CTOS Digital Berhad Announces Proposed Renewal of Share Buy-Back Mandate

Key Highlights from the Share Buy-Back Statement

• Share Buy-Back Mandate Renewal: CTOS Digital Berhad intends to renew its shareholders’ mandate to repurchase up to 10% of its total issued shares. This mandate, if approved at the upcoming 2026 AGM on 25 June 2026, will allow the company to buy back its own shares from the open market through Bursa Malaysia Securities.
• Maximum Number of Shares: As of the latest practicable date (LPD, 17 April 2026), CTOS Digital’s total issued shares stand at 2,290,530,800. Therefore, the company may purchase up to 229,053,080 shares, including 15,450,000 treasury shares, representing 10% of the issued share capital.
• Funding: The buy-back will be funded through internally generated funds and/or borrowings, with the maximum funds not to exceed the retained profits of the company, which were RM178,422,000 as of 31 December 2025.
• Solvency Test: The company will conduct a solvency test to ensure that the buy-back does not render it insolvent or impair its capital, and that the company remains solvent for six months after the buy-back.
• Treatment of Purchased Shares: Purchased shares may be cancelled or retained as treasury shares. Treasury shares can be distributed as share dividends, resold, transferred for employee share schemes, used as purchase consideration, or cancelled, among other options.
• Recent Buy-Back Activity: CTOS Digital has actively repurchased shares in the past twelve months, with detailed data provided for purchases from July to November 2025. On 17 November 2025, the company cancelled 19,469,200 treasury shares, reducing its total issued shares.
• Market Price Data: The report provides monthly high and low prices for CTOS Digital shares from April 2025 to March 2026, with a sharp decline noted in March 2026 (RM0.795 to RM0.590). The last transacted price as of LPD was RM0.660, indicating substantial volatility and potential impact from buy-back activities.
• Potential Impact on Financials:
  • If shares are cancelled, the issued share capital will decrease, potentially increasing EPS and NA per share.
  • If held as treasury shares, no change to issued capital, but these can be resold or distributed as dividends.
  • Buy-back reduces cash and working capital, but resale of treasury shares at higher prices can replenish funds.
  • Buy-back may affect dividend payments, as treasury shares do not carry dividend rights, and retained profits are reduced by the buy-back.
• Shareholding Spread & Regulatory Compliance: The company must maintain at least 25% public shareholding spread post buy-back as required by Bursa Malaysia. The Board will ensure compliance and avoid buy-backs if these requirements could be breached.
• Take-Over Code Implications: If any Director or substantial shareholder’s holdings cross certain thresholds due to the buy-back (more than 33% or increase by more than 2% within six months), a mandatory offer for remaining shares may be triggered under the Malaysian Code on Take-Overs and Mergers. Waivers may be sought from the Securities Commission if this occurs.
• Interests of Directors & Major Shareholders: No direct interest in the buy-back proposal except for proportionate increases in shareholding. The effect on their holdings is detailed in the report.
• Shareholder Action Required: Shareholders are urged to read the report carefully and vote on the resolution at the 2026 AGM. Proxy voting and electronic lodgement options are available.

Important Details for Investors

• Price Sensitivity: The regular buy-back activities and subsequent cancellation of shares reduce the issued share capital, which can improve EPS, NA per share, and potentially support share price stability. The buy-back may also signal management confidence in the company’s prospects, which is often viewed favorably by investors.
• Impact on Share Price: The buy-back could reduce market volatility and support share prices, especially given recent declines. Investors should monitor the company’s buy-back execution, as aggressive buy-backs may increase share prices, while failure to support the price could lead to further declines.
• Financial Health: The solvency test and capped funding ensure that the buy-back does not jeopardize the company’s financial position. However, the reduction in retained earnings may limit future dividend payments or investment capacity.
• Regulatory Risks: Breaching public spread requirements or triggering mandatory offers could have significant implications for share liquidity and control of the company.
• Recent Market Activity: The share price has seen notable volatility, with a steady decline from RM1.17 in April 2025 to RM0.66 in April 2026, reflecting challenging market conditions and potentially signaling undervaluation or market concerns. The buy-back could help counteract this trend.

Detailed Financial and Shareholding Information

• Directors’ Shareholdings: Minimal changes expected unless buy-back is from non-director shareholders. For example, Mizran Bin Md Nahar (359,400 shares), Lynette Yeow Su-Yin (300,000 shares), and Su Puay Leng (300,000 shares) will see their percentage stake rise proportionally if the share base shrinks.
• Substantial Shareholders: Jade Vine Sdn. Bhd., Employees Provident Fund, ABRDN Malaysia, ABRDN Holdings, and Aberdeen Group PLC are among substantial holders, and their stakes will rise proportionally post buy-back.
• Buy-Back Activity (Past Year):
  • Multiple purchases from July to November 2025, with prices ranging from RM0.810 to RM0.965 per share.
  • On 17 November 2025, 19,469,200 treasury shares were cancelled, reducing total issued shares to 2,290,530,800.
  • As at LPD, 15,450,000 treasury shares are held.
• Market Price Trends:
  • Highest price in April 2025: RM1.170; lowest in March 2026: RM0.590.
  • Last transacted price as at LPD: RM0.660.
• Financial Effects:
  • If buy-back is fully utilized and shares cancelled, issued capital drops to 2,061,477,720 shares.
  • EPS and NA per share may improve due to reduced share base.
  • Working capital decreases due to cash outflow but can recover if treasury shares are resold at a profit.
  • Dividend rate may increase due to fewer shares, but absolute dividend payout may decline.
• Regulatory and AGM Information: Approval required only from shareholders at the 2026 AGM. Shareholders can attend or vote by proxy, including electronic lodgement.

Conclusion

The proposed renewal of CTOS Digital Berhad’s share buy-back mandate is a significant corporate action that could impact share liquidity, financial metrics, and investor sentiment. The buy-back, if implemented, may support share price stability, enhance EPS and NA per share, and signal management confidence amidst a period of price volatility. However, the reduction in retained profits and working capital, alongside regulatory risks, warrant careful consideration by shareholders and investors. The outcome of the 2026 AGM will be crucial for future buy-back activity and its potential effects on share value.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell shares in CTOS Digital Berhad. Investors should consult their financial advisors and review the official documents for detailed information and potential risks before making any investment decisions.

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