News

Qian Hu's Half-Time Earnings Surged 84% To $2.9 Million On Sales Of $27.8M

• 40% leap in sales due to improvement in domestic and export distribution in its Singapore and overseas bases
• Export of Dragon Fish to Taiwan accounted for 26% of sales increase

SINGAPORE - 24 July 2002 - Integrated ornamental fish service provider Qian Hu Corporation Limited nearly doubled its half-time net profit on the back of a 40% rise in Group turnover.

For the six months ended 30 June 2002, Qian Hu achieved net profit of $2.9 million on sales of $27.8 million, compared to $1.6 million in net earnings on revenue of $19.9 million during the year-ago period.

Based on the latest interim results, earnings per share increased to 3.15 cents from 1.74 cents previously, while net tangible asset backing per share rose to 23.3 cents from 17.9 cents. Return on equity increased from 10.4% to 12.1% while the Group's debt-to-equity ratio was reduced to 0.06%.

"All of our core activities registered turnover growth. Our strong performance for the first half was led by a 63% increase in our accessories business and a 28.3% growth in ornamental fish sales. Our strong sales teams in regional bases in Singapore, Malaysia, Thailand and China helped to forge a strong domestic distribution and export network," said Kenny Yap, Qian Hu's Executive Chairman and Group Managing Director.

Sales of Qian Hu's ornamental fish leapt 18.9% from 1Q02 to 2Q02 mainly due to a rise in sales to more local retail outlets; better patronage at Qian Hu's in-house retail outlet at Sungei Tengah Agrotechnology Park; improved sales contributions from PRC subsidiary Beijing Qian Yang; and increased Dragon Fish exports. The export of Dragon Fish to Taiwan accounted for approximately 26% of the increase in fish sales in the first half of FY2002 since the Taiwanese government relaxed restrictions on the import of licensed Dragon Fish in January this year. In addition, subsidiary Thai Qian Hu and a newly-setup fish division in Malaysian subsidiary Guan Guan, both of which commenced operations in January 2002, contributed to the higher turnover.

Qian Hu's accessories business registered a 26.5% growth from 1Q02 mainly due to the increased market share gained by its subsidiaries in Malaysia and Thailand. In Singapore, Qian Hu's accessories continued to expand through a wider distribution network of local retailers and supermarkets.

On the Group's growth prospects for the rest of the current year, Kenny said, "Against the backdrop of a healthy Singapore market, buoyed by increasing demand for Dragon Fish in Taiwan, we expect the bulk of our growth to be from our overseas operations, namely Malaysia, Thailand and China."

Qian Hu's Malaysian subsidiary, Guan Guan, who managed to increase its turnover and profitability significantly in the first half by expanding market share in the accessories and ornamental fish businesses, is expected to sustain growth into the second half. Similarly, the Group's operations in Thailand -- Qian Hu Marketing and Thai Qian Hu -- are expected to increase revenue and remain profitable for the current year as well.

Through extensive marketing effort to penetrate the domestic market in PRC, Beijing Qian Yang, together with Wan Jiang, the Group's accessories manufacturing base in Guangzhou, will be able to recognise an improved turnover and increased profit share. The Group is in the process of raising its stake in Wan Jiang to 60%, thereby making it a subsidiary.

In April this year, the Group had announced the establishment of a joint venture in Taiwan to distribute pet food and accessories which will enable Qian Hu to directly tap into new markets there.

"As we do not expect to carry further restructuring and start-up costs of our existing overseas subsidiaries in FY2002, we expect positive contributions from our Group's overseas operations which we hope will enable our Group's turnover and profit to further increase in FY2002," added Kenny.

About Qian Hu Corporation Limited
Incorporated in 1998, Qian Hu is an integrated ornamental fish service provider - providing a spectrum of services involving distribution of well over 500 species of ornamental fish from all around the world as well as the manufacturing and distribution of a wide range of aquarium accessories, including pet foods and medications.

Qian Hu (which means "Thousand Lakes" in Chinese), achieved a number of "firsts" in the ornamental fish industry:

• The first integrated ornamental fish service provider in Singapore, Malaysia and Thailand 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 ornamental fish operations 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 integrated ornamental fish service provider to achieve Singapore Quality Circle status.