Qian Hu Q3 net profit up 23% to S$175,000

MAINBOARD-LISTED Qian Hu Corporation on Tuesday announced a 23.2 per cent rise in net profit attributable to shareholders to S$175,000 for the third quarter ended Sept 30. This was despite group revenue declining 4.7 per cent to S$21.4 million, with sales from its core fish and accessories segments dipping slightly.

Revenue from the fish segment slid 4 per cent to S$8.6 million, despite higher contributions from Qian Hu's new edible fish aquaculture business in Hainan and increased exports from the group's hubs in Singapore, Malaysia, Thailand and Indonesia. Qian Hu attributed the fall in revenue largely to fewer orders during the World Cup season in June and July, and intense price competition in the dragon fish business since the start of the year, which led to lower selling prices though the group sold more dragon fish. 

Nonetheless, the fish segment saw operating profit rise 9.3 per cent to S$480,000 due to a different sales mix and the resilience of its export business.

Accessories sales fell 7 per cent to S$9.7 million due to weak purchasing sentiment worldwide, exacerbated by currency volatility and trade tensions between the United States and China. Yet, operating profit jumped 21.5 per cent to S$429,000, which Qian Hu attributed to higher sales of its own innovative products which fetch higher margins.

Sales of plastics were relatively consistent year-on-year, up a marginal 1.2 per cent to S$3.1 million. However, gradual increases in manufacturing costs resulted in operating profit falling 35.9 per cent to S$186,000.

Said executive chairman and managing director Kenny Yap: "Despite momentary fluctuations in our Fish and Accessories revenues this quarter, we have continued to focus on driving efficiency as well as boosting margins. Considering the challenging business landscape, we have done reasonably well.

"Moving ahead, we continue to be optimistic about our export business for ornamental fish and accessories, even as we intensify our efforts on achieving excellence in our new edible fish aquaculture business in China. In addition, we remain steadfast on innovation as we expand our product portfolio through our cutting-edge filtration technology, fish nutrition and genetic breeding of unique varieties of dragon fish," he added.

Earnings per share for the third quarter were 0.15 Singapore cent, up from 0.13 Singapore cent in the year-ago period. Net asset value per share stood at 45.29 Singapore cents as at Sept 30, down marginally from 45.48 Singapore cents on Dec 31, 2017.

Qian Hu has been on the Singapore Exchange's minimum trading price (MTP) watchlist since June 5, 2017. In a separate filing on Tuesday, Qian Hu said that having reviewed its options to meet the MTP exit criteria and taken into consideration factors such as tepid market conditions and global uncertainty, "it is not the appropriate time to make a decision" on the options available to it to meet the MTP exit criteria.

It said it is monitoring the situation closely "and will continue to explore all options to seek an exit" from the watchlist within 36 months from June 5, 2017, and will keep shareholders informed of the outcome of the board's review.