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Qian Hu’s Strong Rebound in the First Quarter

If you are a Dragon Fish enthusiast, you may have heard of the company that has its roots in the fish-rearing business, Qian Hu Corporation (SGX: 552). Listed on Singapore’s stock market since 2000, QianHu breeds, imports, exports and distributes ornamental fish including its speciality, the Dragon Fish. In addition, the company also manufactures and distributes aquarium accessories to both local and international customers.

QianHu had reported its results for the first quarter of 2014 on Tuesday after the markets closed. It managed to achieve a marginal 2.4% year-on-year increase in quarterly revenue from S$20.2 million to S$20.7 million. Meanwhile, the slight increase in sales had resulted in a strong rebound in net profits, as it soared 86% from S$62,000 a year ago to S$115,000.

QianHu’s business activities are packed under three business divisions: Ornamental Fish; Accessories; and Plastics. Despite the Ornamental Fish segment’s operating profit skyrocketing by 151.2% to S$304,000, the high-flying results were mitigated by two factors: 1) a mere 4.8% improvement in operating profit to S$438,000 for the Accessories segment; and 2) a 42.7% drop in operating profit to S$133,000 for the Plastics segment.

Kenny Yap, Qian Hu’s Executive Chairman and Managing Director, commented on the company’s first quarter: “While we are pleased with the continued strong showing of our Ornamental Fish business, we are even more excited about the transformation of Qian Hu into a next-generation, high-technology operation which will bring about new growth dynamics in both our Ornamental Fish and Accessories businesses.”

He continued by adding that the company has an exciting pipeline of innovative, proprietary Accessories and Fish Nutrition products and he believes that these initiatives, together with the company’s leading Dragon Fish research efforts, will enable Qian Hu to be more resilient and sustainable in the long term.

Based on QianHu’s share price of S$0.083 as of 15 Apr, it is trading at a lofty 106 times trailing earnings and sports a historical dividend yield of 1.20%.

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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 doesn’t own shares in any companies mentioned.