Opening of Regional Distribution Centre

China Chaintek United Co., Ltd

("Chaintek" or the "Group")

Opening of Regional Distribution Centre

Chaintek (AIM: CTEK), the provider of logistics services to manufacturers of consumer goods in China, announces that the Group has entered into an agreement to lease a Regional Distribution Centre ("RDC") in Changsha, the capital of Hunan Province in South-Central China.

The opening of this strategically located RDC, as outlined in the Group's AGM trading update issued on 8 May 2015, will further progress the Group's aim of becoming a national logistics company within the PRC while servings its customers' needs. With the increasing cost of land and labour around the coastal regions of China, as well as workforces returning to Central China, a number of shoe and apparel companies are considering the relocation of their manufacturing operations to cheaper regions inland. Chaintek is therefore pursuing a strategy to be able to provide for its customers in these more centrally located regions.

The 13,500m2 RDC in Changsha will initially be used to service Guangzhou ShengYu Footwear Ltd (Brand name: Josiny), which has also signed a two year warehouse service contract with Chaintek. The cost of the RDC is expected to be significantly lower than either of the existing Guangzhou and Hangzhou warehouses and the leasing period runs for an initial two year period to 13 May 2017.

Xu Meijin, Chief Executive Officer of Chaintek, said: "We aim to serve our customers' needs and the opening of this strategically located RDC allows Chaintek to be one step ahead of our key customers. The two year lease agreement gives us the flexibility to evaluate the strategic positioning of the RDC while creating a footprint in a new manufacturing centre."

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