Company: CCHH
Filing Date: 2025-06-26
Form Type: DRS
Source: 0001213900-25-058036
Chunk: 28

Company: CCH Holdings Ltd
Filing Date: 2025-06-26
Form: DRS
Chunk 28
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 in duties and taxes detrimental to our business could materially and adversely affect our business, prospects, financial condition and results of operations. Our business is heavily dependent on the macroeconomic conditions of Malaysia, the overall economic growth of which could adversely affect our business. The catering services industry in Malaysia is affected by macro -economicfactors, including changes in international, national, regional and local economic conditions, employment levels, visitor arrivals and spending power of our target customers. Any global financial crisis, global or regional political and economic instability, wars, terrorism, civil unrest, deterioration of the economy in Malaysia, decrease in disposable income of consumers, fear of a recession and decrease in consumer confidence may lead to a reduction in the number of customer visits and average spending per customer at our restaurant outlets. In addition, if inflation were to significantly increase our business costs, our financial condition and results of operations may be adversely affected. These macroeconomic factors could also affect the ability of our current or potential suppliers to produce or supply materials or services relevant to our business. Our licensees may also have a reduced ability to fulfill their obligations under their contractual arrangement to us, or even remain in business. If they are unable to perform their contracts with us, we may experience significant disruption in business, which reduces our revenues and profitability. Rising employment costs in Malaysia could further affect our financial position. According to Frost & Sullivan, salary levels of employees in the catering services industry in Malaysia have been on the rise in recent years. During the two years ended December 31, 2023 and 2024, our staff costs amounted to approximately US$2.4 million and US$2.0 million, respectively, representing approximately 32% and 30% of our total cost of revenues, respectively. In addition, on February 1, 2025, the new minimum wage in Malaysia has increased from MYR1,500 to MYR1,700, which applies to employers with five or more employees and those involved in professional activities as defined by the Malaysia Standard Classification of Occupations 2020 (“MASCO”), regardless of the number of employees. Starting from August 1, 2025, such minimum wage will extend to all employers, regardless of the number of employees they have. This rise in salary level, our staff costs would likely increase as a result. As wages increase, competition for qualified employees also increases, which may indirectly result in further increase in our staff costs, which in turn would materially affect our business and results of operations adversely. Unforeseeable events