Turnaround Quarter for Qian Hu

qian hu logoDragon Fish enthusiast may have heard of Qian Hu (SGX: 552), a company that has its roots in the fish business. It has been listed on the Singapore market since 2000

Qian Hu is an integrated ornamental fish service provider. In other words, it is a one-stop-shop for both local and international customers. Its products range from ornamental fish to a wide range of aquarium and pet accessories.

There are four strands to Qian Hu’s business model. These are:

  1. Breeding and distributing over 1,000 species of ornamental fish.
  2. Distributing more than 3,000 types of aquarium and pet accessories for over 30 major manufacturers in 40 countries.
  3. Manufacturing plastic bags for packing of ornamental fishes which it also supplies to third parties.
  4. A chain of 10 retail stores in China, Malaysia and Thailand.

Qian Hu reported a rise in third quarter profits to S$88,000, which reverses a net loss from the same period a year ago.

The turnaround was primarily due to the disposal of its Malaysia-based Dragon Fish subsidiary, Kim Kang Aquaculture, which resulted in a loss on disposal of $9.1m as well as an impairment loss of $0.3m incurred last year.

Revenue for the quarter was S$20.5m, down 5.5% from last year even though an improvement in net profit was achieved. This was attributed to reduced revenue from Kim Kang’s disposal, which was partially offset by higher sales volume of dragon fish in China and rising contributions from a new subsidiary in Indonesia and increased exports.

Kenny Yap, Qian Hu’s Executive Chairman and Managing Director, said: “We are glad that the worst is over for our Dragon Fish business and prices have begun to stabilise. What’s more assuring is the continued robust demand that we are seeing in Northeast Asia, particularly in China, for our Dragon Fish. Our Indonesian hub is also growing nicely and will be an important growth engine for our Ornamental Fish business.

Based on the Qian Hu’s share price of S$0.09, the company is trading at 469 times earnings. A special dividend of S$0.005 per share has been declared in relation to the disposal of Kim Kang, pending approval at the Extraordinary General Meeting.

Including the previous dividend of S$0.002 paid on March 2013, the total dividends paid amount to S$0.007, which translates to a dividend yield of 7.8%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.   Motley Fool Singapore contributor James Yeo own shares in Singapore Exchange Limited.