CCH Holdings Ltd

CCH Holdings Ltd is a leading specialty hotpot restaurant chain in Malaysia, specializing in chicken hotpot and fish head hotpot, with roots in George Town, Penang, Malaysia since 2015. The company operates in the catering services industry, which in Southeast Asia had a market size of US$1,827.7 million ⁴ in 2024 and is projected to reach US$2,645.1 million ⁵ by 2029, growing at a CAGR of 7.7% ⁶ from 2025 to 2029. The Malaysian specialty hotpot market specifically was US$265.1 million ⁷ in 2024 and is expected to grow to US$391.8 million ⁸ by 2029, at a CAGR of 8.1% ⁹.

The company's competitive positioning is built on strong brand identity, high-quality food featuring exclusive signature dishes, consistent operational efficiency through a central kitchen management system, strong supply chain capabilities, and a dedicated and experienced management team. Its Chicken Claypot House brand was the largest chicken hotpot brand in Malaysia in terms of number of restaurant outlets as of June 30, 2025. The specialty hotpot industry in Malaysia is highly competitive with over 800 restaurants.

CCH Holdings Ltd generates revenue primarily from its restaurant operations business, which includes company-owned restaurant operations, sales of food ingredients and condiments, and franchise licensing. Additionally, it generates revenue from leasing out buildings. The business model emphasizes a combination of company-owned and franchised outlets, supported by a centralized kitchen for consistent food quality and operational efficiency.

The company operates under two primary brands: Chicken Claypot House, specializing in chicken hotpot with its signature Special Taste Chicken Claypot, and Zi Wei Yuan, focusing on fish head hotpot with signature dishes like Fried Fish Head Charcoal Pot and Grouper Fish Head Charcoal Pot. As of the date of this annual report, the company operates or licenses a total of 27 restaurant outlets, comprising 17 Chicken Claypot House outlets, one Zi Wei Yuan outlet, two 888 Family Food Court outlets, one Bibixian outlet, four Banbudian Bistro outlets, and two Chao Liu Xian Hotpot outlets. These include 13 company-owned restaurants and 11 franchised restaurants in Malaysia, and four franchised restaurants in Thailand, Indonesia, and China.

For the year ended December 31, 2025, total revenues were US$9.59 million ¹⁰. This was composed of US$6.28 million ¹¹ from company-owned restaurant operations, US$2.22 million ¹² from sales of food ingredients and condiments, and US$0.59 million ¹³ from franchise licensing. Other revenues amounted to US$0.50 million ¹⁴. The gross profit for 2025 was US$1.85 million ¹⁵, resulting in a gross profit margin of 19.3% ¹⁶. Operating expenses totaled US$4.21 million ¹⁷, leading to an operating loss of US$2.36 million ¹⁸. Net loss for the year was US$2.68 million ¹⁹. Cash and cash equivalents stood at US$0.42 million ²⁰ as of December 31, 2025. Total current liabilities were US$4.59 million ²¹, and total non-current liabilities were US$3.01 million ²². Long-term bank loans plus accrued interests amounted to US$2.81 million ²³.

Comparing 2025 to 2024, total revenues increased by 7.6% ²⁴ from US$8.92 million ²⁵ to US$9.59 million ¹⁰. Revenues from company-owned restaurant operations decreased by 5.4% ²⁶ from US$6.64 million ²⁷ to US$6.28 million ¹¹. Sales of food ingredients and condiments saw a significant increase of 79.1% ²⁸ from US$1.24 million ²⁹ to US$2.22 million ¹². Franchise licensing revenues decreased by 12.1% ³⁰ from US$0.67 million ³¹ to US$0.59 million ¹³. Gross profit decreased by 23.1% ³² from US$2.41 million ³³ in 2024 to US$1.85 million ¹⁵ in 2025, with the gross profit margin declining from 27.0% ³⁴ to 19.3% ¹⁶. The company shifted from a net income of US$0.91 million ³⁵ in 2024 to a net loss of US$2.68 million ¹⁹ in 2025.

During 2025, the company opened a food court under the 888 Family Food Court brand in Penang, Malaysia, on June 26, 2025, and a new company-owned Chicken Claypot House outlet in Ipoh, Malaysia, on August 21, 2025. A licensing agreement was also entered into on May 20, 2025, for a master license to open Banbudian Bistro franchised outlets in Malaysia, with one new outlet opened in Penang on September 1, 2025. The company completed an IPO, issuing 1,250,000 ³⁶ ordinary shares for US$5.00 million ³⁷ and a full exercise of over-allotment option for 187,500 ³⁸ shares for US$0.75 million ³⁹. Additionally, 2,512,500 ⁴⁰ restricted shares were granted to four external consultants under the 2025 Equity Incentive Plan on October 27, 2025, resulting in non-employee share-based compensation expenses of US$2.32 million ⁴¹.

CCH Holdings Ltd plans strategic expansion in existing markets and into international locations with strong market potentials, aiming to capitalize on the projected growth of the specialty hotpot market. The market size for specialty hotpot restaurants in Southeast Asia is expected to increase at a CAGR of 7.7% ⁶ from 2025 to 2029, reaching US$2,645.1 million ⁵. Specifically, the Malaysian market is forecasted to grow at an 8.1% ⁹ CAGR to US$391.8 million ⁸ by 2029. The company also targets expansion into Vietnam, Cambodia, Indonesia, Hong Kong, Taiwan, the U.S., and the United Kingdom over the next three to five years, focusing on areas with large Asian communities.

A key growth vector is the continuous development of new menu items for its restaurant outlets, with the head chef and management team collaborating to create and refine offerings that incorporate seasonal ingredients and unique culinary techniques. This strategy aims to maintain menu innovation and customer satisfaction, although the company acknowledges challenges in keeping up with unpredictable macroeconomic conditions and consumer preferences.

The company intends to further upgrade its supply chain capabilities to enhance operational efficiency and profitability. This includes exploring collaborations with high-quality suppliers and, in the near future, developing a self-operated supply chain. The long-term goal is to acquire chicken and fish farms to ensure the availability and stability of quality raw materials, reduce costs, and improve operational efficiency.

Another strategic initiative is to identify opportunities to expand and diversify its business portfolio. This involves growing the sales of food ingredients and condiments, including pre-made soup bases, sauces, and semi-prepared food ingredients to franchised outlets and local retail distributors. The company plans to expand product offerings to include other food products like instant noodles in existing and new international markets, such as Asia and the United States. Furthermore, CCH Holdings Ltd aims to establish manufacturing facilities or factories in international locations with high product demand to lower operational costs and enhance brand influence.

The company's liquidity is a concern, as it incurred a net loss of US$2.68 million ¹⁹ in 2025 and net cash used in operating activities was US$0.53 million ⁴² for the same year. To improve liquidity and fund future investments and operations, the company plans to enlarge production to increase cash inflow from operating activities, seek financial support from credit facilities and equity financing, and improve operating efficiency and cost reduction. The company recently completed an offering of 18,000,000 ⁴³ Class A Ordinary Shares at US$0.20 ⁴⁴ per unit, generating gross proceeds of up to US$3.6 million ⁴⁵ for working capital and general corporate purposes.

CCH Holdings Ltd faces several material risks, including the crucial need for market recognition of its brands, Chicken Claypot House and Zi Wei Yuan, as any damage to reputation from negative publicity, food safety issues, or service quality could adversely impact the business. The company's financial condition is susceptible to its ability to retain existing customers and attract new ones by delivering high-quality dining experiences, which is challenged by evolving customer preferences and the highly competitive Malaysian specialty hotpot market with over 800 restaurants. Expansion plans are subject to risks such as identifying suitable locations, managing supply chains, hiring qualified employees, controlling operational costs, and obtaining necessary licenses. Profit margins are vulnerable to fluctuations in raw material costs, particularly for key ingredients like Chinese garden chicken and grouper fish, and any shortage or interruption in supply could materially affect operations. The reliance on a central kitchen means any disruption could negatively impact the business. The company's historical financial results may not be indicative of future performance, as evidenced by a net loss of US$2,731,520 ⁴⁶ in 2025, compared to net incomes of US$368,614 ⁴⁷ in 2023 and US$913,401 ⁴⁸ in 2024. The business is also exposed to macroeconomic conditions in Malaysia, including potential economic instability, inflation, and rising employment costs, with the new minimum wage in Malaysia increasing from MYR1,500 to MYR1,700 ⁴⁹ on February 1, 2025, and extending to all employers from August 1, 2025. Unforeseeable events like natural disasters, health epidemics (such as COVID-19), and political unrest could significantly disrupt operations. Compliance with increasingly stringent laws and regulations, including food safety, data privacy, and anti-corruption laws like the U.S. Foreign Corrupt Practices Act, poses ongoing challenges and potential liabilities. The company has identified material weaknesses in internal control over financial reporting, specifically a lack of sufficient financial reporting and accounting personnel with U.S. GAAP and SEC reporting knowledge, and an absence of a formal risk assessment process and internal control framework. Furthermore, the company's Class A Ordinary Shares are subject to delisting risk if it fails to comply with Nasdaq's minimum bid price requirement of US$1.00 ⁵⁰ per share, having received a notice on February 10, 2026, for closing below this threshold for 30 consecutive business days. The dual-class voting structure, where founder Goh Kok Foong beneficially owns 100% ⁵¹ of outstanding Class B Ordinary Shares, each entitled to fifty (50) votes ⁵², limits the ability of other shareholders to influence corporate matters.

Management's overall tone emphasizes strategic expansion and operational efficiency, despite acknowledging recent financial challenges. The company is committed to further expanding its restaurant network in existing markets like Malaysia and Thailand, and exploring new international markets such as Vietnam, Cambodia, Indonesia, Hong Kong, Taiwan, the U.S., and the United Kingdom, with a focus on locations with large Asian communities over the next three to five years. A key strategic priority is the continuous development of new menu items to adapt to evolving customer preferences and culinary trends. Management also plans to strengthen upstream supply chain capabilities, including exploring exclusive partnerships with and potential acquisition of chicken and fish farms, to ensure stable, high-quality raw material supply and reduce costs. Furthermore, the company aims to diversify its business portfolio by expanding sales of food ingredients and condiments, including new product categories like instant noodles, and establishing manufacturing facilities in international markets. To address liquidity concerns, management intends to enlarge production, seek additional financial support from credit facilities and equity financing, and improve operating efficiency and cost reduction. The company recently issued 18,000,000 ⁴³ Class A Ordinary Shares at US$0.20 ⁴⁴ per unit, raising up to US$3.6 million ⁴⁵ for working capital and general corporate purposes.