Mr Zhuang and Mrs Xu.

On 27 June 2011, the Company acquired 100% of the equity interest of Chaintek United for a purchase consideration of HK$10,000 based on the nominal issued share capital of Chaintek United.

The acquisitions of Fujian Xingtai by Chaintek United and Chaintek United by the Company were a combination of businesses under common control by Mr Zhuang and Mrs Xu. As a result, the Company accounted for the acquisitions in a manner similar to a pooling of interests.

3. Basis of preparation

The interim consolidated financial statements (the interim financial statements) are for the six months ended 30 June 2013 and are presented in Renminbi (RMB), which is the presentation currency of the Group and the functional currency of the principal operating subsidiaries of the Group. "The interim accounts have been prepared in accordance with recognition and measurement principles of IFRS as endorsed for use in the European Union using accounting policies that are expected to be applied in the full financial statement for the year ended 31 December 2013.

4. Significant accounting policies

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 December 2012. The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements.

5. Estimates

The preparation of the Interim Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and the disclosure of contingent liabilities at the date of the Interim Financial Statements. If in the future such estimates and assumptions, which are based on management's best judgments at the date of the Interim Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change.

6. Financial Risk Management

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2012.

7. Land use rights prepayments

8. Property, plant and equipment

9. Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its Ordinary Shares. Basic EPS is calculated by dividing the profit or loss attributable to Ordinary Shareholders of the Company by the number of Ordinary Shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to Ordinary Shareholders and the number of Ordinary Shares outstanding, adjusted for the effects of all dilutive potential Ordinary Shares, which comprise Warrants.

The prior year computation of basic and diluted earnings per share have been adjusted to take into account the subdivision of shares of US$1 par value to US$0.001 par value.

10. Operating segments

For management reporting purposes, the Group is organised into the following reportable operating segments:

Segment accounting policies are the same as the policies described above. Intra- and inter-segment transactions were carried out at terms agreed between the parties during the financial year. Intra- and inter-segment transactions were eliminated in preparing consolidated financial information.

Segment revenue and expense:

Segment revenue and expenses are the operating revenue and expenses reported in the Group's statement of comprehensive income that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.

Segment assets and liabilities:

Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Capital expenditure includes the total cost incurred to acquire plant and equipment directly attributable to the segment.

Group cash resources, financing activities and income taxes are managed on a group basis and are not allocated to operating segments. Unallocated assets comprise cash and cash equivalents. Unallocated liabilities comprise income tax payable.

The Group Chief Executive Officer ("Group CEO") monitors the operating results of its operating segments for the purpose of making decisions about resource allocation and performance assessment.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Group CEO.

Geographical information

The Group's operations are located in the PRC and all of the Group's revenue is derived from services provided to customers in the PRC. Hence, no analysis by geographical area of operations is provided.

Major customer

None of the customers accounted for more than 10% of the Group's total revenues for the 6 month periods ended 30 June 2012 and 2013, and for the year ended 31 December 2012.