Trading Update

China Chaintek United Co., Ltd

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

Trading Update

Chaintek (AIM: CTEK), the provider of logistics services to manufacturers of consumer goods in China, is pleased to provide the following trading update ahead of the Group's Preliminary Results for the year ended 31 December 2014, which will be announced on Monday, 16 March 2015.

Revenues for the period are expected to be RMB364 million, an increase of just under 4% over 2013 with unaudited profit before tax at RMB287 million anticipated to be a short 1% ahead of 2013, both slightly below market forecast. The Group continues to be highly cash-generative, resulting in an increased cash position at year-end of RMB 472.1 million, after payments in respect of the new transit warehouse facility of RMB 60 million (2013: RMB 319.3 million after payment of RMB 221.0 million in respect of the planned Logistics Park).

The Logistics Services business added six new customers, including Joeone, a Shanghai Stock Exchange listed men's business and casual wear manufacturer, which contributed approximately 1.76% to the division's total revenues. The division itself is expected to show a modest increase of 3.2% in revenues over 2013. The Group has maintained a diversified customer base in its Logistics Services division with the food and building materials industries comprising 23% (2013: 22%) of divisional revenue, shoes and apparel an unchanged 69%, and other categories 8% of divisional revenue.

The Inventory Solutions business is expected to show a 7.3% increase in revenues, despite no new distribution centre being added in the year. The division accounts for approximately 14% of Group revenues.

As announced on 9 December 2014, the Group has exchanged contracts for the purchase of another transit warehouse for the logistics services division, located near the Chaintek head office in Fujian Province and close to a number of factories belonging to Chaintek's major customers. This facility is expected over time to help resolve the capacity issue at Chaintek's current transit warehouse and to avoid increasingly stringent daytime travel restrictions on larger lorries used by the Group's third party transport carriers. Operations at the new facility have commenced, but divisional revenues are expected to remain broadly static during 2015 despite the increase in operational expense. In the longer term, the facility should allow the Group to capture an anticipated increase in demand from the market.

The Board is disappointed not to be able to report any progress in relation to the planned new Logistics Park. As previously reported, structural government changes in China, the formation of new government bodies and their effect on provincial policy mean that the Company is unable to say when the approval process will be completed.

In its Interim Results released on 22 September 2014, the Company announced an interim scrip dividend of 2 pence or a cash alternative of 1 pence per share. The Company expects to declare an unchanged final dividend of 4 pence per share, however, the constituent parts will be determined by the cash commitment incurred by the Group in implementing its growth plan.

Xu Meijin, Chief Executive Officer of Chaintek, said: "The Board is pleased with the continued progress that Chaintek has made in 2014, set against the Company's capacity constraints and the delayed 2015 Chinese New Year. The Group remains focused on expanding capacity and diversifying its customer base. The new transit warehouse facility will help alleviate capacity constraints and maintain the high standards of service that our customers expect. In the longer term, it will help position the Group to capture the anticipated increase in demand for modernised logistics services.

"We understand uncertainties surrounding the construction of the Logistics Park have been a major concern amongst our shareholders. The Group remains committed to progressing this and will keep the market informed as appropriate."

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