News

Qian Hu Proves Resilient With Better Results In Recession Year

· Turnover rose 22% to $41.3m; net profit up 8.4% to $3.4m
· Proposes to pay 6% gross dividend, and a 1 for 10 bonus issue

SINGAPORE – 28 January 2002 - Sesdaq-listed Qian Hu Corporation Limited, an importer, exporter and distributor of ornamental fish as well as a breeder of Dragon Fish, has managed to swim against the currents of recession by posting increases in turnover and net profit for the year ended 31 December 2001.

Turnover during the period grew 22% to $41.2 million while net profit attributable to shareholders increased nearly 8.4% to $3.4 million.

Turnover for ornamental fish grew by 11.2% to $18.3 million, due mainly to increased sales in the highly-prized Dragon fish, and higher sales activity in the local retail market.

Sales of accessories rose by 38.9% to $16.6 million, nearly half of which were contributed by its subsidiaries in Malaysia and Thailand. Continuous expansion of the Group’s overseas customer base had also made some gain in sales activity in the region.


Revenue from plastics and other business increased by 15.5% to $6.3 million, largely due to the expansion of its distribution channels locally by supplying directly to end-users as well as selling higher-end plastic bags.

Based on the latest audited results, earnings per share (on a fully diluted basis) declined to 4.11 cents from 5.03 cents previously. Net tangible asset backing per ordinary share, however, rose from 15.60 cents to 20.43 cents.

Qian Hu is proposing a first and final dividend of 6% gross per share, which if approved, will be paid to shareholders on 10 May 2002.

For the first time, the Group is rewarding its shareholders through a 1 for 10 bonus issue, subject to approval from The Singapore Exchange. The bonus shares, when issued, will rank pari passu in all respects with the existing shares in the capital of the Company except that they will not be entitled to any dividend declared in respect of FY2001.

Commenting on its second set of full-year results since its listing in 2000, Qian Hu’s Executive Chairman and Group Managing Director Kenny Yap said, “Our improved financial performance proves the point that Qian Hu is operating in a very resilient industry, unperturbed by economic turmoil.”

“In the third quarter of the year, we experienced negligible impact from the events after September 11. Demand for our products was not affected although we faced some difficulty in getting our fish on board flights as air travel was badly affected worldwide,” he elaborated.

“In the fourth quarter, when more flights resumed, we experienced a surge in deliveries as well as increased local demand due to the holiday season,” Kenny added.

At half-time, Qian Hu had reported a 10.3% dip in net earnings to $1.6 million despite a 16.7% jump in turnover to $19.9 million. This was largely due to depreciation and start-up costs of its subsidiaries in the PRC and Thailand, and lower gross profit margins of its accessories business. The cost of restructuring Qian Hu Marketing Co Ltd (Thailand), completed in April 2001, was charged during the first half of the fiscal year.

In 3Q2001, Qian Hu achieved a net profit of $0.6 million on turnover of $9.8 million while in 4Q2001, its net profit increased by 116.7% to $1.3 million, on turnover of $11.6 million, due mainly to higher sales volumes in the ornamental fish and accessories segments.

Comparing 4Q2001 with the year-ago period, net profit improved 44.4%, while turnover gained 33.3%.

For FY2001, ornamental fish sales accounted for 45% of the Group’s turnover. While aquarium and pet accessories accounted for 40% of Group revenue. Manufacturing and distribution of plastic bags made up for the remaining 15%. In terms of geographical contribution, Singapore accounted for $24.7 million (60%) in turnover, while overseas markets contributed $16.5 million (40%).

On prospects for the FY2002, Kenny said, “While the Group will continue to grow organically in Singapore, we expect the bulk of our growth to be from our overseas operations, such as the newly-formed subsidiary in Thailand, Thai Qian Hu, and our new fish division in Malaysia, Guan Guan.”

“In addition, we intend to increase our investment in our Guangzhou-based associate company, Wan Jiang, from 50% to 60%. Wan Jiang will then become a subsidiary of the Group, which will enable us to recognise its turnover and increase our profit share in the Group’s consolidated financial performance. We expect its turnover to increase in the current year.”

“Overall, in FY2002, we expect positive contributions from our Group’s overseas subsidiaries as we do not expect to carry further restructuring and start-up costs. We envisage our Group’s turnover will continue to increase in FY2002.”

Wan Jiang Technology Co Ltd, a joint venture with a Taiwanese partner, produces Qian Hu’s proprietary brands of aquarium and pet accessories such as “Ocean Free”, “ARISTO-CATS YI HU”, “Nature’s Gift” and “Bark” as well as third-party brands. Since January 2002, Qian Hu has started exporting Dragon Fish to Taiwan as the Taiwanese government has relaxed its regulation regarding the import of licensed Dragon Fish.

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 and recipient of the inaugural International Management Action Award in November 2000, 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:

· the first fish farm in Singapore to be awarded the ISO 9002 certification for its quality management system;
· the first in the ornamental fish industry to obtain ISO 14001 certification for its environmental management system;
· one of the first few farms in Singapore to have successfully bred the Dragon Fish for commercial sale; and
· the first company in the ornamental fish industry in Singapore to seek a public listing in Singapore.
· The first fish company to achieve Singapore Quality Circle status.

As an importer, Qian Hu imports ornamental fish as well as fries from countries in Southeast Asia, South America and Africa. The fries are nurtured at its farm in Singapore to marketable size before selling to its retailers and wholesalers directly and through its distribution network worldwide. In Singapore, the Company distributes to more than 200 retailers and 50 exporters.

On the export side, Qian Hu currently exports directly to more than 50 countries and the primary markets are Southeast Asia, North Asia including Japan, Taiwan and China and Europe which includes UK, Germany and France. It also exports cold-water ornamental fish through its farm in China, mainly to Germany, Japan, Singapore and France.

Qian Hu’s facilities in Singapore is located within the Sungei Tengah Agrotechnology Park in Choa Chu Kang. To date, it has invested more than $6 million to develop it into a modern, integrated and high-tech fish farm in Singapore. Some of the facilities include a temperature-controlled packing house, computerised system for trading records, a laboratory for diagnostic purposes and water quality analysis.