Rapid Synergy Berhad Seeks Shareholders’ Approval for New Mandates: Key Details for Investors

Overview

Rapid Synergy Berhad (“Rapid” or “the Company”) has issued a Circular to Shareholders dated 30 April 2026, seeking approval at its upcoming 30th Annual General Meeting (AGM) for two significant resolutions:

• Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions (RRPTs) of a Revenue or Trading Nature
• Proposed Renewal of Authority for the Company to Purchase Its Own Shares (Share Buy-Back Authority)

These resolutions will be tabled as Special Business at the 30th AGM to be held on 19 June 2026.

1. Proposed Shareholders’ Mandate for RRPTs

Background and Rationale

The Company and its subsidiaries (“Rapid Group”) engage in a variety of transactions with related parties as part of their ordinary course of business. The previous mandate expired on 29 March 2026, and none of the RRPTs exceeded the disclosure thresholds since then. Approval of a new mandate will allow the Rapid Group to continue entering into such transactions efficiently, without the recurring need for separate shareholder meetings, thus reducing administrative costs and enhancing operational agility.

Nature and Estimated Value of RRPTs

The RRPTs involve substantial potential transactions with parties connected to major shareholders and directors. Key highlights include:

• Legal Services: Up to RM1,000,000 for services from Nor Ding & Co., of which Director Ding Ming Hea is a partner.
• General Contracting and Construction: Up to RM50,000,000 with YNH Construction Sdn. Bhd. (YNHC), linked to Executive Chairman Dato’ Dr. Yu Kuan Chon and other related parties.
• Purchase of Commercial Properties: Up to RM30,000,000 from Kar Sin Bhd (KSB), a subsidiary of YNH Property Berhad (YNHP), connected to major shareholders and directors.
• Purchase of Hardware and Soft Line Items: Up to RM30,000,000 from Various Promotion Sdn. Bhd. (VPSB), with ownership connections to family members of directors.
• Professional Legal Services: Up to RM3,000,000 from Yu & Associates, linked to the Yu family.
• Rental Income: Up to RM300,000 from Halim & Yu Sdn. Bhd. (HYSB), connected to directors and their spouses.

The full list of transactions, parties involved, and their relationships are detailed in the Circular, with all transactions required to be at arm’s length, on normal commercial terms no more favorable to related parties than to the public.

Procedures and Safeguards

• All RRPTs are reviewed to ensure compliance with Bursa Malaysia’s listing requirements, including annual internal audits and quarterly reviews by the Audit and Risk Management Committee.
• Related parties must abstain from deliberation and voting on relevant resolutions to protect minority shareholder interests.
• A fresh mandate will be sought if review procedures are found inadequate.

Potential Impact on Shareholders and Share Price

• No dilution of share capital: The RRPT mandate does not involve new share issuance.
• Minimal impact on financials: The transactions are not expected to have a material effect on net assets, gearing, or earnings per share for FY2026, provided they occur within ordinary business parameters.
• Transparency and governance: Enhanced disclosure of RRPTs and abstention by interested parties serve to protect minority interests, which could support investor confidence and share value.

2. Proposed Renewal of Share Buy-Back Authority

Key Features

The Board seeks renewed authority to repurchase up to 10% of the Company’s issued shares (up to 10,689,650 shares based on the current issued capital of 106,896,506 shares) using retained profits, which stood at approximately RM80.0 million as at 31 December 2025.

Mechanics and Options for Purchased Shares

• Shares bought back may be cancelled, retained as treasury shares, distributed as share dividends, resold, or used as consideration for corporate exercises.
• Purchased shares cannot be voted or receive dividends while held as treasury shares.
• Share buy-backs must comply with the solvency test under the Companies Act 2016.
• Purchase price is capped at 15% above the 5-day weighted average market price preceding the purchase.
• Resale/transfer price must not be less than 5% below the 5-day weighted average market price prior to the resale/transfer, subject to certain conditions.

Potential Impact on Shareholders and Share Price

• EPS Enhancement: Cancellation of shares can improve earnings per share, potentially supporting the share price.
• Market Support: Share buy-backs may help stabilise the share price during periods of undervaluation or market volatility.
• Capital Management Flexibility: Treasury shares can be used for future dividends or corporate exercises.
• Caveats: Buy-backs could temporarily reduce available working capital and, if not managed prudently, may forego better investment opportunities or affect future dividend payments.
• Shareholding Effects: The buy-back may increase the percentage shareholding of major shareholders and directors proportionately, and could trigger a mandatory general offer under the Malaysian Code on Take-Overs and Mergers 2016 if thresholds are breached.

3. Shareholder Action and Meeting Details

• AGM Date: 19 June 2026, 11:00 a.m. at AC Hotel Penang Bukit Jambul.
• Proxy Voting: Shareholders unable to attend may appoint proxies. Proxy forms must be submitted at least 48 hours before the AGM.
• Abstention Requirements: Interested directors and major shareholders, as well as persons connected to them, must abstain from voting on the relevant resolutions.

4. Additional Disclosures

• No Material Contracts or Litigation: The Company reported no material contracts (outside ordinary business) or litigation as at the Circular date.
• Public Shareholding Spread: Currently at 87.29%, well above the minimum 25% required by Bursa Malaysia.
• Historical Share Prices: The share traded between RM0.51 and RM0.86 over the past year, with the last traded price at RM0.73 as at the latest practicable date.
• Directors’ Responsibility: The Board accepts full responsibility for the accuracy and completeness of the information disclosed.

5. Key Takeaways for Investors

• Large Value Transactions: The scale of related party transactions (up to RM50 million for construction, RM30 million for property, RM30 million for supplies) could have a material impact on Rapid’s business and financial performance, especially if such transactions are executed in full.
• Potential for Market Activity: The share buy-back authority, if exercised, could provide downside protection for the share price and support EPS, which may be viewed favorably by investors and analysts.
• Governance Safeguards: The Company’s commitment to transparency, arm’s length dealings, and abstention from voting by interested parties is intended to protect minority shareholders and mitigate governance risks commonly associated with related party transactions.
• Shareholder Participation: Investors are encouraged to review the full details in the AGM Notice and Circular, and to participate in the decision-making process either in person or by proxy.
• Potential Price Sensitivity: Approval and subsequent execution of these mandates could move the share price, particularly if large-scale related transactions or significant buy-backs are announced or executed.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with professional advisers before making investment decisions. The information is based on the Circular to Shareholders of Rapid Synergy Berhad dated 30 April 2026 and is believed to be accurate as of that date but is subject to change without notice.

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