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.
Kok Cheng
Dear Robert Ng, you wrote:
Is it viable for Qian Hu to relocate its accessories manufacturing to the United States to avoid US tariffs on China?
Dear Robert,
Thank you for your question.
Relocating our accessories manufacturing to the United States is not viable at this stage, as the overall landed cost remains more competitive when produced outside the US, even after accounting for tariffs. Additionally, our manufacturing facilities in China support multiple regional markets beyond the US.
For the US market specifically, we are open to working with local manufacturers or manufacturers from Canada or Mexico, if it offers a clear cost or strategic advantage. This approach allows us to remain flexible and responsive to evolving trade dynamics.
Thank You!
Best Regards,
Kok Cheng
Dear Derrick Neo, you wrote:
You spent S$4.1 million to acquire a freehold property in Selangor, Malaysia. Why don't you acquire properties in Singapore instead of leasing them? This would reduce your operating cost in Singapore.
Dear Derrick,
Thank you for your question.
Our investment in the freehold property in Selangor enables us to consolidate our operations under one roof, improving efficiency and coordination. Previously, we had been leasing multiple premises in the area, so acquiring the property not only provides long-term operational stability but also results in cost savings over time.
In Singapore, our farmland is currently leased from NParks and is not available for purchase. As for our plastic operations, should we decide to expand in the future, we are considering Johor's JSZ industrial zone as a potential location due to its strategic and cost advantages.
Thank You!
Best Regards,
Kok Cheng
Dear Erik Ang, you wrote:
Have you considered spinning off your plastic or accessories business given the government tax incentives for listing on the Singapore exchange?
Dear Erik,
Thank you for your question.
We have not considered spinning off our plastic or accessories business at this stage. While there are tax incentives for listing on the Singapore Exchange, the potential benefits may be outweighed by the additional costs and compliance requirements associated with a separate listing.
We continue to evaluate all strategic options that could unlock long-term value for shareholders.
Thank You!
Best Regards,
Kok Cheng
Dear Pauline Wee, you wrote:
You have S$14 million in cash, have you considered buying back your shares to improve shareholder's return as they are currently trading at less than half the net asset value of S$0.3446?
Dear Pauline,
Thank you for highlighting the gap between our share price and net asset value. This is indeed a concern we share as we strive to ensure Qian Hu’s true underlying value is better reflected in the capital markets.
With over S$14 million in cash and a net cash position, we are actively evaluating various capital allocation options, including reinvestments, strategic acquisitions and maintaining stable dividends. We remain committed to operating as a debt-free company.
We have not initiated a share buyback at this stage but it remains under active consideration by the Board, particularly if it can enhance shareholder value without compromising our growth plans.
We will continue to be prudent stewards of capital, balancing long-term value creation with opportunities to deliver improved returns to shareholders.
Thank You!
Best Regards,
Kok Cheng
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 2025 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.
Kok Cheng