Chat with Kenny

Hi SI users,

Thanks for your questions posted over the past week. I am happy to answer your questions online. I will repost the questions in blue italics followed by my comments in black.

Kenny the Fish

Against The Gods, you wrote:

What are your experiences when the oil prices are high ? Is it good or bad QianHu ? Or it doesn't matter.

Hi Against The Gods,

All the related cost of oil price can be passed on to our customers hence the effect is minimum.

Kenny the Fish

Jayster, you wrote:

Hi Kenny,

Qian Hu's share price has been rangebound with little liquidity. Does the company has plans to enlarge its share capital either by way of share placement to institutions or issuing of bonus shares to boost liquidity?

Hi Jayster,

How are you?

We have no plans for a share placement in the near future as we believe our share price is currently undervalued by the market. We have not made a decision on whether Qian Hu will issue bonus shares in the future.

Kenny the Fish

Marcus, you wrote:

Earnings has been pretty flat for the past few years for Qian Hu registering little growth. Any bold expansion or aquisition plans to put Qian Hu on the next phase of growth?

Hi Marcus,

We have embarked on some transformation to our business model in the recent years and that temporarily suppressed our earning growth. In FY2005, we placed more emphasis on cashflow management rather then growth. We will be putting in place some growth strategy in the second half of FY2006 into FY2007.

Kenny the Fish

Serene Lim, you wrote:

Mr Yap,

I've looked at your financials and noted that Qian Hu's strength is into the breeding of Dragon Fish. The other aspect of the business like accessories & plastics are not that strong. What plans do you have to strengthen the weaker businesses?

Hi Serene,

Our plastics business is surprisingly resilient and provide healthy cashflow to the group. I'll have to admit the accessories business is on the weak side currently but once our strategy of improving factory efficiency, increasing the number of distribution points in China and higher export figures of our products are in place. We believe Qian Hu will return to strong growth again.

Kenny the Fish

Nelson Ng, you wrote:

Hello Kenny,

I'm an animal lover. I've noticed you can breed Dragon Fish faster because you have a tieup with Temasek Life Sciences lab to study their breeding behaviour. Were the fishes used harmed in anyway when they are used in the experiment? Are there any reports published documenting the research processes carried out? Thank you.

Hi Nelson,

I assure you that no harm was done to the fishes involved in the studies. Only a scale sample is needed from each fish to determine the DNA markers required by the researchers. Temasek Life Sciences lab might start to release some research paper pertaining to this project by year end!

Kenny the Fish

Boon Ngee, you wrote:

1) There appears to be some intense price competition by Malaysia and Indonesian breeders/traders especially in China market. However, Qian Hu's results were not adversely affected. Could you elaborate the market situation and your strategy?

Hi Boon Ngee,

We have created a strong brand name in China based on our product quality assurance and provding good customer service. We are thus able to differentiate ourselves from other players and hence maintaining our profit margin.

2) How do you build up your broodstock, which is now getting more difficult to obtain? What's yr current no of broodstock?

We source our brooder stock from a few countries.

Kenny the Fish

Gary Low, you wrote:

What is your company pricing strategy to sell the goods?

Hi Gary,

We don't compete in terms of pricing but on quality, service, branding and assurance.

What is the buyer really want to buy in your company? Is that only fish?

We are in the business of providing fish, aquarium and pet accessories to our customers. We do maintenance of tanks for our customers as well. Oh yes, we have retail chain stores too.

Is that Qian Hu company provide the additional service for your consumer? Is that free?

For example--
1.warranty
2.Quality approven
3.Delivery cost and packaging cost
4.After sale service
5.Quality control

It depends on the services requested by our customer listed in the Sales Agreement.

Kenny the Fish

NorthStarLite, you wrote:

Congratulations on the excellent results and thanks to you guys for having worked hard!

Hi NorthStarLite,

Thank you very much for your kind words about us. Really appreciate that!

Got a few questions...

1) How much of the revenue and profit for this quarter and this half were contributed by Qian Hu's retail chain shops?

Less than 10% were contributed by the retail division.

2) I understood from the financial statements announcement that to date, Qian Hu had set up 12 retail shops. What are the breakdown of these retail shops by country? Are there any projections on the number of retail shops intended to be set up?

We have 5 in Malaysia, 4 in Thailand and 3 in China. We might open more retail shops in Malaysia in the near future!

Thank you in advance for the reply!

I would like to thank you for your questions!

Kenny the Fish

Thanks again to all the investors who have posted their questions here. I hope I have answered them to your satisfaction. The next chance for us to correspond again will be the time when we announce our Third Quarter Year 2006 results. In the meantime, do feel free to visit our corporate website: http://www.qianhu.com/ and our IR website: http://qianhu.listedcompany.com/ for more information.

Take care and I look forward to our next online Q&A.

Have a nice weekend!

Kenny the Fish