News

Qian Hu's Half-Year Turnover Increased 16.7% To $19.9M

SINGAPORE - 24 July 2001 - Sesdaq-listed Qian Hu Corporation Limited ('Qian Hu'), an importer, exporter and distributor of ornamental fish as well as a breeder of Dragon Fish, reported a 16.7% increase in turnover, to $19.9 million for the first six months of FY 2001 ended 30 June.

Turnover for the Group's core businesses registered growth. Revenue from ornamental fish grew by $0.9 million (10.2%). This was boosted by increased contributions from the sales of Dragon Fish, which grew 36%, as well as sales to local retailers.

Aquarium accessories grew by $1.7 million (27.4%), a result of an expanded customer base in Singapore and the rest of Southeast Asia, as well as the sales performance of its overseas subsidiaries, especially in Malaysia. Plastics saw an increase of $0.3 million (12.8%) due to an expansion of the Group's distribution channel in Singapore by supplying directly to end-users instead of relying solely on wholesalers.

The Group's profit after tax (before extraordinary items) for the six months ended 30 June 2001, however, dropped by 10.3% to $1.6 million year-on-year.

This was largely due to depreciation and start-up costs of its subsidiaries in the PRC and Thailand, as well as, to a certain degree, the lower gross profit margins of its accessories business. The restructuring of Qian Hu Marketing Co Ltd (Thailand) was completed in April 2001 and the costs of such an exercise was charged during the first half of the fiscal year.

Based on the latest unaudited results, earnings per share (on a fully diluted basis) fell to 1.91 cents from 2.53 cents previously. Net tangible asset per share, however, rose sharply to 17.76 cents from 12.55 cents previously.

Commenting on the interim results, Qian Hu's Executive Chairman and Group Managing Director Kenny Yap said, "We are pleased with our sales performance in the first six months, even though net profit dipped a little due to depreciation, restructuring and start up costs in our Thailand and China subsidiaries. This is well within our expectation."

"We are nonetheless positive that our investments in these overseas subsidiaries will increase shareholder value as we expect most of these new ventures to breakeven by the end of FY2001," he said.

For the first half of FY2001, ornamental fish sales, grew by 10.2% to $9.4 million, and accounted for 47% of the Group's total revenue. Aquarium and pet accessories similarly grew by 27.4% to $7.7 million, which represented 38.8% of Group turnover, while the manufacturing and distribution of plastic bags, grew by 12.8% to $2.8 million, accounting for 14.2% of total sales.

In terms of geographical contribution, Singapore accounted for $11.6 million in turnover, or 58.2%, while overseas markets contributed $8.3 million in revenue, or 41.8%.

On prospects for the FY2001, Kenny said, "Coupled with the good local market performance, our exports and overseas sales is expected to contribute positively to the Group in the second half. Our directors envisage our Group's turnover and profit for the second half of the year to be better than the first half."

In its bid to expand its distribution network, Qian Hu is in the process of setting up a joint venture in Taiwan to distribute pet foods. The Group's Guangzhou associate company, Wan Jiang began operations in March 2001 to manufacture fish tanks, air pumps and aquarium lamps as well as Qian Hu's proprietary brands of aquarium and pet accessories such as "Ocean Free". Wan Jiang also intends to manufacture for other third-party brands in the near future.

Wan Jiang will initially supply to our regional subsidiaries, and intends to widen its distribution network to the rest of the world, including countries such as Japan, Germany and United Kingdom.

The Group also intends to set up ornamental fish farms in Malaysia, Thailand and Guangzhou in the near future.

On its plastic manufacturing business, Qian Hu subsidiary, Tat Leng, has moved its operations to a bigger Woodlands facility in May 2001. Tat Leng, which is involved in the manufacturing and supply of plastic bags to third parties in the ornamental fish, food, electronic and other industries, will enjoy an increase of 50 per cent in production capacity when fully phased-in by 2002.

About Qian Hu

Incorporated in 1998 to take over the partnership businesses of Qian Hu Fish Farm Trading, Wan Hu Fish Farm Trading and Yi Hu Fish Farm Trading, Qian Hu is primarily engaged in the import and export, farming and distribution of ornamental fish as well as the distribution of aquarium and pet accessories. In addition, it started the breeding and sale of Dragon Fish for commercial sale in the second half of 2000.

With Kenny Yap, winner of the 1998 Singapore Youth Award for excellence in agrotechnological farming, recipient of the inaugural International Management Action Award in November 2000, and one of the Stars of Asia nominated by Business Week magazine (July 2001 issue), at the helm at Qian Hu (which means "Thousand Lakes" in Chinese), the Group has achieved a number of "firsts" in the fish farming industry: