Qian Hu Corporation, the hobby fish breeder and seller of over 1,000 varieties and species, is making good progress in its aquaculture business venture.
Today, Qian Hu has two edible fish farms totalling 10,000 sqm by land area on Hainan island. One farm rears and exports grouper fingerlings while the other rears and exports shrimp.
As the farms are inland, they are not subjected to the risks of fish farming that accompanies sea-based methods. Qian Hu says its seafood is antibiotic free as the group uses its own proprietary herbal-based medication and high quality fish feed.
Qian Hu Aquaculture (Hainan) occupies a land area of 6,000 sqm and has 102 tanks. The land lease for this farm is 20 years and the farm was completed and opened on Jun 18, 2017. This farm’s main business is the farming of grouper fingerlings and trading of various fish varieties. Currently, this farm is also trialing coral trout farming.
Tian Tian Fisheries (Hainan) Co occupies a land area of 4,000 sqm and has 104 tanks. This farm has a two-year land lease. Qian Hu is exploring shrimp hatchery as well as lobster farming here. It is experimenting to determine the optimal land-based model for lobster growing.
Qian Hu believes there could be business opportunities in providing the needed expertise and consumables to local farmers if its model farm is successful and if local farmers convert from the current snail farming to lobster rearing.
Last year, Executive Chairman and MD Kenny Yap announced the ornamental fish breeder and exporter was venturing into aquaculture over the next few years and aims to build up its aquaculture business to be many times bigger than its existing businesses.
Citing research from the World Bank, Yap believes the production of edible fish on a global scale will continue to expand over the next decade, and that countries in Southeast Asia are slated to be the main producers.
Qian Hu trades at an 69 times FY17 earnings and 0.44 times FY17 book value, according to CGS-CIMB. Historical dividend yield is 1.0% while historical ROE was 0.64%. The group’s historical net gearing is 0.11 times.
Year to date, shares in Qian Hu have remained flat at 20 cents.