HE Group Berhad: Key Shareholder Proposals for 2026 AGM

Overview

HE Group Berhad has issued a comprehensive circular to shareholders ahead of its Third Annual General Meeting (AGM), scheduled for 19 June 2026. The Board is seeking approval for two major proposals:

• Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions (RRPTs)
• Authority for Share Buy-Back of up to 10% of Issued Shares

Key Points for Investors

• AGM Details: The meeting will be held at Greens III Sports Wing, Tropicana Golf & Country Resort, Petaling Jaya, Selangor, at 10:00 a.m. on 19 June 2026.
• Proxy Voting: Shareholders unable to attend may appoint proxies via hard copy or electronic submission, ensuring participation in crucial voting.
• Materials: The AGM notice, Proxy Form, Administrative Notes, and the Circular are available on the company’s website and Bursa Malaysia’s website.

Detailed Breakdown of Proposals

1. Proposed Renewal of Shareholders’ Mandate for RRPTs

The company routinely engages in transactions with related parties necessary for day-to-day operations. This renewal allows HE Group to continue such transactions without convening a separate general meeting for every RRPT, thus streamlining operations and reducing costs.

Key RRPTs Identified

• Supply of Electrical Products and Retrofitting Services to Simosynergy Sdn. Bhd.
  • Estimated value: RM2,000,000
  • Actual value transacted since last AGM: Nil
  • Interested parties: HEC (Hexatech Energy Consolidated) and Datuk Wira Yong Chong Cheang
• Purchase of Switchgear from Simosynergy
  • Estimated value: RM6,000,000
  • Actual value transacted since last AGM: RM131,000
• Rooftop Rental from Simosynergy
  • Purpose: Installation of Solar PV system for renewable energy generation
  • Estimated value: RM24,000 (for 3 years)
  • Actual value transacted: RM20,000

Review and Safeguards

• All RRPTs will be conducted at arm’s length and on terms not more favourable to related parties than those available to the public.
• Regular review by Audit and Risk Management Committee (ARMC).
• Interested shareholders must abstain from voting.
• Annual disclosure of aggregate RRPT values in the company’s annual report.

Potential Impact

• Efficiency: Eliminates need for ad hoc EGMs and expedites business transactions.
• Transparency: Annual disclosures and regular reviews safeguard minority interests.
• Shareholder Value: Streamlined operations may positively affect profitability and share price if RRPTs are value-adding.

2. Proposed Share Buy-Back Authority

HE Group is seeking authority to buy back up to 10% of its issued shares (up to 44,000,000 shares based on current issued share capital of 440,000,000 shares). The buy-back can be funded by retained profits (currently RM46.83 million) or external borrowings.

Key Details

• Buy-Back Price: Not more than 15% above the weighted average market price for the five market days preceding the purchase.
• Treatment of Purchased Shares:
  • Shares may be cancelled, retained as treasury shares, resold, transferred under an employee scheme, used as purchase consideration, or distributed as share dividends.
• Potential Impacts:
  • Earnings Per Share (EPS): Buy-back and cancellation of shares will increase EPS, potentially supporting share price.
  • Net Assets (NA): NA decreases if shares are retained as treasury shares or cancelled above NA per share; increases if treasury shares are resold at a gain.
  • Working Capital: Buy-backs reduce cash and working capital; careful funding required.
  • Dividends: No direct impact, but treasury shares may be distributed as share dividends.
  • Shareholding Spread: Buy-back will be conducted ensuring compliance with Bursa Malaysia’s 25% public shareholding spread requirement (currently 52.26%).
  • Mandatory General Offer Risk: The buy-back will be managed to avoid triggering a mandatory takeover offer under the Malaysian Code on Take-Overs and Mergers.
• Historical Share Price:
  • 12-month range: RM0.200 to RM0.460
  • Last traded price as at LPD (1 April 2026): RM0.305

Board Statement & Recommendation

• The Board recommends shareholders vote in favour of both proposals, considering their potential to enhance operational efficiency, shareholder value, and market perception.
• Interested parties will abstain from voting, and all procedures are in place to safeguard minority interests.

Important Information for Shareholders

• Both proposals could materially impact share value, especially the share buy-back, which has historically been seen as price-supportive.
• Approval of RRPTs ensures continued business with key partners, which could affect revenue and profitability.
• No material contracts or litigation affecting the group as at the latest practicable date.
• Documents for inspection are available at the registered office up to and including the date of the AGM.

Conclusion

The upcoming AGM is significant for HE Group Berhad shareholders. Approval of the RRPT mandate and share buy-back authority could improve operational agility, support share price, and enhance investor returns. However, shareholders should assess the impact of these moves, especially in terms of capital allocation and the company’s ability to maximize value from RRPTs and treasury share management.

Disclaimer

This article is intended for informational purposes only and does not constitute financial advice or a recommendation to buy or sell shares in HE Group Berhad. Investors should conduct their own due diligence and consult professional advisors before making investment decisions.

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