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 Eric Liou, you wrote:
Dear Sir,
Few questions from me.
1) Can you give an update on the land lease renewal issue by URA for Qian Hu's existing site? How many years of renewal granted by URA and how does Qian Hu plan on the long term viability of the ornamental fish breeding in Singapore given that Tengah has been identified as a future housing estate.
2) Impressed that a final dividend of 0.1 cents have been declared despite the reduction of cash level of the company after the special dividend payout, is this a stretch on the company's finances by declaring the final dividend? Will this result in increased borrowings in 2014 to finance the dividend payout and business operations due to dwindling cash generated from operations?
Will the company consider doing a rights issue to pay off the $12 million debt so that Qian Hu can immediately be a debt free company and thereafter channel most of the cash generated from operations in future as a dividend pay-out to shareholders?
Hi Eric,
The Singapore Land Authority have just extended Qian Hu's land lease for 69 & 71 Jalan Lekar, Singapore, for another 3 years. SLA is coming up with new renewal criteria based on value-added and productivity for the land. I believe Qian Hu will fulfil those criteria to obtain longer lease term when we are up for renewal or before that.
Qian Hu promised to payout dividend to loyal and long-term shareholders and we will deliver just that. The main reason of cash flow going down is the special dividend paid last year. Qian Hu still have 3 more instalments coming in from the divestment of Kim Kang Aquaculture Sdn Bhd and thus I believe our debt will not go up in FY2014. If our profits continues its momentum in FY2014, we should see increasing cash flow and debt level declining.
My focus now is to bring Qian Hu to a new strategic level of development by applying technology and innovation in the next few years. Qian Hu has no plans to tap the market for funds currently. The goal of being a debt free and high dividend payout company is intact if the strategic development bears fruit.
Happy New Year!
Kenny the fish
Dear Jayster, you wrote:
Do you sell your accessories online via electronic distribution channels like amazon.com? I see sales enquires on your facebook but seems like customer overseas who want to buy your products find it hard to find physical stores that sells your accessories.
Hi Jayster,
Qian Hu have just mapped out its internet strategy at the end of last year. We are actively using social media to promote our products and creating brand awareness. Qian Hu is considering the option of doing its business on-line. I cannot disclose much as it is still work in progress.
Happy New Year!
Kenny the Fish
Dear David Tan, you wrote:
Would you consider a reverse take-over of the company? Sell your listing shell to another company, take qian hu private and take some time to consolidate the business before coming back to the market.
You don't tap the market for funds and you generate positive operating cashflow. I feel you should take the company private which would benefit minority shareholders and give the business some breathing space without the pressure and cost of being a listed company.
Hi David,
I appreciate your kind intention of suggesting to take Qian Hu private. However, after 2 years of consolidation and restructuring, Qian Hu is ready to move on. Thus I do not think we need to do that. I thank you for your kind suggestion.
Happy New Year!
Kenny the fish
Dear Ah Huat, you wrote:
Why don't Qian Hu buy back its own shares? It is at its all-time low.
Hi Ah Huat,
Share buyback would not necessarily benefit minority shareholders. Running a company that is sustainable and perpetual will. Qian Hu is doing that and will continue in that direction. Moreover, we lack the financial resources to do the buyback now.
Happy New Year!
Kenny the fish
Dear Kelvin Ho, you wrote:
Have you considered a share consolidation? Like a 1 for 10 share consolidation? A 1 cent dividend sounds nicer than a 0.1 cent dividend. A higher absolute value denominated share price would also put you on the radar screen of private funds rather than a sub 10 cents stock.
Hi Kelvin,
Thank you for your suggestion. I will concentrate on executing what we have pledged in our prospects. We will take your suggestion into consideration at a later date.
Happy New Year!
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 2014 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