China Chaintek United Co., Ltd Trading Update (8589K)

TIDMCTEK

RNS Number : 8589K

China Chaintek United Co., Ltd

05 August 2013

 
 Press Release   5 August 2013

China Chaintek United 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 2013, which will be announced in late September 2013. 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 expected revenues of approximately RMB167 million (approximately GBP18 million), which represents a 6% increase to the comparable period in 2012. Of this, the logistics services business represented approximately RMB144 million (approximately GBP15 million), with the inventory solutions business accounting for approximately RMB23 million (approximately GBP3 million).

In line with ChainTek's stated strategy of diversifying its logistics services' client base, 30% of revenues in the period came from industries other than sport shoes and apparel, compared to 28% in the equivalent period in 2012. Since the start of the year, the Group has added fourteennew customers in its logistics services business (covering sectors including shoes and apparel, food, building materials and automobile parts) and one new customer in its inventory solutions business.

As previously announced on 19 March 2013, ChainTek intends to build a logistics park which will be located on a plot of land in an industrial zone in Jinjiang just 14km from the Group's existing operational headquarters, and which already houses a number of ChainTek's existing manufacturer customers. The Group has entered into agreements with the local government and the developer of the logistics park to acquire the Land Use Right over the plot of land and will satisfy the final condition of the acquisition when it pays the final tranche of the consideration, which it anticipates doing in October 2013.

In May 2013, the Chinese State Council issued new guidance notes on accelerating the improvement of logistics infrastructure across China, focused on developing nationwide logistics hardware facilities, reducing inappropriate road tolls, and constructing regional logistics centres. These new policies further demonstrate the Chinese government's support of the logistics industry as a whole in China. The Directors of ChainTek believe these policies will be beneficial to the Group's business model in the long term, as well as its near-term plan to construct a modern logistics park.

Xu Meijin, Chief Executive Officer of ChainTek, said: "The Board is pleased to report that trading across the Group's trading divisions is performing well and in line with our expectations. In the period, the Board has worked hard to diversify our client base in the logistics division and has successfully expanded into new sectors. The Board is also encouraged to see that the Chinese State Council is supporting the logistics industry by accelerating the improvement of infrastructure across the country, and is confident that this will further underpin the Group's long term strategy."

- Ends -

For further information:

 
 China Chaintek United Co., 
  Ltd 
 Zhining Xu (Investor Relations)        +44 (0) 7720570262 
                                             +65 9227 8485 
 Derrick Wong (Finance Director)         +86 159 8597 3034 
 
 ZAI Corporate Finance 
 Ray Zimmerman / Wei Wang             +44 (0) 207 060 2220 
 
 Liberum Capital 
 Steve Pearce / Tom Fyson / 
  Josh Hughes                         +44 (0) 20 3100 2000 
 
 Abchurch Communications 
 Henry Harrison-Topham / Joanne 
  Shears                              +44 (0) 20 7398 7702 
 henry.ht@abchurch-group.com        www.abchurch-group.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

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