Trading Update

29 January 2016

GTS Chemical Holdings plc

("GTS" or the "Company" or the "Group")

Trading Update

Unaudited Group revenue up 32% in 2015 to almost £100m

Expected increase in the full year dividend

GTS Chemical Holdings plc (AIM: GTS), the specialty chemicals and lubricating oil producer, and China's largest producer of ammonium sulfite, reports to the market today following continued strong growth for the financial year ended 31 December 2015.

Highlights:

· Unaudited Group revenue for the year ended 31 December 2015 up 32% to RMB 929.2 million (2014: RMB 704.6 million)

· Speciality Chemicals revenue up 30%; Lubricant Oils up 52%

· Gross margin remains steady

· New, higher capacity specialty chemicals production line commissioned in January 2016

· American Petroleum Institute approval now expected by end of the first quarter 2016

· The Company reiterates its desire to pursue a progressive dividend policy by intending to recommend an increase in the full year dividend

Segmental Sales Analysis

Specialty Chemicals

With revenue of RMB 656.6 million the Group's Specialty Chemicals division grew by 30%. In addition to strong growth from its major customers, during the year GTS has more than doubled its distribution network to 62 distributors increasing its geographic reach to smaller customers and widening the end uses it serves. A new liquid production line was completed and commissioned in January 2016 and during 2015 major upgrades were made to two solid production lines and two liquid ones. This will not only increase our capacity, but will serve to increase the quality of our products and the efficiency of our process enabling us to meet the demands in particular of Tralin Paper, our largest customer.

Lubricant Oils

The Lubricant Oils division continues to be successful with revenue growth of 52% to RMB 211.1 million in the year, representing 22.7% of total revenue, up from 19.7% in 2014. This division continues to exceed expectations and we believe that it will continue to grow at a faster rate than the larger Specialty Chemicals Division. An additional lubricant oil production line was added during the year which has allowed for the continued expansion of the division. The number of distributors has been increased from 48 to 76 within the year and we are now concentrating more on supporting our existing distributors to increase their sales.

Recarburizer

Consistent with our strategy, Recarburizer sales were flat in the year and represents an increasingly smaller percentage of our total sales amounting to just 6.6% in 2015. It does however generate a good margin and is a positive contribution to Group profits without the need for capital investment.

Dividend

Consistent with the Company's progressive dividend policy, the Board intends to recommend increasing the full year dividend, which will reflect our increased profitability whilst seeking to ensure that we are able to continue to invest in growth. Further details will be provided upon publication of the Company's full year report and accounts.

Group Chief Executive, Mr Cheung Liu stated:

"We have been a public company for 18 months and during that time, despite lower growth in the domestic economy, we have shown growth in every quarter and 2015 revenue has exceeded expectations. By concentrating on managing costs as well as on increasing turnover, I am happy to report that margins have remained steady. As a result, I am delighted to report that we expect to announce, at the time we publish our annual audited results, an increase in the full year dividend, which will reflect our increased profitability whilst seeking to ensure that we are able to continue to invest in growth. I would like to thank our employees and shareholders for their continued support."

Enquiries:

About GTS Chemical Holdings plc

GTS is the largest Chinese producer of ammonium sulfite, a specialty chemical used in the paper, chemical engineering, food and pharmaceutical industries. GTS is also the second largest producer of ammonium bisulfite, a preservative and reducing agent used in the petroleum drilling, water treatment and chemical engineering industries. The manufacturing of these two specialty chemicals comprises the Group's core business segment, Specialty Chemicals. This division manufactures its high quality products mainly from recycled waste materials. Additionally, GTS has a rapidly growing lubricant oil division, which services the automotive and industrial markets. Trading in recarburizer is its third division, which accounts for less than 10% of Group revenue.

The Group is located in Shandong Province, one of the largest provinces in China, ranked by GDP, and an area rich in downstream industries. GTS' location also means it is close to several chemical plants and paper factories, which gives it a distinct advantage over its competitors.

The Company is exposed to structural growth in the paper industry and chemicals sector, and market research estimates that from 2014 to 2020, China's demand for ammonium sulfite, led by the paper industry, is set to grow at an annual compound growth rate of 12%. The Company's two main divisions continue to benefit from government backed environmental changes that are currently taking place in China. GTS' biggest product, ammonium sulfite, is in increasing demand as the production of paper from straw continues to grow. The Company believes that the increase in production of paper from straw will continue to exceed the overall increase in demand for paper in China as smaller, less environmentally friendly, producers leave the market.

The Group has a history of strong profit growth and consistently high operating margins.