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Dated 23 July 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 Chow Sien Tai, you wrote:

You seldom see Office with Fish tank for decoration like putting indoor plant. Why not QH set up a business where QH will provide the setting of Fish tank for Offices with a sum of rental payment every month. Co. always thinks that to maintain fish tank is troublesome and need certain expertise. You can only see fish tank for decoration in places like airport or certain big building.

Hi Sien Tai,

Qian Hu does engage in the business of maintenance work for fish tanks in offices and we occasionally set up ponds and tanks for residential and commercial use too. However, the revenue contribution from this segment of the business isn't substantial yet.

Kenny the fish

Dear Jayster, you wrote:

The Singapore government is raising foreign labour levy to reduce our dependency on foreign labour and hence improve the wage level and productivity of Singaporeans.

What effects will this new policy have on Qian Hu. Do you think the policy is effective?

Hi Jayster,

I've expressed my views on this issue in "The Business Times".

The original text is reproduced below for your reference:

" In order to build a team, when we take in foreign workers, we should treat them as our team members regardless whether they or foreigners or not. To raise the productivity of the whole team, we must upgrade all of the team members' skills. Therefore, previously when the government only subsidized local workers training, it defy my logic of building a team. As far as the company is concerned, if you are good, you are good regardless whether you are Singaporeans or foreigners. And if you are good, I have the duty to advance you. Company does not treat their foreign workers as PR, they treat them like their family members and give them their deserved opportunities because they are good. Period.

My experience tells me that the difference between Singaporeans and foreign workers is their ATTITUDE. Most foreign workers are dead serious about working, and quite a few young Singaporeans, maybe due to their parent wealth, forced themselves to work. So our government can talk about increasing our productivity to 3% to 5%, my gut feel is if we cannot find a way to change the working attitude of our young Singaporeans, it is going to be a tall order.

Maybe we should start with parents, tax those parents who spoil their children such as if they bought HDB flat for them, tax them. Give incentive to young local workers who don't hop job for let's say more than 3 times within 10 years.

We Singaporeans are the one who should be blamed for low productivity not foreigners. They are here to help and will help us increase our productivity if you treat them fairly and give those good one an equal opportunity to be trained and excel."

Kenny the fish

Hi Serene Lim, you wrote:

Hello Kenny,

The Singapore 2010 Youth Olympics Games is starting soon in about 1 month's time.

Is Qian Hu sponsoring the event? I can't seem to find Qian Hu's sponsorship in YOG's website.

Hi Serene,

Although Qian Hu isn't one of the major sponsors of the Youth Olympics Games, we've been promoting the event even before Singapore began bidding for it.

Qian Hu came up with the idea of using stickers to help promote the effort to have Singapore as the host country for YOG 2010 on all our export fish boxes to more than 80 countries. YOG is also promoted in our farm retail area.

Kenny the fish

Dear Gerald Tan, you wrote:

Hi Kenny,

Sorry to hear earnings is down due to climate change and the world cup.

What's your outlook for the rest of the year given the economic outlook for US, Europe and China is slowing down.

How's your India venture coming along? Noted it posted some losses for the quarter reported.

Hi Gerald, you wrote:

Qian Hu anticipates better results in the second half of the year. The fish breeding business is quite resistance to economic slowdown or recessions. We believe that there is room for growth regardless of economic conditions. However, unforeseen circumstances can and do happen as it did in 2Q10 hence affecting our overall 1H10 result.

On the contrary, Qian Hu isn't losing money in our India joint venture. The losses posted were the set-up cost. The amount was accounted for in 2Q10 due to the Indian accounting standards. We expect the joint venture to contribute to Qian Hu's bottom line in FY2010.

Kenny the fish

Dear Christian Tan, you wrote:

Hi Kenny,

I've noticed that Qian Hu is largely a fish breeder and exporter of Dragon Fish.

The disadvantage is that Qian Hu has little control over the marketing of its products to boost sale as this is often handle by its foreign distributors.

Given the example of the world cup when Paul the Octopus and Mani the parakeet predicted the results of football matches, Qian Hu could have taken advantage of this craze of animal psychic power to sell its Dragon Fish to football punters. Qian Hu could also design accessories to allow fishes to predict lottery results.

Many retailers like Fast Food and Electronic goods retailer has positioned their products for major events like the world cup to boost sales.

I believe Qian Hu can do much better if it has better control over the marketing and sales of its products rather then just being an exporter.

What's your take on this?

Hi Christian,

Qian Hu sells most of its Dragon Fish overseas through its subsidiaries, especially in China. Hence we have the ability to control the distribution and marketing process of Dragon Fish sales in export countries. Qian Hu believes in building strong distribution channels to enhance our product-to-market capability. We believe the Company is heading in the right direction.

Yes, we should have done something during the World Cup to boost sales but the priority was to tackle the unforeseen circumstances like the Icelandic volcanic ash over European air space, drought conditions in Malaysia earlier in the year and the recent FIFA World Cup which affected the sales of ornamental fish exports.

Kenny the fish

Dear Glenys Yin, you wrote:

Hi Kenny,

I'm a SP student doing a research on productivity about your company. How your company actually deals with productivity problems and what are the measures you used to overcome that problem and to increase productivity. Be it your staff or your fishes. Hope you can get back to me as soon as possible as I think your answer will be of great help to my project. Thanks Kenny (:

Did HR help you in any ways to increase your company's productivity? We are actually studying Human Resource Management with Psychology in SP.

Hi Glenys,

Our Human Resource manager is helping me to drive productivity in Qian Hu.

Qian Hu has been active in driving productivity within the organisation. Recently, SPRING Singapore helped us to do an assessment on our productivity level so that we can identify our areas of weaknesses and rectify them. We feel productivity should encompass the entire organisation in order to be effective.

Multitasking, automation, technology advancement, upgrading of employee's skills, cost consciousness and innovation are just some of the methods Qian Hu use to boost productivity.

Hope the answers help in your project!

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 Full 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