Qian Hu

Qian Hu: has been an underperformer for awhile and some houses have since dropped coverage on this company. 2Q12 revenue slid 5% yoy to $21.2m, while the co barely turned a profit vs $0.5m net profit last yr. Sales fell due to the decrease in contribution following the disposal of its subsidiary, Kim Kang in 4Q12, coupled with tumbling selling prices of Dragon Fish as a result of oversupply. The group is still facing challenges in 1H13, but sees steady growth in its ornamental fish revenue and profitability in 2H13. Notes China continues to be a very impt market for Qian Hu where the group enjoys robust mkt share, expanding distribution network and strong brand equity. The stock trades at 0.76x P/B. P/E is not relevant given the low profit base.