DEVELOPING a hobby into a lucrative business and having that company listed on the second board of the KLSE is a feat. What's interesting is that the venture involved ornamental fish breeding, unlike the more popular technology or manufacturing-related businesses of companies seeking listing on the KLSE.
Xian Leng Holdings Bhd founder and managing director Ng Huan Tong strongly believes that ornamental fish business is a big money spinner despite the general perception that this business usually resides in aquarium shops or small family-run outfits.
Not satisfied with its current second board listing, Xian Leng is eyeing a main board listing and has proposed a 1-for-2 bonus issue involving issuance of 24.14 million new Xian Leng shares, and an employees’ share option scheme.
“The move to the KLSE main board will increase our prestige and enable us to attract more institutional investors,” he told Starbiz at the Xian Leng fish farm in Batu Pahat.
Most of Xian Leng's fishes are exported. The main export market for Xian Leng's arowanas are Japan, Taiwan, Hong Kong, China, the Philippines, Singapore, Britain, Canada and Switzerland.
The company's 50ha fish farm breeds around 10,000 top grade arowanas a year. “We want to leverage on our advantage, as one of the few licenced arowana breeders in the country and the world, to expand into the international market where we can command higher prices,” he said, adding that the international arowana business was still not fully tapped.
The highly popular and prized Asian arowanas constitute 90% of the company's fishes and only 10% are sold locally. Xian Leng's main business is the captive breeding of this arowana, also known by the Chinese as the dragon fish. A three-month old arowana could easily fetch wholesale prices between US$50 to US$2,500 depending on the variant.
The company was among selected local breeders to obtain a licence from the Swiss-based Convention on Trade of Endangered Species (Cites) to breed and export arowanas. “To obtain such a licence is not easy as there are many conditions which breeders have to comply with,'' Ng said.
Other “good luck” or feng shui fishes bred by Xian Leng include the well-known Japanese carp (koi) and the increasingly popular flower horn fish.
The sudden demand for flower horn fishes early last year had caused the prices for the specie to surge upward. In fact, an investment portal attributed Xian Leng's strong pre-tax profit of RM6.1mil on revenue of RM13.7mil from May to July 2002 to the local frenzy for flower horn fishes.
However, the portal added that the company's pre-tax profit and turnover had dipped to RM4.4mil and RM11.3mil respectively in the following quarter from August to October 2002 as low entry barriers for the rearing of flower horns had caused the supply of the specie to increase and hence, their prices to dip.
Ng said Xian Leng had not gone into full-scale flower horn breeding yet as their popularity was only restricted to Malaysia and their appeal in the international market had not fully matured.
“Also, since flower horns are not classified as endangered species, they can be easily exported,” he said, adding that the flower horn may not enjoy a niche market status like the arowana.
As such, the company is back to its core business of breeding arowana which still has lucrative domestic and overseas markets.
The company would also seriously venture into the koi business which has been receiving renewed interest from hobbyists.
“With the growing interest in having koi ponds in homes and offices, as related to good feng shui, we are confident that the koi business will continue to expand,” he said.
Xian Leng executive director C. S. Chua said the company would concentrate on breeding top end Japanese koi which have richer colours and fetch premium prices.
To further increase the popularity of ornamental fishes in the country, Chua said the company had entered into an agreement with Wet World in Shah Alam to set up a RM5mil aquarium at their premises.
Xian Leng's innovation in the breeding of arowana leading to the development of lucrative export-oriented business has earned the company the Enterprise 50 award for 1999 and 2000.
The company has also won the Export Excellence award 2000 from International Trade and Industry Ministry in 2000 and was the recipient of the Asia Pacific International Honesty Enterprise Keris award 2002.