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News

First Quarter Financial Statement Announcement

The Board of Directors of Qian Hu Corporation Limited is pleased to announce the results of the Group and of the Company for the three months ended 31 March 2002.
These figures have not been audited.

-	-	Group			Company
--	--	S$'000		%	S$'000		%
-	-	31/3/02	31/03/01	Change	31/3/02	31/3/01	Change
1.(a)	Turnover	12,528	9,381	33.6%	10,313	7,805	32.1%
1.(b)	Investment income	0	0	0	0	0	0
1.(c)	Other income including interest income	1	2	(50.0%)	0	2	(100.0%)
2.(a)	Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	1,776	1,016	74.8%	1,430	1,067	34.0%
2.(b)(i)	Interest on borrowings	(27)	(17)	58.8%	(25)	(13)	92.3%
2.(b)(ii)	Depreciation and amortisation	(344)	(270)	27.4%	(208)	(194)	7.2%
2.(b)(iii)	Foreign exchange gain/(loss)	1	32	(96.9%)	0	11	(100.0%)
2.(c)	Exceptional items	0	0	0	0	0	0
2.(d)	Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	1,406	761	84.8%	1,197	871	37.4%
2.(e)	Income derived from associated companies	5	5	0%	0	0	0
2.(f)	Less income tax	(380)	(215)	76.7%	(280)	(180)	55.6%
2.(g)(i)	Operating profit after tax before deducting minority interests	1,031	551	87.1%	917	691	32.7%
2.(g)(ii)	Less minority interests	13	50	(74.0%)	0	0	0
2.(h)	Operating profit after tax attributable to members of the company	1,044	601	73.7%	917	691	32.7%
2.(i)(i)	Extraordinary items	0	0	0	0	0	0
2.(i)(ii)	Less minority interests	0	0	0	0	0	0
2.(i)(iii)	Extraordinary items attributable to members of the company	0	0	0	0	0	0
2.(i)(iv)	Transfer to/from Exchange Reserve	0	0	0	0	0	0
2.(i)(v)	Transfer to Capital Reserve	0	0	0	0	0	0
2.(i)(vi)	Transfer to Reserve Fund	0	0	0	0	0	0
2.(j)	Operating profit after tax and extraordinary items attributable to members of the company	1,044	601	73.7%	917	691	32.7%

Group Figures
		31/3/02	31/03/01
3.(a)	Earnings per share based on 2(h) above after deducting any provision for preference dividends:-	.	.
3.(a)(i)	Based on existing issued share capital	1.24 cents	0.73 cents
3.(a)(ii)	On a fully diluted basis	1.23 cents	0.72 cents
3.(b)	Earnings per share based on 2(j) above:-
	(i) Based on existing issued share capital	1.24 cents	0.73 cemts
	(ii) On a fully diluted basis	1.23 cents	0.72 cents
3.(c)	Net tangible asset backing per ordinary share	19.64 cents	16.84 cents

4.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

 

NIL

4.(b) Amount of any pre-acquisition profits

NIL

4.(c) Amount of profits on any sale of investments and/or properties

 

Sale of investments/properties	$Profit/(Loss)
NIL

4.(d) Any other comments relating to Paragraph 4

 

NIL

5.(a) Review of the performance of the company and its principal subsidiaries

 

(i) BUSINESS SEGMENTS (The Group)

 

(ii) GEOGRAPHICAL SEGMENTS (The Group)

COMMENTARY

Turnover

For the period ended 31 March 2002, our ornamental fish activities and distribution of accessories continued to be our core activities, which together accounted for 88% of our total turnover. Geographically, our Singapore market continued to be our main market accounting for 58% of our total turnover for the period ended 31 March 2002.

Our turnover increased by $3.1 million or 33.6% from $9.4 million for the period ended 31 March 2001 to $12.5 million for the period ended 31 March 2002. All activities registered growth in turnover. Turnover for ornamental fish, accessories, and plastics and other business increased by $1.1 million or 25.8%, $1.9 million or 51.5% and $0.1 million or 10.1%, respectively in the 1st quarter of FY 2002 as compared to its corresponding period in FY 2001.

The increase in the turnover of ornamental fish is due to increase in sales of ornamental fish to the local fish retailers and to visitors patronizing our in-house retail outlet. One of our subsidiaries in Thailand, which commenced its operations in January 2002, has contributed to the turnover ornamental fish in FY 2002.

In addition, with effect from FY 2002, the Taiwanese government has allowed the import of licensed Dragon Fish. Since January 2002, we have started export Dragon Fish to Taiwan to take advantage of the change in regulation. The sales of Dragon Fish to Taiwan accounted for approximately 35% of the increase in sales of ornamental fish.

Our Malaysia & Thailand subsidiaries has contributed approximately 60% of the increase in turnover of accessories as a result of market share gained from these countries towards the end of FY 2001. In the domestic market, we continue to expand and penetrate our distribution network to more local retailers and supermarkets, which has also resulted in the increase in sales of our accessories products.

Following the shift into our new factory location in May 2001, with the increase in production capacity and capabilities, our turnover for plastic and others experienced growth by focusing on more high-value items and expanding our distribution channel to outside Singapore.

On a geographical basis, turnover from Singapore grew 31.7% mainly as a result of improved sales to local fish retailers and sales generated from our in-house retail outlet. Turnover from overseas grew by 36.2% for the 3 months ended 31 March 2002 compared to the corresponding period in FY 2001. Our constant effort in expanding into overseas' untapped markets contributed to the increased in overseas turnover.


Operating profit before taxation

Our operating profit increased by $0.6 million or 84.2% to $1.4 million for the quarter ended 31 March 2002 as compared to $0.8 million for the quarter ended 31 March 2001. Profit after taxation increased by 73.7% from $0.6 million for the 3 months ended 31 March 2001 to approximately $1.05 million for the 3 months ended 31 March 2002.

Although the sales of ornamental fish yielded consistent gross profit margin during the first quarter of FY 2002 as compared to its corresponding period in FY 2001, our operating profit from ornamental fish registered growth in FY 2002 as a result of the surge in sales volume. As our operating expenses remained relatively stable, the increase in sales has resulted in improve in profitability.

During the first quarter of FY 2001, our accessories activities experienced low profit as a result of high purchase costs and operating losses due mainly to set-up and restructuring costs incurred by our Thailand subsidiary (dealing with accessories) which could only resumed operations in May 2001 due to regulatory compliances.

In the first quarter of FY 2002, with a higher sales volume and better gross profit margin achieved, we managed to grow our operating profit from the accessories business as compared to the corresponding period in FY 2001. In addition, our Thailand subsidiary has managed to be operationally profitable by the end of FY 2001.

Despite the increase in turnover, our plastics and other business recorded a dip in profitability. This was as a result of higher operating costs experienced following the shift to our new factory location, coupled with losses incurred by one of our subsidiaries in PRC.

Unallocated corporate expenses relate to staff costs and administrative expenses incurred in relation to the overseeing of the Group's operations both locally and overseas. The increase was in line with additional headcount and corporate expenses.


5.(b) A statement by the Directors of the Company on whether "any item or event of a material

or unusual nature which would have affected materially the results of operations of the
Group and Company has occurred between the date to which the report refers and the
date on which the report is issued". If none, to include a negative statement.

 

In the opinion of the Directors, no item, transaction or event of a material or unusual nature has arisen since the period under review to the date of this report which would materially effect the results of the Group and of the Company for the 3 months ended 31 March 2002.

6. Commentary on current year prospects

 

In FY 2002, while the Group's core business will continue to grow healthily at our home base in Singapore due to the growing domestic market, we expect the bulk of our growth to be from our overseas operations such as our newly formed subsidiary in Thailand, Thai Qian Hu, and our new fish division in Malaysia.

We expect to sustain the growth rate in our subsidiary in Malaysia, Guan Guan, during the current year, especially with the contributions from the newly set up fish division from March 2002.

One of our subsidiaries in Thailand, Qian Hu Marketing, suffered losses in first half of FY 2001 mainly due to restructuring costs incurred, managed to be operationally profitable at the end of FY 2001. With the newly formed Thai Qian Hu, we believe the turnover from our Thailand entities should increase and remain profitable in FY 2002.

We intend to increase our investment in our Guangzhou-based associate company, Wan Jiang, a joint venture with a Taiwanese company specializing in the manufacture of accessories, by raising the stake from 50% to 60%. We are currently in the process of undertaking the necessary filings with the relevant regulatory authorities in the PRC. Upon receiving the requisite PRC approval, Wan Jiang will then become a subsidiary of the Group, which will enable us to recognise its turnover and increase our profit share to be included in the Group's consolidated financial performance.

We have also entered into a joint venture agreement to set up a joint venture company in Taiwan, under the name of Jin Jien Hsing Enterprise Co., Ltd ("Jin Jien Hsing"). Its principal activities relate to the distribution of pet food and accessories. The registered capital and total investment amount of Jin Jien Hsing is NT$1 million, which we have subscribed to 50% of the registered capital.

In addition, with effect from 1 January 2002, the Taiwanese government has finally allowed the import of licensed Dragon Fish. Since January 2002, we have started export Dragon Fish to Taiwan to take advantage of the change in regulation.

As we do not expect to carry further restructuring and start-up costs of our overseas subsidiaries in FY 2002, we expect positive contributions from our Group's overseas operations in Malaysia, Thailand and China. Accordingly, we envisage our Group's turnover and profit will continue to increase in FY 2002.

 

7. Dividend

(a) Any dividend declared for the present financial period? None
(b) Any dividend declared for the previous corresponding period? None

(c) Date payable

Not Applicable

(d) Books closing date

Not Applicable

(e) Any other comments relating to Paragraph 7

NIL

8. Details of any changes in the company's issued share capital

During the 1st quarter of FY 2002, 365,000 share options were exercised pursuant to the terms of the Qian Hu Pre-IPO Share Option Scheme. There was no share options granted during the period to subscribe for unissued ordinary shares.

As at 31 March 2002, there were 2,203,000 unexercised share options issued pursuant to the terms of the Qian Hu Pre-IPO Share Option Scheme at the exercise price of $0.24 per share.

In addition, in March 2002, the Company issued 8,312,700 ordinary shares of $0.10 each pursuant to a bonus issue on the basis of 1 bonus share for every 10 existing ordinary shares of $0.10 each held on book closure date through the capitalization of the share premium account. The bonus shares rank pari passu in all respects with the existing shares of the Company, except that they are not entitled to any dividend declared in respect of the financial year ended 31 December 2001.

9. Comparative figures of the group's borrowings and debt securities

(a) Amount repayable in one year or less, or on demand

As at 31/03/2002

As at 31/12/2001

Secured	Unsecured	Secured	Unsecured
1,384,601	NIL	1,000,181	NIL

(b) Amount repayable after one year

As at 31/03/2002

As at 31/12/2001

Secured	Unsecured	Secured	Unsecured
843,093	NIL	881,747	NIL

(c) Any other comments relating to Paragraph 9

NIL

10. Balance sheet

	Group	Group	Company	Company
	31/3/2002 $	31/3/2001 $	31/3/2002 $	31/3/2001 $
Share capital and reserves
Share capital	9,143,970	8,276,200	9,143,970	8,276,200
Reserves	9,093,387	6,158,847	7,601,657	5,318,283
	18,237,357	14,435,047	16,745,627	13,594,483
Minority interest	50,027	14,683	-	-
	18,287,384	14,449,730	16,745,627	13,594,483
Fixed assets	8,186,261	6,840,639	5,272,951	5,152,312
Subsidiaries	-	-	2,450,844	2,188,706
Associates	319,542	328,521	327,931	327,931
Quoted equity investments	3,993	-	-	-
Trademarks/customer acquisition cost, product listing fees	57,424	218,308	51,710	218,308
Land use rights	224,619	278,097	-	-
Advance for investment	28,722	28,722	28,722	28,722
Current assets
Stocks	6,679,463	5,227,767	3,631,331	2,836,793
Trade debtors	9,258,893	7,101,372	6,734,494	5,110,709
Other debtors, deposits and prepayments	708,720	644,967	291,706	281,221
Due from
- subsidiaries (trade)	-	-	2,827,405	1,878,168
- subsidiaries (non-trade)	-	-	922,414	131,398
- holding company (non-trade)	550	-	550	-
- associates (trade)	900,725	-	900,725	-
- associates (non-trade)	712,873	104,992	712,873	104,992
Fixed deposits	97,839	374,783	21,393	268,926
Cash and bank balances	1,534,398	2,335,035	781,799	1,585,983
	19,893,461	15,788,916	16,824,690	12,198,190
Current liabilities
Trade creditors	3,025,321	3,589,916	2,044,981	2,248,629
Bills payable to bank, secured	1,102,864	1,029,641	1,102,864	1,029,641
Other creditors and accruals	2,411,023	1,741,684	1,806,904	1,201,573
Due to
- subsidiaries (trade)	-	-	69,259	15,171
- directors (non-trade)	2,309	316,109	-	-
Hire purchase creditors, current portion	246,459	174,155	90,796	80,764
Term loan, current portion	200,000	200,000	200,000	200,000
Provision for taxation	1,381,487	1,122,377	1,042,233	958,775
Bank overdrafts, secured	938,142	-	938,142	-
	9,307,605	8,173,882	7,295,179	5,734,553
Net current assets	10,585,856	7,615,034	9,529,511	6,463,637
Non-current liabilities
Hire purchase creditors, non-current portion	(489,478)	(233,114)	(338,427)	(168,114)
Term loan, non-current portion	(353,615)	(545,019)	(353,615)	(545,019)
Deferred taxation	(275,940)	(81,458)	(224,000)	(72,000)
	18,287,384	14,449,730	16,745,627	13,594,483

Statement of Changes in Equity (The Group)

	Share Capital $	Share premium $	Revenue reserve $	Translation reserve $	Total $
Balance 1 Jan 2001	8,275,000	2,081,887	3,361,160	25,546	13,743,593
Currency translation differences	-	-	-	87,275	87,275
Net profit for the period	-	-	601,299	-	601,299
Issue of new shares	1,200	1,680	-	-	2,880
Balance at 31 Mar 2001	8,276,200	2,083,567	3,962,459	112,821	14,435,047
Currency translation differences	-	-	-	9,008	9,008
Net profit for the period	-	-	1,124,896	-	1,124,896
Payment of final dividends	-	-	(312,426)	-	(312,426)
Balance at 30 Jun 2001	8,276,200	2,083,567	4,774,929	121,829	15,256,525
Currency translation differences	-	-	-	(41,603)	(41,603)
Net profit for the period	-	-	497,302	-	497,302
Balance at 30 Sept 2001	8,276,200	2,083,567	5,272,231	80,226	15,712,224
Currency translation differences	-	-	-	124,944	124,944
Net profit for the period	-	-	1,334,872	-	1,334,872
Balance at 31 Dec 2001	8,276,200	2,083,567	6,607,103	205,170	17,172,040
Currency translation differences	-	-	-	(65,870)	(65,870)
Net profit for the period	-	-	1,043,587	-	1,043,587
Issue of new shares	36,500	51,100	-	-	87,600
Capitalisation of share premium for bonus shares	831,270	(831,270)	-	-	-
Balance at 31 Mar 2002	9,143,970	1,303,397	7,650,690	139,300	18,237,357

11. Consolidated Cash Flow Statement

12. Contingent Liability


As at 31 March 2002, the Group and the Company has no contingent liability.




BY ORDER OF THE BOARD

Kenny Yap Kim Lee
Executive Chairman and Managing Director
29/04/2002