China Chaintek United Co., Ltd E-commerce update and maiden dividend declaration (2884S)

TIDMCTEK

RNS Number : 2884S

China Chaintek United Co., Ltd

06 November 2013

 
 Press Release   6 November 2013

China Chaintek United Co., Ltd

("ChainTek" or the "Company")

E-commerce update

and maiden dividend declaration

ChainTek (AIM: CTEK), the provider of logistics services to manufacturers of consumer goods in China, is pleased to provide the following update on its operations in the e-commerce sector, as well as announcing the Company's maiden dividend declaration.

The Company announces today that its logistics services business has become a Designated Service Provider for VIPshop, one of China's leading online discount retailers for brands. VIPshop is quoted on the NYSE (NYSE:VIPS). This follows a stringent selection process, in which ChainTek demonstrated its transportation service network, wealth of operational experience and strong transport operational management capabilities. ChainTek may now be called to provide VIPshop with Just In Time delivery services enabling VIPshop's suppliers to deliver goods efficiently from their manufacturing facilities in Jinjiang to VIPshop's regional operation centres.

In ChainTek's inventory solution services business, the Company is actively promoting its Vendor Managed Inventory model with VIPshop which aims to provide value added inventory solutions services at VIPshop's Regional Distribution Centres ("RDC").

The Board believes that ChainTek's offering of both logistics services and inventory solutions services, as well as its long standing relationships with major brands in the Jinjiang region, position the Group well for further growth as part of the e-commerce businesses of its clients. The Group looks forward to further developing this aspect of the business.

Maiden dividend declaration

The Board is pleased with the progress that has been made, particularly in the logistics services division targeting China's major e-commerce companies. As a result of the Board's confidence in the growth prospects of the Company, Chaintek is pleased to announce today an interim dividend of 2 pence net per share, in respect of the six month period ended 30 June 2013, payable on 27 December 2013 to shareholders on the register on 13 December 2013.

The Company remains keen to reinvest its strong organic cash flow from existing operations into building the Logistics Park in an industrial zone in Jinjiang, which the Board expects to deliver shareholder value following the commencement of the operations for the Logistics Park currently anticipated in 2016. The directors of Chaintek recognise, however, the importance of a cash dividend to certain shareholders and potential investors and have therefore decided to commence an initially modest and progressive dividend policy. In the future the Board intends to declare dividends, subject to it being prudent to do so, with the financial results twice a year with the next dividend declaration expected with the final results announcement for the current year. The Board envisages that payments will be weighted toward the final dividend.

The interim dividend will be in the form of a scrip issue of shares based on the average closing price of the shares on the five days following the ex dividend date. There will be a cash alternative for shareholders who so elect. Elections for cash must be made before 20 December 2013.

Odylink Limited and Golden Plan Development, both shareholders connected with the Executive directors of the Company, and eligible to receive shares pursuant to the scrip issue have irrevocably instructed the Company not to issue any shares to them pursuant to the scrip issue to the extent that they would thereby increase their respective percentage of voting rights in the Company's issued share capital.

A Circular will be sent to shareholders detailing the process, timing and mechanism for election in due course.

Xu Meijin, Chief Executive Officer of ChainTek, said: "We are making excellent progress in our strategy of providing some of China's leading online retailers with logistics and inventory solutions services. The agreement with VIPshop demonstrates the Group's success in establishing new e-commerce business relationships.

"The Board is pleased to announce our maiden interim dividend, which illustrates our confidence in the Company's strong prospects for future growth."

- 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 
 
 Daniel Stewart & Co 
 Paul Shackleton / James Thomas       +44 (0) 20 7776 6550 
 
 Abchurch Communications 
 Henry Harrison-Topham / Joanne 
  Shears                              +44 (0) 20 7398 7702 
 henry.ht@abchurch-group.com        www.abchurch-group.com

Notes to editors:

VIPshop

VIPshop (NYSE: VIPS) is one of China's leading online discount retailers for brands. It offers high quality and popular branded products to consumers throughout China at a significant discount from retail prices. By providing special offers and deep discounts on branded products, VIPshop has pioneered the online discount retail model in China and has become an expert and leader trusted by customers and brand partners alike. Since its founding in August 2008, VIPshop has built a sizeable and growing base of customers and brand partners. As of 31 December 2012, VIPshop had approximately 4.9 million cumulative customers and partnerships with over 5,800 domestic and international brands.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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