Trading Update

China ChaintekUnited Co., Ltd

("Chaintek" 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. Financial information contained in this announcement for the nine month period ended 30 September 2014 is unaudited.

The Board is pleased to confirm that trading for the period is in line with market expectations with revenues of approximately RMB 281.5 million (£28 million*), which represents a 4.8% increase to the comparable period in 2013. Of this, the logistics services business represented approximately RMB 242 million (£24 million*), with the inventory solutions business accounting for approximately RMB 39.4 million (£4million*).

Profit before tax shows an increase of more than 3% when compared to the prior year at RMB 231.3 million (nine month period 2013: RMB 224.5 million) with the Group maintaining a strong profit margin of 82% (nine month period 2013: 83%).The Group continues to be highly cash-generative, resulting in a cash position of RMB 470.3 million as at 30 September 2014 (30 September 2013: RMB 309.7 million) up 52%.

The Board is also pleased to announce the purchase of a transit warehouse for the logistics services division. The facility is located near the Chaintek head office in Fujian Province and is within proximity of a number of factories belonging to Chaintek's major customers. The warehouse will cost RMB 75.8 million (£8million^) of which RMB 60 million (£6 million^) has already been paid to secure the facility. The outstanding balance of RMB15.8 million (£2million^) will be paid once the land use rights ("LUR") and other administrative procedures have been completed, which is expected to occur in Q1 2015. However, due to a clause in the purchase agreement, the ready to use facility could be utilised before December 31 2014.

The enlarged facility (19,650 m2) will help to resolve the capacity issue at the current transit warehouse (7,108 m2) whilst also allowing Chaintek to capture an anticipated increase in demand from the market. The acquisition represents a rare opportunity to acquire a ready to use, centrally located, enlarged facility at a reasonable price. Due to delays in obtaining the LUR for the logistics park, the need to capture more market share and competition to buy land, the Board acted swiftly in order to secure the new facility.

As previously outlined, the management team remain focused on the planned strategy for growth and construction of the new Logistics Park. The regional government of Fujian Province is currently evaluating ‎Chaintek's application to commence construction of the Logistics Park and for the Group to be granted a rebate in the region of 25-30 % on the land price the Group has paid to the government for the land use as a logistics park. The granting of a rebate is in accordance with government policy to encourage the growth and development of logistics companies in China. On receipt of the approvals, construction would commence without further delay.

Xu Meijin, Chief Executive Officer of Chaintek, said: "The Board is happy with the continued progress that Chaintek has made in 2014 and we remain confident about the future growth prospects for the Group.

"With construction at the Logistics Park unable to proceed until the government rebate has been received, we have in the interim period been successful in acquiring an enlarged transit warehouse. This centrally located facility enables us to keep on capturing market share without disrupting existing operations or high service levels to our current customers."

- Ends -

*Exchange rate: RMB 9.956 = approximately £1.00

^Exchange rate: RMB9.607 = approximately £1.00

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