Strategies

Our Long-Term Prospects

1. To be the world's Number 1 ornamental fish exporter
   Our long-term goal is to increase our global market share to 10% and our export markets to 100 countries, as we position ourselves to become the world's top ornamental fish exporter. We hope to achieve this by exporting more Dragon Fish to China, India and Vietnam. In FY 2009, we have established a joint venture in Chennai, India which we hope will enable us to establish an extensive distribution network within and beyond this Subcontinent. We are also casting our eyes for investment opportunities in Indonesia and Vietnam and to set up subsidiaries in these countries within the next four years. We believe these efforts will generate higher sales of our ornamental fish moving forward.
   
   We will leverage on our research & development capability to improve our ornamental fish packaging technology and quarantine skills to further differentiate ourselves from the other industry players. We will also explore the feasibility of pursuing high-end agriculture, such as bio-secured farming of selected fish species. This will enable us to mitigate and to manage risks related to negative weather conditions that will affect fish farming so as to ensure the consistency in the supply of these fish species.
   
   
   
2. To improve revenue contribution from pet accessories
   In FY 2009, revenue generated from our Ornamental Fish and Aquarium & Pet Accessories accounted for 50% and 39% of total revenue respectively. We expect the Accessories segment to increase its contribution, even as sales of Ornamental Fish segment continues to grow, until the sales mix is about equal between the two segments.
   
   While the current mix of Accessories sales comprises of 90% from aquarium accessories and 10% from pet accessories, we expect sales of pet accessories to increase to about 50%, as we leverage on our own propriety brands, namely "BARK", 'Nature Gift", "Aristo-Cats YI HU" and "Delikate".
   
   
   
3. To export our aquarium and pet accessories to more countries
   We intend to grow our export of aquarium and pet accessories to as many countries as our ornamental fish export in five years' time. We aim to do this by cross selling our accessories products to our existing ornamental fish customers, as well as expand our customer base in new countries through active marketing and participation in trade shows. It is important that we focus on innovative product development, ensuring consistency in quality and the building up of our own proprietary brand names.
   
   
   
4. To have the widest distribution network in China & India
   China
   We intend to further enhance our presence in China by increasing our marketing effort and leveraging on our premium brand status. We also plan to increase the number of distribution points to more than 500 locations in the next few years. As China becomes more prosperous, we will open up distribution points in the 2nd, 3rd or 4th tier cities.
   
   India
   Our joint venture in Chennai, India will initially focus on the manufacturing of aquarium accessories and fish foods. However, we also intend to grow our distribution network for ornamental fish in various cities in India eventually. Similar to our vision for China, our aim is to have the widest distribution network in the Indian Subcontinent.
   
   
   
5. To strengthen our R&D commitment
   We formed a R&D team in the Singapore HQ in the fi rst quarter of 2009. With the conscientious R&D effort put into the researching of Dragon Fish breeding behaviour, we aim to be Asia's most innovative and profitable Dragon Fish breeder.
   
   Other than the R&D work in Dragon Fish breeding, our R&D team has engaged in the following three major research directions:-
   1. Provide fish disease diagnosis and cure in order to improve and upgrade the quality of our export of ornamental fish. This is also in connection with the research work we carry out in developing new fish medications and conditioners for our accessories business.
   2. Develop a new range and design of new generation aquarium accessories, ranging from filtration systems to sterilisation units for aquariums which, we anticipate, will revolutionalise the ornamental fish industry.
   3. Explore new forms of ornamental fish farming technology to meet the changing demands in the ornamental fish market such as a novel, efficient and rapid system to produce high quality and disease-free fish.
   
   
   
6. To be a debt-free and high dividend yield company
   We do not expect to incur substantial amounts of capital expenditure or investments in the foreseeable future. Even if the possible investment opportunities in Indonesia and Vietnam mentioned earlier materialise in subsequent years, the investment amounts should not be significant, and this will be funded through cash generated from operating activities.
   
   In view of the above, coupled with better cash management and the consistency in generating cash from operating activities with stable profits from all the entities within the Group, we believe that Qian Hu will soon move towards becoming a debt-free company with high dividend yield.
   
   
   
7. To change with the times, always differentiating ourselves
   Our long-term growth depends on our ability to change and adapt to the business environment. We have demonstrated our tenacity by enduring the painful process of restructuring in FY 2004. Going forward, we will continue to build a knowledgeable workforce and be differentiated through product, service and business innovation. Ultimately, our aim is to build an organisation that will last for generations.
   
   
   
8. To stay focused in whatever we do
   We are an integrated ornamental fish service provider and must always focus on our core competencies. Though a small company in a niche industry, we are one of the leaders in the global ornamental fish market. By staying focused and relentlessly pursuing business excellence, Qian Hu will one day become a bigger company with even better long-term prospects.