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 positive trading update ahead of the Group's Interim Results for the six months ended 30 June 2014, which will be announced in late September 2014. Financial information contained in this announcement for the six months period is unaudited.

The Board is pleased to confirm that trading for the period is in line with management's expectations with revenues of approximately RMB173.8 million (£16.4 million), which represents a 4% increase to the comparable period in 2013. Of this, the logistics services business represented approximately RMB149.1 million (£14.1 million), with the inventory solutions business accounting for approximately RMB24.7 million (£2.3 million).

Profit before tax shows an increase of more than 9% when compared to the prior year at RMB144.7million (H1 2013: RMB132.8million) with the Group maintaining a strong profit margin of 83% (H1 2013: 79%). The Group continues to be cash-generative, resulting in a cash position at the half year of RMB411.6 million (H1 2013: RMB249.1 million).

Since the start of the year, the Group has added six new customers to its logistics services business (covering sectors including shoes and apparel, food, building materials, textile and trading) of which, Joeone, a Shanghai Stock Exchange listed shoes and apparel manufacturer is considered by the Group to be a significant customer, contributing approximately 3% to the Group's logistics services revenue. In addition, the Group has further increased its load tonnage in the period by 3% to 1.25 million tons (H1 2013: 1.21 million tons).

On 7 April 2014, as part of the Group's intention to maintain a progressive dividend policy, a final dividend of 4 pence per share, in respect of the year ended 31 December 2013 was announced. This was paid on 9 June 2014 to shareholders on the register on 21 May 2014 and also offered as a scrip dividend with a cash alternative.

As previously outlined, the management team remain focused on the planned strategy for growth and construction of the new Logistics Park, which is anticipated to commence in Q4 2014. The Group is still negotiating with the local government to obtain the preferential policy for the new Logistics Park; this could result in a 20-30% rebate on the land price paid to the government. Due to structural governmental changes in China, since 2013 and the formation of new government bodies, negotiations are taking longer to complete and may cause delays to the commencement of the construction on the new Logistics Park. The Group will update the market upon the conclusion of these negotiations.

Xu Meijin, Chief Executive Officer of Chaintek, said: "The Board is pleased with the strong progress that the Group has made in the first half of the financial year, which has been in line with management expectations. The expanding e-commerce activities in China and the relatively undeveloped logistics market represent strong growth opportunities for Chaintek.

"As a local modernised logistics firm, Chaintek anticipates to benefit from the Chinese government's policy to develop the logistic sector. The construction of our new Logistics Park represents an important milestone for the Company in providing an integrated service to our customers, which will help the Group to further strengthen its market share."

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