DANYANG, China, Nov. 27, 2018 /PRNewswire/ -- Delta Technology
Holdings Limited (Nasdaq: DELT) ("Delta" or the
"Company") announced that it plans to launch a tea shop
chain under the brand Mingyuntang in China as part of the Company's efforts to
explore new business lines outside of its specialty chemical
business. This business will be conducted via the Company's newly
formed subsidiary, Shanghai Mingyuntang Tea Limited which controls
Hunan Mingyuntang Brand Management Company. Management expects to
provide high-quality tea beverages via this new business unit.
The products of Mingyuntang are trendy tea drinks, baked breads,
cakes and desserts, etc., targeting China's new urban generation. The trendy tea
drinks will be developed based on a variety of teas, which are used
in beverages such as fresh milk tea, fruit tea and milk cap tea.
All of the Mingyuntang products will be focused on not only their
taste but also their aesthetic presentation and health
benefits.
Management expects Mingyuntang to gradually open stores in small
and medium-sized cities in China,
where more and more consumers are seeking satisfaction through
better taste in blended tea beverages. By offering tea beverages,
baked goods and tea-related gifts in a pleasant and comfortable
environment, we aim to attract China's younger generation aged between 20 to
40 who tend to pay more attention to their quality of life. This
group historically were not the target consumer group for
traditional Chinese tea products.
In 2017, as many as 500 million people in China were drinking tea-related beverages,
with most of the new converts being young people born in the 1980s
and 1990s, according to figures from the government-backed industry
group China Tea Marketing Association, which believes the most
popular tea drinks in future will be those mixed or blended with
fresh milk, cream and fruit.
We plan to fund this new line of business with funds we raised
in a private placement recently closed in which we raised
approximately USD$1.3 million. With
the funding in place, we plan to open 20 stores in 2019, with the
first twenty stores to be opened in Hunan as the core market. We expect to raise
additional funding via equity or debt financing and intend to add
40 new stores in 2020 and have a total of 120 stores across
China by 2021.
The stores we plan to open include flagship stores and general
stores. Flagship stores are designed to offer both drinks and
snacks which we envision to cover a floor area of 80-150 square
meters (about 860-1,615 square feet) each. Our general stores will
mainly offer drinks and we expect coverage of a smaller floor area
of 40-80 square meters (about 430-860 square feet) each.
In addition to physical stores, we plan to team up with
China's online food delivery
operators to allow consumers to order drinks and snacks through the
Internet. According to "China Restaurant and Cafeteria Report 2018"
issued by Meituan-Dianping, one of China's largest group buying websites for
consumer products and retail services, China's food delivery market has witnessed an
annual growth of more than 100% in each of the past four years. The
food delivery market has had more than 300 million active users,
and consumers between the ages of 20-30 contribute to two-thirds of
the daily 30 million orders.
We have identified the necessary resources for our new business,
including raw materials suppliers. We also identified the
potential store spaces for renting. We plan to establish a robust
personnel management system including recruitment, training and
competitive compensation. We expect everything ranging from the
stores' decoration and accessories to its product exhibitions will
be standardized to ensure the best consumer experience.
The board of directors of Delta has appointed Jiang Jun as general manager for the new
business. Mr. Jiang has a decade of experience in marketing. Before
joining us, he served as general manager for a company in the
online commerce industry.
About Delta Technology Holdings
Founded in 2007, Delta is a fast-growing, leading supplier of
fine and specialty chemical products based in China's eastern city of Danyang. The company
produces and distributes pharmaceutical, agrochemical, dye
intermediate and advanced chemical materials widely used in
automotives, aerospace, ceramics, coating-printing and food
additives. The company has approximately 300 employees, 25% of whom
are highly-qualified experts and technical personnel. The company
serves more than 380 clients in various industries. Also, our
business covers the chemical commodities trading.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements are subject to known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Statements preceded or followed by
or that otherwise include the words "believes," "expects,"
"anticipates," "intends," "projects," "estimates," "plans," and
similar expressions or future or conditional verbs such as "will",
"should", "would", "may" and "could" are generally forward-looking
in nature and not historical facts. Forward-looking statements in
this release also include statements about business and economic
trends. Investors should also consider the areas of risk described
under the heading "Forward-Looking Statements" and those factors
captioned as "Risk Factors" in Delta's periodic reports under the
Securities Exchange Act of 1934, as amended, or in connection with
any forward-looking statements that may be made by Delta.
Contact Information
Delta Technology Holdings Ltd.
Long Yi, Chief Executive Officer
Phone: +86 511-8673-3102 (China)
Email: yl@deltath.com
INVESTOR RELATIONS
Brian Zhang, Investor Relations
Manager
Phone: +86 511-8673-3102 (China)
Email: zwy@deltath.com
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SOURCE Delta Technology Holdings Limited
