As of 31 May 2026, SCGM had cash and bank balances of approximately RM116.1 million, comprising mainly proceeds from the Disposal of Lee Soon Seng Plastic Industries Sdn Bhd and the disposal of three properties by Habipack Sdn Bhd completed on 29 December 2023 (page 31 of the Circular dated 29 June 2026).

 

Following the proposed special dividend of 25 sen per SCGM share (approximately RM48.14 million), SCGM is expected to retain cash and bank balances of approximately RM67.96 million.

 

According to the Circular, the remaining cash will be utilised primarily for the expansion of Eramas Ingredients’ manufacturing facilities, marketing and advertising initiatives, working capital and expenses relating to the Proposed Regularisation Plan.

 

The proposed special dividend represents only around 41% of SCGM’s cash and bank balances as at 31 May 2026, leaving a sizeable cash reserve after the distribution.

 

• How did the Board determine that 25 sen per share was the appropriate quantum for the Proposed Special Dividend?

 

• What considerations and requirements were assessed in arriving at this amount?

 

• Given the substantial cash balance and the Group’s relatively modest funding requirements, did the Board evaluate distributing a higher special dividend to reward existing shareholders? If so, why was this not considered to be in the best interests of shareholders?

 

Based on the pro forma financial information (page 701 of the Circular), upon completion of the Proposed Acquisition, Proposed Exemption and Proposed Offer for Sale, SCGM’s gearing ratio is expected to increase only marginally from nil to 0.08 times, with total borrowings and lease liabilities of approximately RM13.76 million.

 

This suggests that the enlarged Group would continue to have significant debt capacity to finance future expansion and working capital requirements.

 

• Did the Board take into account the enlarged Group’s strong balance sheet and borrowing capacity when determining the quantum of the Proposed Special Dividend?

 

• Why did the Board choose to retain a relatively large cash buffer instead of returning more excess capital to shareholders, particularly when future expansion could potentially be funded through a prudent combination of internally generated funds and borrowings?

On an annualised 12-month basis, Renewable Energy revenue fell by more than 58% to RM3.17 million in FPE 2026, compared with RM7.58 million in FYE 2024 (Page 10). In addition, Note 21 (Page 129) and Note 22 (Page 130) show that the segment generated RM4.76 million in revenue against RM4.65 million in cost of sales, implying a gross profit margin of only 2%.

 

• Against the backdrop of strong industry tailwinds, commercial demand for solar solutions has continued to strengthen. Why then, is Sun Power Innovation Sdn Bhd operating at a gross margin of only 2%? Does this reflect a business model that is largely limited to low-margin equipment supply, pricing pressure, or project execution challenges?

 

• What steps is management taking to reposition the business towards higher-value engineering, procurement, construction and commissioning (EPCC) services that can deliver sustainable margin expansion?

We refer to the report, which highlights that Malaysia is facing a growing landfill crisis driven by rising waste generation and continued reliance on landfill disposal, with many sites nearing capacity and causing significant environmental risks such as pollution and methane emissions. Despite circular economy policies, weak implementation continues to hinder progress, calling for stronger waste reduction, recycling, and waste-to-energy solutions.

 

The report also warns that continued dependence on landfills will worsen long-term capacity constraints and environmental impacts.

(Source:https://www.freemalaysiatoday.com/category/opinion/2026/06/19/prime-time-for-malaysia-to-dig-itself-out-of-its-landfill-problem).

 

• Given the Group’s heavy reliance on landfill or incineration for over 98% of its waste disposal (Source: Page 50 of AR2026), how does the Board address the sustainability concerns arising from Malaysia’s diminishing landfill capacity and increasing environmental pressures?

 

• What targeted initiatives is the Group pursuing to reduce landfill disposal and enhance waste diversion practices?

• The Company states that it will focus on an “asset-light” joint development model with landowners to minimise upfront land acquisition costs. It highlights two potential projects: a mixed development in Penang (indicative GDV of RM196 million) and a serviced apartment development in the Klang Valley (indicative GDV of RM364 million).

 

• Given the Company’s constrained cash position and negative earnings profile, how much upfront cash or security is required to execute these two proposed JVs, and how does the Company intend to pay these fees without breaching existing creditor obligations under Rexallent’s Scheme of Arrangement?

 

• Why would cement, steel and brick manufacturers grant competitive credit lines or bulk discount pricing to a newly incorporated Ecobuilt trading subsidiary when the existing, core construction subsidiaries are defaulting on payments to equipment and concrete suppliers (such as Poh Seng Transport and Evermix Concrete)? Without established credit terms, how can this trading unit compete on price or protect its margins from severe compression?

On 13 May 2026, SCHB announced its proposed diversification into the power business through the development of a gas-fired peaking power plant (GPPP) in Kimanis, Sabah, with an installed net capacity of up to 100MW through a 70:30 JV with NRG Consortium (Sabah) Sdn Bhd. The estimated cost for the GPPP is approximately RM938.6 million.

 

• Upon commissioning, what is the expected earnings contribution from the Power business relative to its existing Port Operations and Property Development & Leasing segments under a business-as-usual scenario?

 

• Over the medium term, what is the targeted earnings mix among these three business segments?

 

• SCHB previously stated that the principal sources of revenue and earnings visibility for the GPPP would be derived from the power purchase agreement (PPA) with Sabah Electricity (SESB), comprising a combination of fixed and variable incomes – capacity/availability payments, energy payment, and ancillary or grid-support services.

 

• Pending the finalisation and execution of the PPA, which is expected by Q4FY2026, please elaborate on the estimated percentage contribution of each revenue component to every ringgit of revenue generated by Suria Powergen 1 Sdn Bhd (SP1SB), a 70%-owned subsidiary that undertakes the operation and management of the GPPP.

 

• Based on the current project assumptions, what are the expected returns on investment (ROI), project internal rate of return (IRR), payback period and equity breakeven timeline?

 

• Please elaborate the fuel cost pass-through mechanism under the proposed PPA.

 

• To what extent will SP1SB be protected from fluctuations in natural gas prices and other input costs?

 

We note that Kimanis Power (Dua) Sdn Bhd, a 60:40 joint venture between NRG Consortium and Petronas Gas Berhad, already operates a 100MW gas-fired peaking power plant located approximately 2km driving distance from SP1SB’s proposed project site.

 

• Given the proximity and similar generation profile of both facilities, is there a risk that the two peaking plants will compete for dispatch by SESB, thereby reducing the utilisation rate or energy payment opportunities of either plant? If so, what differentiating factors would determine which plant is dispatched first?

 

• Are both plants intended to serve the same load centre or geographical region? Is there sufficient projected peak electricity demand and reserve margin requirements to support the commercial operation of both peaking plants without materially “cannibalising” each other’s revenue?

 

• How does the dispatch mechanism for peaking power plants operate under Sabah’s single-buyer electricity market? What are the principal factors that determine when SP1SB will be dispatched?

 

• To what extent are SP1SB’s projected financial returns dependent on the frequency and duration of dispatch, as opposed to fixed capacity or availability payments? How sensitive are the GPPP’s earnings to lower-than-expected dispatch hours?