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Dated 17 January 2005

Dear Investors,

Thank you very much for the questions and the opportunities to clarify them.

Your questions will be reposted in blue italics followed by our replies in black.

Kenny the fish
Qian Hu Corporation Limited
Hi Jacole, you wrote:

You have been one of the entrepreneurs that I admire, even before I put my first step into this working world.

Though we can see ups & down of the company over years, sometimes shareholders get shaky and come up with tough difficult and even sarcastic questions. You deal with each and every Q&A sincerely and openly. And even spend time to reply to the young children even when they are not shareholders or has nothing to do with your business. I think that you are not only a very patient and remarkable CEO but also a good marketer that comes out with Out of the Box ideas that turn an ordinary Fish Farm to a very extra Ordinary QianHu of today. It will be a great pleasure if I even have the chance to be under your teaching.

I first visited Qianhu when I was 20 yrs old and I can definitely see the development over the years. (My 1st Tetra was bought there)

Now, QianHu is not only a farm for viewing fishes now we can chose various fish tanks setups, fish accessories, I can say it is a one-stop station for everything you need for setting up an aquarium. It is now a place not only for fish lovers but also young and old. there are fish ponds to keep the children busy catching fishes over and over again. Farm-like setup with birds, chickens, small animals etc. now you dun even need to bring them to the zoo. You've solved the problem of accessibility by offering Free shuttle services at various MRT stations and we can even see various exotic fishes during Chinese New Year!!!

I will continue to keep a look out on your website and hopefully I day I will have a chance to be under you and your organization.

Jacole Kasumi

Hi Jacole,

Thank you so much for your sweet comment about us. You are too kind to Qian Hu and me. We are always trying to look out for " B.A.D" employees. Those who belief in our direction, values and culture, have right attitude towards work, and are very disciplined.

Best regards,
Kenny the fish
Pong888, you wrote:

Dear Kenny,

Some questions:

1. Read somewhere that your china plant utilisation is just 50% for the accessories. Is that a bit low in your opinion? Is it because of the doubling of capacity that your utilisation is now at 50% only? What is the breakeven point of utilisation for this plant?

Hi Pong888,

How are you lately?

We have relocated our factory beginning of last year and it is three times bigger than our previous one. One of the reasons we invested in this factory is to produce some aquarium accessories for our group and to build our own brands.

Also, we are receiving more requests from our suppliers in European countries to be an original equipment manufacturer ("OEM") of their product. This is happening because the cost of producing those products in their countries are getting more and more expensive.

The break even point is around 50% of its utlilisation rate.

2. Your share price has taken a tumble ever since you announce lower profits and moving into the pet store business. While it clearly indicates that investors are not "buying" into your story. What is your message to the sceptics out there?

Business is for the long term. When we believe that moving into pet chain stores will pave the way for us to build a company that lasts, we should and will not be intimidated by the short term share price fluctuation. If we manage the company purely based on short term share price movement and expectations, we will eventually pay the price in the long term.

3. In one of your slides here: http://qianhu.listedcompany.com/misc/slides_fy2004_presentation.pdf ... you mentioned longer gestation period for the retail stores to show results. How long do you expect a store to turn profitable? And how long do you think it will take before the store turn mature and starts to be cash cow?

We believe it will take one to two years for the stores to contribute meaningfully to our group revenue and bottom line.

Best regards,
Kenny the fish
Paddington, you wrote:

Dear Kenny,

Although the financial statements don't quantify the number of new shops to be opened in 2005, The Straits Times quotes you as saying that the openings will continue.

Given that your bank term loans were $7.4m at 31 Dec, what do you believe they will be by say the end of H1? Secondly, are you satisfied that the company can continue to increase its borrowings without breaching its banking covenants?

Hi Paddington,

Thank you for your questions.

We do not intend to continue to increase our borrowings. We will open a few more stores this year but it won't be as many as last year. We believe we can tap on our internal funding.

Best regards,
Kenny the fish
Gan, you wrote:

Given the sharp rise in bank borrowings, have you taken into consideration the impact of future interest rate increases coupled with a continuation of the current poor cashflow?

How much more would Qian Hu borrow to fund its dream? Either in terms of gearing or actual loan amounts.

Hi Gan,

Thanks for your questions. I believe your questions are already answered that in my previous reply above.

Best regards,
Kenny the fish
Kreagon, you wrote:

Hi Kenny,

Great to hear more on the expansion of the Pet Stores overseas. I believe this corporate direction is the optimal way to grow Qian Hu and also improve on your branding and presence.... do keep us inform of the pet store expansion. Would be nice to have some visuals on your web to see the "physical evidence" of your branding and expansion overseas.

Hi Kreagon,

Thank you for believing in us.

You can see some pictures in our Year 2004 final result presentation slides. Please visit www.qianhu.com , click under "Investor relations" and then go to presentation or go to our IR pages here.

We will create a section in our website when we have more pictures in the future. Enjoy viewing!

Best regards,
Kenny the fish
Hi Against The Gods, you wrote:

Would you describe 2004 as the toughest year since Qian Hu started ? Or was there any harder time before that? Thank you.

Hi Against The Gods,

Transformations are never new to Qian Hu. In 1996 when we decided to forgo our local wholesale business to become a local exporter (and become one of them), our sales to local exporters dropped from half a million a month to around S$200,000. We were having only around S$200,000 export business per month then. That was a tough year. But when we listed in Year 2000, we are one of the biggest and now we can even export fish from 5 countries.

Best regards,
Kenny the fish
Hi all!

Once again, I hope I have answered all the questions to your satisfaction. Thank you so much for your interest in our company and it is my duty to update and inform public about our development and progress. I just hope I have more time to do it more often.

I hope to take this opportunity to wish everyone a wonderful Year of Rooster.

Best regards,
Kenny the fish