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Dated 18 January 2010

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 Ah Huat, you wrote:

You mentioned that Qian Hu is moving towards becoming a debt-free company and in the long term aim to give shareholder's better dividend income.

Is Qian Hu avoiding leverage due to risk aversion? I feel some debt is good for the company to improve on ROE. Excess cash can be used to invest in properties to reap long term capital appreciation for the shareholders. What do you think?

Hi Ah Huat,

Happy New Year!

With only two more countries on our expansion plan, namely Indonesia and Vietnam, we do not foresee an increase in CAPEX. Going forward we will be gradually moving towards being a debt-free and high dividend yield organisation.

Qian Hu is run using western style of management but when it comes to cash flow management, I prefer to adopt a more prudent or eastern belief to have as little debt as possible on my balance sheet. This does not mean that Qian Hu is averse to taking calculated risk but it cannot be at the expense of excessive leverage.

If you were to look at Qian Hu's long term prospect goals, one of the things I've mentioned is the company needs to focus on things we know and do best. I believe Qian Hu should not invest in industry that it is unfamiliar with, such as property, electronics, etc. I prefer cash to fixed assets investments.

Kenny the fish

Dear Timonthy Heng, you wrote:

Is climate change affecting the breeding of fishes for Qian Hu? Noted fish farm off the coast off Pasir Ris was wiped out by a plankton bloom.

Are the farms insured against such "Act of God"?

Hi Timonthy,

Happy New Year!

Breeding Arowana is done in a controlled environment compared to fish breeding in the open seas. Weather sometimes affects our breeding but thru our years of experience and R&D knowhow, we have been able to overcome these "Act of God".

We have comprehensive health management system for our fish breeding. We believe that buying insurance for our fishes is not cost effective as the premium is too high. Hence our board decision is to consistently improve our health management system rather then pay excessive premium in insurance.

Kenny the fish

Dear Gerald Koh, you wrote:

Does Qian Hu intend to list on a foreign bourse to seek additional capital and improve liquidity given the low trading volume in Singapore?

I think a share split or a share placement to institution will greatly improve the liquidity and investor's interest in the company. What's your view?

Hi Gerald,

Happy New Year!

At this moment, Qian Hu have not considered listing in foreign stock exchanges but we are open minded about the possibilities.

Recently we have placed out some shares to more than 100 individuals to broaden the shareholders base and to improve the liquidity of our company's shares. Currently, Qian Hu's shares are held by some institutional investors.

Kenny the fish

Dear Francis Lim, you wrote:

What's your wish list for the Budget in 2010 to be unveiled soon?

What's the impact on Qian Hu's earnings if the government's stimulants are removed?

Hi Francis,

Happy New Year!

I hope that personal income tax can be in line with corporate tax. I would like more budget to be allocated for workforce training purposes.

We are not concerned with the removal of government stimulants as our revenue is mostly derived from overseas market. This is why we grew in FY2009 despite the recession. The government stimulants have limited effects on our business due to our global footprint.

Kenny the fish

Dear Ang Kong Huat, you wrote:

May I know how the company got introduced to Clean World Environment and Renewable Pte Ltd?

What is the competitive advantage of its technology?

Hi Kong Huat,

Happy New Year!

Our Head of Research happens to know our partners at Clean World Environment and Renewable. After some discussion, both parties realise that their technology is suitable for application in our industry.

If this technology is applied successfully to our product, the filters that we build would be 50% more efficient than conventional ones. I am very excited about the prospect of this development!

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 2010 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