Caution in Trading

The Company is currently in exploratory discussions with various parties, and none of the

plans stated in the Press Release are finalised or confirmed to date. The Company will issue"

Press Release :

For Immediate Release

Oceanus mulls acquisitions in its future plans

Singapore, 12 January 2010 – SGX-listed Oceanus Group Limited (“Oceanus”), the world’s

largest land-based abalone producer, has revealed part of its plans to become a fully integrated

value chain player in the abalone industry in order to ride on the PRC’s growing consumer market.

In order to achieve its goal of full vertical integration, Oceanus is exploring the possibility of

acquiring a Taiwan-based food processing and packaging company. Oceanus hopes that an

acquisition of an established food processing and packaging company will allow the Group to

leverage on its expertise to strengthen the Group’s capability to process and package different

types of abalone-based food to customers in the PRC, Singapore, Hong Kong and Taiwan.

In the longer term, Oceanus is also on the lookout for possible collaborations with companies in

Australia to establish a source of wild-catch abalones from Australia, which are generally larger

than the breed of Japanese abalones produced in its farms in the PRC. A successful collaboration

will enable the Group to process not only its own breed of Japanese abalones but also the larger

wild abalones from Australia to offer a wider range of abalone products to its customers.

The above-mentioned plans are currently in exploratory stages. No plans have been finalised nor

confirmed to date. Investors of Oceanus shares are advised to exercise the necessary caution

and prudence with regards to such news as the negotiations might not result in any agreement

eventually.

Ah Yi Tian Xia

As part of the Company’s long term strategy to enlarge the consumer market for abalones,

Oceanus would like to aggressively expand the number of outlets of its Ah Yat Tian Xia restaurant

chain in the PRC, Singapore, Hong Kong and Taiwan. The Group hopes to increase the

economies of scale of the restaurant business by opening up to 150 new outlets over the next 2

years to cater of its increasing production volumes of abalones. The Group would like the

restaurant chain to attain a level of profits that would qualify for a separate public listing as early as

2012, as the restaurant business has a different risk profile from its abalone production and

Page 2

processing business.

While no decisions have been made in relation to any potential listing of the restaurant chain

business, the Company would consider an overseas listing in Taiwan or Hong Kong which may

have the added benefit of increasing the public profile of the Group and the restaurant chain in

those markets. Any decision on this issue will depend on many factors, including the performance

of the restaurant chain business at that time, as well as the market conditions of the respective

markets (including the Singapore market). 

Oceanus to Buy 2 Companies, Spin Off Restaurant Unit (Update2)

Jan. 11 (Bloomberg) -- Oceanus Group Ltd., the world’s largest operator of abalone farms, plans to buy two companies this year to expand its food business and sell shares of its restaurant unit as early as 2012.

Oceanus may buy a Taiwan food-packager by mid-2010 and an Australian company later in the year to boost its supply of wild abalones, Chairman Ng Cher Yew said. Ah Yat Tian Xia, its chain of restaurants, will sell shares in Taiwan or Hong Kong, he said. Oceanus stock rose by the daily limit in Taipei.

The company is expanding to ride on China’s growing consumer market as the central bank estimates the economy will grow 9 percent this year. Oceanus became the first foreign company to list shares in Taiwan last year as ties between the island and the mainland reached their warmest since the two were separated after a civil war six decades ago.

“We want to see how we can basically acquire at least one Taiwanese packaging and processing entity and look at the Chinese market,” Ng, 50, said in a Jan. 8 interview in Taipei. The Taiwan listing “gives us a better profile with the government and an image in the market that will help the business.”

The company is based in Singapore, while its operations are mainly in China, where 137.9 million abalones are grown in 24,000 tanks along the country’s southern coast.

Stock Surges

Oceanus stock surged by the 7 percent daily limit to NT$12.30 at the close of Taipei trading, increasing the advance to 29 percent since the Taiwan depositary receipts were sold at NT$9.5 apiece in December. The benchmark Taiex index has added 2.6 percent since then. The shares in Singapore are unchanged today, and 7.7 percent since the Taipei listing on Dec. 31.

“The proposed acquisition would help the company save costs and increase profit,” said Monika Yang, who helps oversee $2 billion at Hamon Asset Management Ltd. in Hong Kong. “Investors probably heard about the listing plan and are positive about it.”

Oceanus has 20 restaurants in markets including Singapore and China, according to Ah Yat’s Web site. The company aims to increase the number to 170 next year, with at least 120 on the mainland, Ng said.

The restaurant business may be worth as much as 2 billion yuan ($293 million) in two years, said Jeffrey Lau, an analyst at Polaris Capital (Asia) Ltd. in Hong Kong.

“It will be positive for Oceanus, as investors are in favor of Chinese catering companies,” Lau said.

Oceanus is considering the listing in Hong Kong or Taiwan because of demand for abalones from consumers in the two markets, Ng said. The restaurant chain may become profitable by the end of the year, said Ng, declining to give details.

“The restaurant has a different risk profile, so eventually if it’s independent, it makes more sense,” Ng said.





--Editors: Linus Chua, Reinie Booysen