Excerpts from NRA Capital's report

Analyst: Liu Jinshu

KennyYap youtube3.14Kenny Yap, executive chairman of Qian Hu. Photo: YoutubeQian Hu share price has increased from 9.9 cents on 9 January to 12.2 cents on 13 January and to a high of 18 cents today against FY16 EPS of 0.06 cents.

Based on the last done price of 17 cents, it still trades at just 0.38x P/BV against a NAV per share of 44.48 cents. Adding back depreciation and amortisation of S$1.85m, Qian Hu actually has a positive EBITDA of S$2.18m in FY16, translating to an EV/EBITDA multiple of 12.9x.


New businesses to drive growth in 2017.  
Qian Hu is entering into the edible fish business in PRC and the genetic breeding of albino dragon fish for the ornamental fish business.

What’s the big deal?
The edible fish market is significantly larger than that of ornamental fish, in terms of volume. In December, Qian Hu entered into a joint venture via 51% owned Qian Hu Aquaculture (Hainan) Co., Ltd with a registered capital of approximately S$1.2m.
grouper fish
This JV co will operate a farm of land area 0.4 hectares with a tenure of 16.5 years on Hainan island. As a start, the farm will breed grouper fish targeted at the PRC market.

Building a differentiated business. Based on our interpretation, the idea is that Qian Hu’s proprietary filtration technology HYDROPURE and its fish nutrition know-how will allow it to breed fish with higher survival rates.

Meanwhile, its local partner will provide herbal medication expertise to grow fish without the use of antibiotics, thus differentiating itself from other fish farmers. We expect contribution from early 2018. If successful, the model can be expanded to e.g. shrimps for the south east Asia market.

Genetic breeding of Albino Dragon fish. This is a five-year project that Qian Hu has been undertaking and the company has started breeding Albino Silver Arowana in late 2016. Ornamental fish is a billion-dollar market of which Qian Hu has 5% market share.

Rare fishes can fetch top dollar. In 2014, an albino dragon fish was sold for RMB0.88m (S$0.18m) at an exhibition in Shanghai. Therefore, the ability to breed unique varieties of Arowana will allow the company to increase the value of its products.

You may also be interested in:


You have no rights to post comments

Counter NameLastChange
AEM Holdings2.3800.080
Avi-Tech Electronics0.265-
Best World1.7100.010
Broadway Ind0.095-0.001
China Sunsine0.390-
ComfortDelGro1.3700.010
Delfi Limited0.9400.010
Food Empire1.4300.010
Fortress Minerals0.260-0.020
Geo Energy Res0.355-0.005
GSS Energy0.027-
Hong Leong Finance2.4800.010
Hongkong Land (USD)3.060-0.090
InnoTek0.440-
ISDN Holdings0.320-
ISOTeam0.035-
IX Biopharma0.0460.005
Jiutian Chemical0.024-
KSH Holdings0.250-
Leader Env0.050-
Medtecs Intl0.1320.001
Nordic Group0.335-
Oxley Holdings0.0910.001
REX International0.138-0.008
Riverstone0.6700.005
Sinostar PEC0.135-
Southern Alliance Mining0.600-
Straco Corp.0.500-
Sunpower Group0.220-
The Trendlines0.085-
Totm Technologies0.021-
Uni-Asia Group0.800-0.015
Wilmar Intl3.330-0.030
Yangzijiang Shipbldg1.770-0.010
 

We have 1288 guests and one member online

rss_2 NextInsight - Latest News