Chairman's Message

Dear Shareholders,

2024 was a year marked by steady progress, strategic growth and relentless innovation across Qian Hu’s key business segments.

With a sharpened focus and resolve, we have intensified efforts across our business units and expanded into new markets, while leveraging innovation for sustained growth. This builds on our strong foundation, signalling a fresh chapter in our leadership as I take on the new role of Chairman this year while I continue to steer Qian Hu as CEO.

EXPANDING STRATEGICALLY IN KEY MARKETS

With our established presence in China, Malaysia and Thailand, we plan to grow our position as a regional aquaculture player to capture the growing demand for the highly popular Marble Goby fish and other antibioticfree edible seafood products.

This year, we expanded our aquaculture footprint in the region by incorporating a 70%-owned subsidiary, Qian Hu Aquaculture (M) Sdn. Bhd. – to focus on farming and distributing of aquaculture products in Malaysia. In addition to our current farm in the Hainan Province which farms Humpback Groupers, Coral Trout and Marble Goby, our new Malaysian venture is well positioned to supply Marble Goby to the growing banquet and restaurant sectors in this region.

Given that it takes one year for the Marble Goby to grow to full table size, we have also started the spawning process at our Thailand farm to further increase the Group’s supply. We expect these new ventures will boost our market penetration efforts by broadening our distribution network. Meanwhile, we continue to work with our contract farming partners in Malaysia to produce Vannamei shrimp.

We have also identified the pet accessories segment as a key growth pillar and are turning our attention to Indonesia as a market with huge potential in this segment. This is fuelled mainly by an increasing pet ownership rate leading to rising demand for premium pet products and services, spurred by the growing trend of pet cafes and pet-friendly establishments, as well as higher disposable income of the Indonesian middle-class. As such, we are in the process of establishing a new pet distribution arm there to capitalise on this trend, as part of our strategy to bring our pet accessories products to such larger and more diverse markets in the coming years.

Furthermore, we have acquired a 3,800 square-meter freehold property in Selangor, Malaysia to consolidate our wholesale and distribution operations from our current leasehold premises. This acquisition aligns with our longer-term plans to expand our pet accessories business in Malaysia. We expect this acquisition to allow greater control over our commercial space and potential long-term cost savings, further enhancing our operational synergies and improving overall efficiencies.

STRENGTHENING CORE OPERATIONS AND FINANCIALS

Our mainstay, the Ornamental Fish segment, has performed steadily despite challenging market conditions. Europe, one of our largest markets, has been impacted by rising costs due to the ongoing geopolitical conflicts, affecting consumer spending and confidence. In contrast, demand in Asia remains relatively stable.

Sales of ornamental fish saw stable growth this year, primarily driven by basic varieties such as goldfish, tetras, platy and gourami. In particular, we are seeing this shift in consumer preferences especially in larger markets such as Europe, USA, Japan and Australia.

We are armed and ready to explore new possibilities in this sector, having expanded on our use of the land-based Aqua-Ring Technology (“ART”) systems, with 8 additional sets added to our arsenal this year. We intend to scale up our efforts to breed new varieties of ornamental fish in Singapore and further enhance our production capacity. Meanwhile, we continue to produce premium Arowana such as the Albino Asian varieties.

This year, Qian Hu has laid the groundwork for new offerings and the pursuit of fresh growth opportunities that will allow us to penetrate key markets such as Malaysia and Indonesia. Even as we shore up efforts to seek out new depths of opportunity, we remain committed to maintaining a solid financial foundation.

Over the past years, we have substantially pared down our bank borrowings from the height of $18.5 million to $4.5 million. As at 31 December 2024, the Group is in a strong cash position with $14.6 million in cash and cash equivalents. This prudent approach allows us to shore up our war chest and to pursue new growth opportunities with confidence.

NURTURING GROWTH THROUGH PIONEERING AGRI-TECHNOLOGY SOLUTIONS

Our vision for the future is grounded in sustainability and innovation. From water sustainability initiatives to exploring artificial intelligence, we are committed to embedding these principles in every facet of our operations.

Using a land-based tank with zero discharge such as the ART system is ideal for our intensive breeding of freshwater and marine species, offering improved biosecurity and resilience against climate-related risks. Through strategic partnerships such as with AquaEasy Pte Ltd, Qian Hu deploys AI and IoT-based solutions to optimise aquaculture farming, enhancing productivity and reducing costs. These initiatives, including the growing adoption of AquaEasy’s solutions in Malaysia, Thailand and upcoming plans for China, support our expansion and sustainability goals while contributing to Singapore’s “30 by 30” food security target.

This year, we are thrilled to be teaming up with N&E Innovations Pte Ltd, a Singapore-based biotech company with a track record of turning ideas into impactful solutions. Together, we are reimagining possibilities in pet care by harnessing the power of antimicrobial technology (“AMT”) – a biodegradable, food-based solution derived from fruit waste. Unlike conventional agents such as nano silver, sodium bicarbonate and alcohol which can irritate pets’ skin and harm the planet, AMT is not only biodegradable but is also approved for human consumption. In the coming year, we plan to launch an AMT-based pet product line comprising of cat litters, wet wipes, anti-odour sprays and other related products using this sustainable technology.

Beyond this, we also see immense potential to expand the AMT into other business areas, such as biodegradable plastic materials used for food packaging – further embedding sustainability into everything we do.

As we chart these new depths, we do so with a focus on building a more sustainable, resilient and innovative business by staying true to R&D, financial discipline and environmental responsibility. With these strategic plans in place, we are confident that Qian Hu’s next chapter will be marked by new opportunities and greater growth.

APPRECIATING OUR VALUED TEAM & STAKEHOLDERS

Resilience is truly a good representation of the endearing spirit we have shown in the past two decades. It shows our ability to recover in difficult times and look ahead towards our goals and vision as we explore fresh frontiers in 2025 and beyond.

Our team has worked extremely hard in navigating Qian Hu through a challenging but rewarding year. I would like to extend my heartfelt appreciation to the Board of Directors, our Advisor, Mr Kenny Yap, who has agreed to stay on the Board to offer invaluable guidance and strategic input as a founding member of Qian Hu; as well as our business partners, customers, employees and stakeholders. Your steadfast support has been instrumental in positioning Qian Hu for the next lap.

Thank you for your continued belief as we set out on the next phase of this exciting journey together!