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Dated 19 Jan 2009

Dear friends,

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

Dear Jayster, you wrote:

Hi Kenny,

Congrats on a notable set of FY08 result given the current economic downturn!

Banks has tightened granting credit to SMEs. How has this affected Qian Hu in terms of access to credit and interest rate when obtaining or renewing a bank loan?

Wages constitutes a major part of Qian Hu's operational cost. What measures has the company taken to control wage cost considering the global retrenchment trend?

Hi Jayster,

Happy New Year and thanks for the kind words!

Banks still need to do business and as long as the company's cash flow is healthy and profitable, they are generally quite supportive.

Qian Hu's employees are the most valuable asset we have. We will continue to train them and give them pay increment based on their work performance.

Our cost control measures includes increasing productivity and efficiency of our work-flow process, using creative methods to do marketing and sales and leveraging on our brand equity and supply chain to achieve economies of scale, etc.

Kenny the fish

Dear Serene Lim, you wrote:

Hello Kenny,

I heard Qian Hu is sponsoring the Singapore 2010 Youth Olympics Games.

Will Qian Hu pull out of the sponsorship if the economic climate continues to get worse?

How much money will Qian Hu be pledging for the games?

What benefits does Qian Hu see from the sponsorship of the games?

Hi Serene,

Happy New Year!

Qian Hu will be supporting the Youth Olympics Games but have yet committed to sponsoring the event. Every Singaporean should support this meaningful event in one way or another. This will enhance Singapore's image as a global hub for international sporting events and indirectly boost the tourism and hospitality industries and ultimately Singapore's economy. The economic benefits will be felt by Singaporeans in the short term while the event is being hosted but the image build hosting the game will put Singapore on the World Map attracting future international sporting events in the long run.

Kenny the fish

Dear Gerald Toh, you wrote:

The Singapore Budget 2009 has been brought forward to 22 Jan 09.

What budget wishes do you have for our finance minister in terms of aids for SMEs like yours?

Hi Gerald,

Happy New Year!

Over the years, our government has accumulated a sizable amount of budget surplus. Given the extent of the current economic downturn, I hope the government can dip into our reserves to ensure that Singapore will be the first country in Asia to get out of recession.

All the fiscal policy used in the past 10 years must be utilised such as lowering of various types of taxes, rebates in rental and utility cost, GST and if possible CPF.

I would propose the establishment of a national bank for 2 years to grant SMEs ready access to credit. The government should make sure all ministry and statutory boards spend the entire budget allocated to them. Government spending is critical in this crisis.

Kenny the fish

Dear Alvin Koh, you wrote:

Is the fish pet business recession proof?

Which country or segment of your business has performed exceptionally well despite the poor economic outlook?

Hi Alvin,

Happy New Year!

Pets are an emotionally attached product. I would think few would abandon or put their pets to sleep when they lose their jobs.

In Asia, when times are bad, the belief in "Feng Shui" is intensified and keeping fish as a pet is popular as fish and water in Chinese Character means "Surplus" and "Wealth" respectively.

In the western countries, people stay home more and travel less, they do more indoor activities and keeping fish pets fit that bill.

We think developing countries such as China and India will perform better as they are less affected by the financial crisis. We still hope to grow in all segments of our business during this challenging time!

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 Half Year 2009 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.

Kenny the fish