DGAP-News: Decheng Technology AG: Group enters into negotiations with two potential acquisition targets

CORPORATE NEWS May 28, 2018

Decheng Technology AG: Group enters into negotiations with two potential acquisition targets

- 8.2 % sales increase in FY 2017 proves soundness of business model

- CEO ZHU: "We are looking for acquisition targets with the potential to strengthen our business and our prospects"

- Company will benefit from strong financial position

Cologne, May 28, 2018. Decheng Technology AG (ISIN: DE000A1YDDM9; German Securities Identification Number (WKN): A1YDDM; ticker symbol: 333), a Chinese manufacturer of polyurethane resin and additives, issues the following statement.

In fiscal year 2017, the Group recorded revenues of EUR 82.050.160, representing an increase of 8.2 % as compared to fiscal 2016, as well as an operating result (EBIT) amounting to EUR 26.038.082, representing an increase of 2.8 % as compared to fiscal 2016. Given the challenging market conditions with increasing raw materials prices, this solid growth proves not only the reliability, but also the soundness of its business model. Moreover, the new products recently introduced have met with positive customer response. For fiscal year 2018 the Board of Management currently expects a further increase in revenue and aims to increase gross profit.

In order to stay ahead and to establish a stable base for future growth, the Company not only relies on its own R&D - with the magnet absorption material introduced in 2017 and the new water-based PU for food packaging expected to be introduced during the course of 2018 -, but also on external growth. Hence the Company is constantly monitoring the market for possible acquisition targets in order to increase both product range and production capacity. The Board of Management has identified two potential acquisition targets and has entered into negotiations with them.

The Company's CEO, ZHU Xiaofang, commented: "In the past years we have met with a number of companies, both in China and in Europe, regarding potential collaborations or M&A transactions. We think the two companies we have entered into negotiations with, have the potential to improve Decheng Technology AG's long-term growth prospects. However, it is still early days and negotiations are ongoing. Thanks to our financial strength, we are in a good position. We will inform the capital markets immediately, once a result has been reached. If the projects should come to fruition, they will significantly strengthen the Group's position and will thus provide value for our shareholders."

CEO ZHU Xiaofang also clarified the position of the Board of Management regarding the German Holding: "Our business is based in China. The holding company in Germany provides management services to the subsidiaries. The subsidiary in China will provide ample financial support to the holding company in Germany."

"Like many of our shareholders, we are also disappointed with the performance of the share despite a sales increase of more than 8 % in fiscal year 2017. With our strong R&D capabilities, new products and possible acquisitions we are working hard to strengthen the Group's position. Unfortunately, this is not yet reflected in the share price. We are thus currently exploring several potential ways to improve the share price and will inform the capital markets accordingly, if decisions have been taken", said ZHU.

About Decheng Technology AG
Decheng Technology AG is occupied with the research, development and the production of polyurethane resin and additives that enhance and improve the product features of textiles, leather and electronic components. The production site is located in Quangang, Quanzhou City, Fujian Province, People's Republic of China. In fiscal year 2017, the Company achieved sales of EUR 82.1 million, an operating result of EUR 26.0 million and employed 115 persons. The shares of Decheng Technology AG are listed in the General Standard Segment of the Frankfurt Stock Exchange.