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23 July 2012

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:

Your sale of Kim Kang Aquaculture Sdn Bhd will net S$3.9M in cash installments for 4 years. You are using the first installment to pay out a special dividend of 0.5 cents per share. WIll you be doing the same for the next 3 years?

Hi Jayster,

The disposal of shares of Kim Kang Aquaculture is a one-off event, hence Qian Hu is issuing a one-time special dividend.

The special dividend will not affect our normal dividend pattern.

Kenny the fish

Dear Ah Huat, you wrote:

Where are you going to transfer the 1,000 tails of Arowana brooder stocks? Does the ponds in Singapore have enough capacity? Wouldn't it cost you more to breed Arowana in Singapore than in Malaysia?

Hi Ah Huat,

Qian Hu will sign a proxy farming contract with Kim Kang Aquaculture and maintain the fishes there to breed. We will instill control and assign people to safeguard our brooder stock there.

Kenny the Fish

Dear Ben Tan, you wrote:

Your Accessories business is doing well. Where is the strength coming from? Which country and what product is selling well?

Hi Ben,

Over the past 2 years, Qian Hu has been focusing on innovative products such as specially designed Dragon Fish tanks, Hydra filters using Hydro-Pure technology and LUMI'Q Aquarium combining minimalistic design with high performance functionality, etc. These products have become increasingly popular with our overseas customers, hence our export of aquarium accessories have grow accordingly.

Our sales of accessories in China have shown positive growth momentum too.

Kenny the fish

Dear George Lim, you wrote:

I think you should also sell your Plastics business. I think Qian Hu should concentrate on the high margin business of breeding high-quality Arowana and selling branded Accessories. What do you think?

Hi George,

Our plastic business is a cash cow. It requests no additional Capital Expenditure and is able to realise 80% of its profit into cash. We will keep the plastic business in our group.

However, if someone offer us a price we cannot resist, we will consider selling the plastic business.

Kenny the fish

Dear Susan Tan, you wrote:

Your land lease for 69 & 71 Jalan Lekar, Singapore ends in 2013 which is next year. Will you be renewing the lease? WIll Qian Hu ask for more land for ponds since it has ceased Arowana breeding in Malaysia?

Hi Susan,

We are in the process of talking to Singapore Land Authority for the land lease renewal. We are not asking for additional land as the brooder stock will be proxy farmed with Kim Kang Aquaculture.

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 2012 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