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Chairman's Message

Dear Shareholders,

As we reflect on the year under review, it is evident that Qian Hu has reached an important inflection point. 2025 was not defined by a single breakthrough or growth figure, but by a series of deliberate decisions that have sharpened our direction for our next phase of development and growth.

Last year, I spoke about the need for discipline, diversification and long-term thinking amid an increasingly uncertain operating environment. Those priorities remain unchanged. What has evolved is the clarity with which we now see where Qian Hu's strengths lie - across aquaculture, sustainable technologies, ornamental fish, and pet care solutions that are increasingly science-led and purpose-driven.

Our theme “Purpose, Progress, Performance” reflects how we invest, innovate and execute across our businesses. These concepts are deeply interconnected. Purpose is shaped by what we do and our intent.

Progress determines how effectively we adapt. Performance reflects the outcomes of those choices over time.

In FY 2025, the Group recorded a modest increase in overall revenue amid a mixed and uneven operating backdrop. While demand in certain segments remained resilient, overall performance for the year was shaped by the absence of a one-off compensation income recognised in FY 2024, as well as fair value movements on certain financial assets. As a result, the Group reported a net loss for the year. Notwithstanding this, our underlying operations remained stable and our working capital position continues to be healthy, providing a solid foundation as we position the Group for its next phase of development.

Building Meaningful, Sustainable Value

Qian Hu's purpose has always been rooted in bringing joy and connection, whether by bringing healthy aquatic produce to the table, rearing ornamental fish, or caring for pets as part of the family. Over time, our purpose has expanded to include a deeper responsibility to operate more sustainably to support healthier ecosystems and deliver solutions that are relevant to how people live today.

In aquaculture, this purpose is increasingly clear. Traditional farming methods alone are no longer sufficient today. Labour constraints, disease risks, traceability demands and climate volatility have accelerated the shift toward indoor, smart and technology-enabled farming systems.

Therefore, our decision to take over Aquaeasy marks a significant milestone in our ongoing journey to transform aquaculture through technology-driven solutions. The move also aligns with Qian Hu's strategic objectives to strengthen our presence in this sector by leveraging cutting-edge AI, IoT technologies, and digital farm management systems.

Having invested in Aquaeasy since December 2021, it was a natural progression when the opportunity arose for Qian Hu to acquire the business this year. Over the past few years, we have actively supported the development of Aquaeasy's customer pipeline, and facilitated the implementation of its solutions across various farming environments.

Given our longstanding involvement and shared vision for sustainable aquaculture, Qian Hu is well-positioned to take the business forward. With greater flexibility and control over overall operations and execution, this will enable us to accelerate innovation, scale adoption and deliver enhanced value to our stakeholders.

This acquisition represents a new business pillar for the Group. Through Aquaeasy, we aim to deepen our presence across Southeast Asia, beginning with Indonesia, Malaysia and Thailand, while building scalable service-based revenue streams beyond traditional farming.

Our purpose also extends to our Accessories segment. Over the past year, we advanced our AMT applications for pets, guided by the fundamental belief that caring for pets should be safe, science-based and environmentally responsible.

"Pet-related products continue to account for a significant share of our Accessories revenue, supported by shifting demand patterns as consumers prioritise essentials such as food, litter and healthcare products for their furry companions."

This belief underpins our “Natureal” range, which incorporates slow-release AMT to provide longer-lasting protection without harsh residues. Heavy chemicals may deliver short-term effects, but they are toxic to pets, families and the environment. Natureal's 100% food-grade, non-toxic formula powered by Vikang^TM technology, breaks down pet odours and residue such as drool, while killing 99.9% of bacteria and viruses naturally.

Progressing Through Innovation and Regional Expansion

In FY 2025, our progress at Qian Hu has been deliberate. As global demand remained uneven and markets faced price pressures, we focused on strengthening operational capabilities and expanding our product breadth.

Singapore's position as a global exporter of Ornamental Fish has softened in recent years, reflecting broader behavioural and structural shifts in the post-Covid environment. In response, we redeployed resources by converting our existing Arowana facilities to breed bread-and-butter species, including a greater focus on higher-value Albino varieties.

We also continued deploying additional ART systems across our farms, with 12 systems in place to enhance breeding efficiency, consistency and husbandry standards. Our research and breeding programmes also continue across 15 ornamental fish species to maintain differentiation and quality leadership.

In our Aquaculture business, we strengthened our operational capabilities through the use of RAS. This has supported the expansion of our seafood range to include lobsters, abalone and oysters for distribution to restaurants. In parallel, we expanded contract farming in Malaysia to ensure supply continuity for our operations.

We are also preparing to adopt Aquaeasy systems within our own farms to enhance traceability, particularly for shrimp farming. As consumers and regulators demand greater transparency, digital traceability will become a baseline requirement rather than a differentiator.

Progress is also evident in our joint ventures and partnerships. Working with the Singapore Agro-Food Enterprises Federation, we are aggregating the supply of Vannamei shrimp from 'kelongs' and small farmers so as to help address market access challenges, while promoting local produce.

Our collaboration with Liyang Aquatic in Malaysia expands our offerings into fish diagnostics, probiotics and aquaculture medication. The launch of our first on-site diagnostic service with Polymerase Chain Reaction ("PCR") testing for aquatic diseases ensures accurate diagnosis of diseases by identifying specific pathogens.

With this, Qian Hu is bringing higher-value, service-led capabilities closer to farmers, particularly in key farming regions such as Perak, Malaysia. This integrated ecosystem approach reflects where aquaculture is heading - with tangible and sustainable solutions, rather than just focusing on supply alone.

Strengthening Foundations for Sustainable Returns

Our Ornamental Fish exports showed signs of recovery in selected markets, with the United States remaining a key destination despite tariff-related headwinds. Malaysia and Indonesia continue to offer long-term growth potential, supported by favourable policies and cost structures. However, even as the Ornamental Fish segment remains our largest contributor, growth has moderated in line with global trends.

Pet-related products continue to account for a significant share of our Accessories revenue, supported by shifting demand patterns as consumers prioritise essentials such as food, litter and healthcare products for their furry companions.

Encouragingly, the launch of our new pet products provides an additional performance lever. With six new “Natureal” products, early feedback has been positive as our products have demonstrated real benefits such as extended litter usage cycles without odour. We have started distribution in Singapore, Malaysia, Thailand and Indonesia, and are actively marketing the brand at regional exhibitions. While we remain disciplined in pacing expansion, initial overseas interest from markets such as Taiwan and the Philippines is encouraging.

Looking ahead, we are also exploring AMT applications in biodegradable, food-grade plastics, with the potential to extend shelf life for perishables, aligning with both our sustainability and commercial objectives.

Appreciation & Looking Forward

On behalf of the Board, I would like to express our sincere appreciation to Ms Lai Chin Yee for her dedication and invaluable contributions to Qian Hu over the past 25 years. Ms Lai has relinquished her appointments as Finance Director and Company Secretary with effect from 31 January 2026.

She joined Qian Hu in May 2000 and played a pivotal role in the Company's successful listing on the Singapore Exchange, as well as in strengthening the Group's financial management, corporate reporting and governance frameworks.

Her leadership underpinned consistently high standards of disclosure, contributing to multiple Best Annual Report awards and her recognition as Chief Financial Officer of the Year at the Singapore Corporate Awards in 2009.

Her dedication, professionalism, steady counsel and long-standing service have been deeply valued by the Board and management.

I would also like to thank the Board, our employees, partners and shareholders for their continued trust in FY 2025. While challenges persist in the broader environment, we are cautiously optimistic that our investments in technology, services and essential pet products will continue to strengthen over time. We will continue to move forward with prudence, focus and a long-term perspective as we navigate the path ahead.