Qian Hu Reports 1.6% Revenue Growth and Net Profit of $357,000 for FY2024

Financial Analysis of Qian Hu Corporation – Net Profit Growth of \$357,000

1. Executive Summary

The financial report of Qian Hu Corporation for the fiscal year ending December 31, 2024, reveals a net profit of \$357,000, a significant improvement from the net loss of \$9.28 million in FY2023. This analysis evaluates the company’s business operations, financial performance, risks, and opportunities to determine its investment potential.

2. Business Description

Founded in 1998 and listed on the Singapore Exchange, Qian Hu Corporation is a leading integrated fish-related business service provider. The company operates in three key business segments:

Fish Business: Export and breeding of ornamental fish, with operations supported by advanced systems like Recirculating Aquaculture Systems (RAS) and Aqua Ring Technology (ART).
Water Accessories & Pet Products: Sales of aquarium equipment, pet food, and related products.
Plastic Products: Manufacturing and sales of plastic goods, focusing on sustainable and profitable product lines.

The company has a global reach, exporting to various markets, with key operations in Singapore, Malaysia, and China.

3. Industry Position

Qian Hu is a prominent player in the ornamental fish and pet supplies industry, which faces competition from regional and international players. The company’s competitive edge lies in its focus on sustainability, proprietary technologies (RAS and ART), and diversified revenue streams.

4. Revenue Streams and Financial Performance

Qian Hu’s revenue streams are evenly diversified among its business segments:

Fish Business: FY2024 revenue increased by 6.1% to \$29.32 million, driven by higher export demand and strong sales of aquaculture products.
Water Accessories & Pet Products: Revenue declined by 1.8% to \$34.03 million due to reduced global purchasing power, though profitability surged due to compensation from land requisition and inventory optimization.
Plastic Products: Revenue remained stable at \$8.06 million, with an 18.9% increase in profitability due to a shift toward higher-margin products.

5. Financial Analysis

Income Statement

The company reported a 1.6% increase in total revenue to \$71.42 million in FY2024. Net profit rebounded to \$357,000 from a \$9.28 million loss in FY2023, driven by improved operational efficiency and one-time compensation income.

Balance Sheet

As of December 31, 2024, Qian Hu reported a healthy cash position of \$14.6 million, providing financial stability for future growth initiatives.

Cash Flow Statement

While detailed cash flow information isn’t provided in the report, the strong cash reserves indicate prudent financial management.

Dividend

Qian Hu has proposed a final dividend of \$0.004 per share, pending approval at the April 3, 2025, shareholder meeting.

6. Key Strengths

Strong rebound in profitability, with a net profit of \$357,000.
Innovative aquaculture technologies (RAS and ART) supporting growth in fish business.
Diversified revenue streams mitigating risks from downturns in specific segments.
Strong cash reserves of \$14.6 million to support expansion and innovation.
Proposed dividend payout signals confidence in future performance.

7. Risks

Decline in water accessories and pet products sales due to weakened global purchasing power.
Economic uncertainty and potential trade barriers (e.g., U.S. trade policies).
Dependence on regional markets like Southeast Asia for growth, which may limit diversification.

8. Special Initiatives

Qian Hu is actively pursuing several initiatives to enhance profitability, including:

Expanding fish farming operations in Malaysia to meet growing demand for seafood.
Collaborating with N&E Innovations to launch eco-friendly pet products in 2025.
Exploring new markets such as Indonesia and focusing on high-margin product lines.

9. Investment Recommendations

For Current Shareholders

Hold the stock. With its profitability rebound, strong cash position, and proposed dividend payout, the company shows potential for continued growth. However, monitor external economic conditions closely.

For Potential Investors

Consider a modest investment. The company’s innovative technologies, diversified revenue streams, and focus on sustainability provide long-term growth opportunities. However, weigh the risks posed by global economic uncertainties.

10. Disclaimer

This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence or consult a financial advisor before making investment decisions.