Business Model

Qian Hu is an integrated "one-stop" ornamental fish service provider with business activities ranging from breeding of Dragon Fish, farming, importing, exporting to distributing of ornamental fish as well as distribution of aquarium and pet accessories to local and overseas customers.

Currently, Qian Hu has presence in seven countries, namely, Singapore, Malaysia, Thailand, Indonesia, China, United Kingdom and India, which consists of ten subsidiaries and two associates (collectively known as "the Group").

The Group has three main business activities - Ornamental Fish, Accessories and Plastics. For the financial year ended 31 December 2011, the Group recorded revenue of $88.3 million, of which approximately 87% was contributed by the core businesses (Ornamental Fish and Accessories), while Plastics contributed the remaining 13%. The Ornamental Fish business accounted for the bulk of the Group's operating profit at 45%, compared to 40% from Accessories and 15% by Plastics.

• The Group engages in the total ornamental fish process, which includes import, export, breeding, quarantine, conditioning, farming, wholesale and distribution activities. The Group imports ornamental fish from countries in Southeast Asia, South America and Africa. It currently exports over 1,000 species and varieties of ornamental fish directly to more than 80 countries as well as distributes to local retailers and exporters. The "Qian Hu" Dragon Fish is increasingly regarded as a premium brand in China.

• The distribution of accessories complements the ornamental fish operations by providing a "one-stop" shop to meet customers' aquarium needs. The Group distributes more than 3,000 types of aquarium and pet accessories for more than 30 major manufacturers and principals to retailers in mainly Asia and Singapore, including supermarkets operated by NTUC FairPrice, Cold Storage and Carrefour. The export of aquarium and pet accessories has seen a healthy momentum of growth. Currently, the Group exports its accessories products to approximately 40 countries around the world.
  
  Over the years, the Group has developed its proprietary brands of aquarium and pet accessories under the name "Ocean Free", "OF", "Classica", "Aqua Zonic", "Delikate", "BARK" and "Aristo-cats YI HU". The Group have a factory in Chennai (India) dealing with the manufacture of fish food.
  
  In addition, since 2004, Qian Hu started penetrating the retail market with a chain store concept, "Qian Hu - The Pet Family", which it intends to professionalise a highly fragmented market to mass market a niche industry. Since then, it has opened 12 retail chain stores in China, Malaysia and Thailand. All the chain stores sell both ornamental fish and related aquarium & pet accessories while some stores also provide pet grooming activities.

• As an ancillary business, the Group manufactures plastic bags for its own use in the packing of ornamental fish for sale in a separate factory located in Woodlands. The plastic bags are also supplied to third parties in the ornamental fish, food and electronics industries.