F-1: CCH Holdings Files F-1 for Nasdaq IPO, Eyes Expansion

CCH Holdings Ltd, a leading Malaysian specialty hotpot chain, has filed an F-1 registration statement for an initial public offering on the Nasdaq Capital Market to fund its ambitious expansion plans across Southeast Asia and internationally.

Summary

• CCH Holdings Ltd, established in 2015, is Malaysia's third-largest specialty hotpot restaurant chain by revenue in 2024, operating primarily under the 'Chicken Claypot House' and 'Zi Wei Yuan' brands.
• The company currently operates or licenses 32 restaurant outlets, including 15 company-owned and 13 franchised in Malaysia, and 4 franchised internationally (Thailand, Indonesia, China).
• Total revenues decreased by 8.8% from US$9.78 million in 2023 to US$8.92 million in 2024, primarily due to a significant sales decrease in five company-owned restaurants, two of which were closed in H2 2024.
• Despite the revenue decline, net income increased substantially by 147.8% from US$0.37 million in 2023 to US$0.91 million in 2024, driven by cost optimization in standardized operations and reduced marketing expenses.
• Gross profit margin improved from 22.6% in 2023 to 27.0% in 2024, reflecting better cost control in materials, payroll, and repairs/maintenance.
• The company plans to use IPO net proceeds for restaurant network expansion (40%), brand building and marketing (30%), diversification of peripheral food products (20%), and general corporate purposes.
• Mr. Goh Kok Foong, founder and CEO, will remain a controlling shareholder with over 50% voting power post-IPO, making the company a 'controlled company' under Nasdaq rules.
• The specialty hotpot market in Southeast Asia is projected to grow at a CAGR of 7.7% from 2025 to 2029, reaching US$2,645.1 million, with strong growth also expected in Hong Kong, Taiwan, and the U.S.

Sentiment

Score: 7

Explanation: The filing presents a company with strong growth ambitions and improving profitability metrics (net income, gross margin) despite a slight revenue dip. The IPO is a clear positive for capital access. However, significant risks are highlighted, including intense competition, reliance on related parties, and internal control weaknesses, which temper the overall positive sentiment.

Positives

• Net income significantly increased by 147.8% from US$0.37 million in 2023 to US$0.91 million in 2024.
• Gross profit margin improved from 22.6% in 2023 to 27.0% in 2024, indicating effective cost control and operational efficiency.
• Selling and marketing expenses decreased by 46.5% from US$0.49 million in 2023 to US$0.26 million in 2024 due to optimization of marketing activities.
• Franchise licensing revenues increased by 118.7% from US$0.31 million in 2023 to US$0.67 million in 2024, driven by international expansion in Thailand and China.
• The company is recognized as the third-largest specialty hotpot restaurant chain in Malaysia by revenue in 2024 and 'Chicken Claypot House' is the largest chicken hotpot brand by outlets as of June 30, 2025.
• Strong supply chain capabilities and central kitchen management contribute to consistent food quality and operational efficiency.
• The company has an experienced management team with over 15 years in the F&B industry, including award-winning entrepreneurs.

Negatives

• Total revenues decreased by 8.8% from US$9.78 million in 2023 to US$8.92 million in 2024.
• Revenues from company-owned restaurant operations decreased by 19.1% from US$8.21 million in 2023 to US$6.64 million in 2024, partly due to closing two outlets and domestic economic instability.
• Net cash used in operating activities was US$0.30 million in 2024, a significant shift from US$0.03 million provided in 2023.
• Cash and cash equivalents decreased from US$1.09 million in 2023 to US$0.55 million in 2024.
• Identified two material weaknesses in internal control over financial reporting: lack of sufficient U.S. GAAP/SEC reporting personnel and lack of a formal risk assessment process/IT general controls.
• Significant related party transactions, including loans to and from related parties, and substantial amounts due from related parties (US$2.70 million in 2024), raise potential conflict of interest concerns.

Risks

• Market recognition of brands is crucial, and any damage to reputation could adversely impact business.
• Inability to retain existing customers or attract new ones by delivering high-quality dining experience could materially and adversely affect financial condition and business operations.
• Continued success depends on the ability to react to evolving customer preferences.
• May not be successful in expanding the network of restaurant outlets due to challenges in identifying suitable locations, managing supply chain, hiring, controlling costs, and obtaining licenses.
• May need to obtain additional financing for expansion, and failure to do so could adversely affect growth.
• Historical financial and operating results may not be indicative of future performance, and historical profitability levels may not be sustained.
• Any shortage or interruption in supply of key raw materials (e.g., Chinese garden chicken, grouper fish) could have a material adverse effect.
• Profit margins and operating results are susceptible to fluctuations in the costs of raw materials.
• Reliance on a central kitchen means a significant disruption in its operations could negatively impact the business.
• Food safety concerns and health risk perceptions of food offerings may adversely affect the business.
• The specialty hotpot restaurant market in Malaysia is highly competitive, and failure to compete successfully could adversely affect the business.
• Lack of new suitable locations on commercially viable terms, or increases in rental costs, or inability to renew existing tenancy agreements could affect the business.
• Results of operations may fluctuate due to seasonality.
• Expanding geographic reach into new jurisdictions may lead to increasing risks and uncertainties, and management systems may not be effective to address them.
• May not be able to collect all accounts receivable, exposing the company to credit risk.
• Transactions with related parties present possible conflicts of interest that could adversely affect business and results of operations.
• Any failure of the information technology system (POS system) could interrupt operations and adversely affect the business.
• Reliance on third-party payment methods subjects the company to payment-related risks.
• May be unable to detect, deter, and prevent all instances of fraud or other misconduct by employees, suppliers, or third parties.
• May be involved in claims or proceedings related to proprietary know-how or intellectual property, including recipes, which could harm brand value.
• Engagement with key personnel is pivotal, and loss of their services or inability to manage growing operations could adversely affect the business.
• Insurance coverage may be insufficient to protect against potential liabilities.
• Fluctuations in exchange rates (MYR to USD) could have a material and adverse effect on results of operations.
• Rising interest rates could negatively impact performance and restaurant expansion plans.
• Adverse changes in political, economic, legal, regulatory, taxation, or social conditions in operating jurisdictions could have a material adverse effect.
• Business is heavily dependent on Malaysia's macroeconomic conditions, and overall economic growth could adversely affect the business.
• Rising employment costs in Malaysia could further affect the financial position.
• Unforeseeable events such as natural disasters, health epidemics (e.g., COVID-19), acts of war, or political unrest could significantly disrupt business operations.
• May become subject to increasingly stringent laws, regulations, standards, and policies, and any failure to comply could harm reputation and subject to fines.
• Failure to comply with data privacy, data protection, and cybersecurity laws and regulations could have a material adverse impact.
• May be exposed to liabilities under the Foreign Corrupt Practices Act and anti-corruption/anti-money laundering laws.
• The market price of ordinary shares may be volatile or decline regardless of operating performance, potentially resulting in significant losses.
• As a controlled company, reliance on exemptions from certain Nasdaq corporate governance requirements may afford less protection to shareholders.
• As an emerging growth company, reduced reporting requirements may make ordinary shares less attractive to investors.
• As an exempted company with limited liability incorporated in the Cayman Islands, home country practices in corporate governance may differ from Nasdaq rules, affording less protection to shareholders.
• Future issuances or sales of substantial amounts of ordinary shares could materially and adversely affect the prevailing market price.
• Short selling may drive down the market price of ordinary shares.
• May not expect to pay dividends in the foreseeable future, so investors may rely on price appreciation for a return.
• As a holding company, depends on subsidiaries to distribute funds to make dividend payments or satisfy financial obligations.
• Public offering price is substantially higher than net tangible book value per ordinary share, resulting in immediate and substantial dilution for new investors.
• Must rely on management's judgment for use of net proceeds, which may not produce income or increase share price.
• No assurance of not being a Passive Foreign Investment Company (PFIC) in any taxable year, which could result in significant adverse U.S. federal income tax consequences to U.S. investors.
• Controlling Shareholder has substantial influence, and interests may not align with other shareholders.
• May face difficulties in protecting interests and enforcing rights through U.S. courts due to incorporation under Cayman Islands law and operations in Malaysia.
• Exclusive forum provision in A&R Company Listing Articles could limit shareholders' ability to obtain a favorable judicial forum for disputes.
• Anti-takeover provisions in A&R Company Listing Articles could have a material adverse effect on shareholder rights.
• Failure to implement and maintain an effective system of internal controls may lead to inaccurate reporting or fraud, affecting investor confidence and share price.
• Lack of management team experience as officers of publicly-traded companies may hinder compliance with Sarbanes-Oxley Act.
• Future financing may cause dilution or place restrictions on operations.

Future Outlook

CCH Holdings plans strategic expansion in existing markets like Malaysia and Thailand, and into new international locations such as Vietnam, Cambodia, Indonesia, Hong Kong, Taiwan, and the U.S. over the next three to five years, focusing on areas with large Asian communities. The company also intends to continuously develop new menu items, further upgrade its supply chain capabilities, and identify opportunities to diversify its business portfolio, including expanding peripheral food products and potentially establishing overseas manufacturing facilities. The specialty hotpot market in Southeast Asia, Hong Kong, Taiwan, and the U.S. is projected to experience significant growth, providing a favorable environment for these expansion plans.

Management Comments

• We are committed to providing the most authentic Sichuan hotpot experience with Hong Kong style chicken hotpot traditions, to suit the discerning Malaysian palate.
• With our established brands in specialty hotpot and exclusive signature dishes that are well received by customers, we are committed to further expanding our reach in Malaysia and beyond.
• We have been actively but also prudently expanding the network of our restaurant outlets in Malaysia.
• We are also poised for strategic expansion into other locations in Southeast Asia, such as Vietnam, Cambodia and Indonesia, as well as other international locations with significant growth potentials such as Hong Kong, Taiwan and the U.S.
• We believe that our expanding network of restaurant outlets will enhance our brand image, attract more consumers and franchise partners, reduce consumer acquisition costs, promote brand loyalty, and in turn increase sales.
• A growing scale will also enable us to gain more bargaining power over suppliers, which we believe will further lower our costs and expenses as a percentage of our net revenues.
• We are dedicated to continuously improving our negotiating powers with suppliers and reducing procurement costs through bulk purchasing of ingredients and supplies, with the aim to lower overall food costs and enhanced profitability through competitive pricing.
• We trust that our management team's collective experience, the ability to work as a collaborative team and ultimately, and the ability to effectively implement our business philosophy, are critical to our success and will continue to contribute to our growth and expansion.

Industry Context

The specialty hotpot restaurant market in Malaysia is highly competitive and fragmented, with over 800 operators, yet CCH Holdings has secured a top-three position. The broader Southeast Asian catering services industry is undergoing a structural transformation, with a projected CAGR of 5.7% from 2025-2029. The specialty hotpot segment specifically is expected to grow at an impressive 8.1% CAGR in Malaysia and 7.7% in Southeast Asia, driven by rising affluence, diverse demographics, and social media influence. CCH Holdings' focus on authentic Sichuan and Hong Kong-style hotpot, coupled with strategic expansion and supply chain optimization, positions it to capitalize on these trends, especially in regions with strong Asian communities like Hong Kong, Taiwan, and the U.S., where hotpot demand is also surging.

Comparison to Industry Standards

• CCH Holdings is ranked as the third-largest specialty hotpot restaurant chain in Malaysia in terms of revenues generated by company-owned restaurants for the year ended December 31, 2024, with a market share of 2.5%.
• The '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 market in Malaysia grew at a CAGR of 2.3% from 2019-2024, and is expected to grow at 8.1% from 2025-2029. CCH Holdings' growth strategies align with this expanding market.
• The broader Southeast Asia specialty hotpot market grew at a CAGR of 2.8% from 2019-2024 and is projected to grow at 7.7% from 2025-2029, indicating CCH Holdings' international expansion targets are in high-growth markets.
• The company's gross profit margin improved from 22.6% to 27.0% between 2023 and 2024, suggesting strong operational efficiency in a competitive market, potentially outperforming some competitors in cost control.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not currently a party to, and is not aware of any threat of, any legal or administrative proceedings that are likely to have any material and adverse effect on its business, financial condition, cash flow, or results of operations as of the date of the prospectus.

Related Party Transactions

• Sales of food ingredients and condiments to related parties: US$1,190,290 in 2023 and US$1,190,368 in 2024. Notable transactions include sales to entities controlled by Mr. Goh Kok E and Mr. Goh Kok Foong (e.g., CCH Ipoh, CCH F&B, CCH Alor Setar, Kopitan Classic, BBDM).
• Franchise licensing income from related parties: US$1,190,290 in 2023 and US$1,190,368 in 2024. Significant income from Zi Wei Yuan (Shen Zhen) Hotpot Restaurant Co., Ltd (controlled by Mr. Goh Kok E).
• Loans to related parties: Historically provided interest-free, on-demand loans to Mr. Goh Kok Foong (US$488,920 outstanding as of Dec 31, 2024, settled in June 2025) and Mr. Goh Kok E (US$500,432 outstanding as of Dec 31, 2024, settled in June 2025) for personal uses.
• Long-term interest-free credit facilities provided to Zi Wei Yuan (Shen Zhen) Hotpot Restaurant Co., Ltd (US$489,274 outstanding as of Dec 31, 2024, due Aug 1, 2028) and Abang Adek Holdings Sdn. Bhd. (US$238,617 outstanding as of Dec 31, 2024, due July 16, 2027), both controlled by Mr. Goh Kok E.
• Capital injections made to related parties in 2024, including CCH KCH (US$87,437), CCH Sabah (US$30,603), and CCH Tasty (US$17,487).
• Amounts due from related parties (current) totaled US$2,697,519 as of December 31, 2024, including significant amounts from ZWY Shenzhen, CCH Ipoh, CCH Alor Setar, Kopitan Classic, and CCH F&B.
• Amounts due to related parties (current) totaled US$177,075 as of December 31, 2024, including amounts to Kopitan Food, Mr. Goh Kok Foong, and BBDM.

Stakeholder Impact

• Shareholders: Potential for dilution from the IPO, reliance on price appreciation as no dividends are expected, and reduced corporate governance protections due to controlled company and foreign private issuer status. Controlling shareholder's interests may not always align with minority shareholders.
• Employees: Rising employment costs in Malaysia could impact staff costs, but the company's cost optimization efforts may mitigate this. The 2025 Equity Incentive Plan aims to attract and retain key personnel.
• Customers: Expansion plans aim to increase reach and brand image. Continuous menu development and consistent food quality through central kitchen management are intended to enhance customer satisfaction. Food safety concerns or decline in dining experience could negatively impact customer traffic.
• Suppliers: Strong supply chain capabilities and bulk purchasing aim to maintain stable competitive prices. However, reliance on specific suppliers for key ingredients and potential disruptions could affect operations.
• Creditors: Increased debt financing for expansion could result in increased fixed obligations and operating covenants, potentially affecting the company's financial flexibility.

Next Steps

• Complete the initial public offering (IPO) and list ordinary shares on the Nasdaq Capital Market under the symbol CCHH.
• Expand the restaurant network in existing markets (Malaysia, Thailand) and new international locations (Vietnam, Cambodia, Indonesia, Hong Kong, Taiwan, U.S., UK) over the next three to five years.
• Continuously develop new menu items for restaurant outlets.
• Further upgrade supply chain capabilities, including exploring exclusive business partnerships with chicken and fish farms and potentially acquiring such farms in the long run.
• Diversify business portfolio by expanding product offerings (e.g., instant noodles) and establishing manufacturing facilities in international locations with high demand.
• Recruit staff with U.S. GAAP knowledge and establish ongoing training for financial reporting and accounting personnel to address material weaknesses in internal controls.
• Set up a formal internal control framework, appoint independent directors, establish an audit committee, and strengthen corporate governance.
• Develop a group-wide risk assessment process and strengthen IT general controls.

Key Dates

Keywords

Hotpot Restaurant, Malaysian Cuisine, Restaurant Chain, IPO, Nasdaq, Food & Beverage, Franchising, Southeast Asia Expansion, Sichuan Hotpot, Chicken Claypot House, Zi Wei Yuan, Emerging Growth Company, Controlled Company, SEC Filing, F-1 Registration