Executive Summary / Key Takeaways

• Founder Group Limited ($FGL) is strategically positioned as a leading Engineering, Procurement, Construction, and Commissioning (EPCC) solutions provider for solar projects in Malaysia, poised to capitalize on the nation's burgeoning renewable energy sector and ambitious green data center initiatives.
• The company's integrated EPCC model, combined with its localized expertise and exploration of AI-powered solutions, forms a competitive advantage in delivering efficient and comprehensive solar photovoltaic (PV) facilities.
• Recent landmark project wins, including a RM1.16 billion solar-plus-storage facility in Sarawak, underscore FGL's capacity for large-scale, impactful projects and its alignment with Malaysia's significant renewable energy growth, with the total EPCC contract value expected to surge up to RM17.4 billion by 2028.
• While FGL experienced a net loss in 2024 amidst substantial capital expenditures, its strategic investments in PPE and recent contract announcements signal a strong future growth trajectory, though investors should monitor its high debt-to-equity ratio and cash flow generation.
• FGL's dual-class share structure and Nasdaq listing enhance its capital market visibility, supporting its regional expansion ambitions across Malaysia and other ASEAN countries.

Malaysia's Green Energy Horizon: FGL's Strategic Foundation

Founder Group Limited ($FGL), established in 2021 and headquartered in Klang, Malaysia, has rapidly emerged as a pivotal Engineering, Procurement, Construction, and Commissioning (EPCC) solutions provider for solar photovoltaic (PV) systems. The company's core business encompasses end-to-end services for both large-scale solar (LSS) and commercial and industrial (C&I) solar projects, covering everything from initial engineering and design to procurement, civil, structural, mechanical, and electrical works, installation, integration, and final commissioning. This integrated approach positions FGL as a comprehensive partner in Malaysia's accelerating transition to renewable energy.

The broader industry landscape in Malaysia is experiencing significant tailwinds. The total EPCC contract value within the nation's renewable energy sector is projected to surge up to RM17.4 billion by the end of 2028, representing a 40% increase. This growth is underpinned by government initiatives such as the LSS Petra and LSS Petra 5+ programs, which aim for 6GW capacity with RM12 billion in value, and the revival of the Corporate Renewable Energy Supply Scheme (CRESS) program, targeting 2GW demand worth RM5 billion. These drivers, coupled with national ambitions for green data center expansion and AI integration, create a fertile ground for FGL's specialized services.

FGL's competitive positioning is rooted in its specialized solar EPCC expertise and deep local market understanding. While larger, more diversified electrical infrastructure contractors like MYR Group Inc. (MYR) offer a broader range of services across North America, FGL's focused approach in Malaysia allows for greater efficiency and adaptability to local regulations and project specificities. Similarly, while global players like First Solar Inc. and SunPower Corporation (SPWR) excel in module manufacturing and high-efficiency panels, FGL differentiates itself through its integrated, hands-on project execution and commissioning capabilities, fostering strong local partnerships. The company is also actively exploring AI-powered solutions with business partners to streamline project management, engineering and design, and operation and maintenance divisions, aiming to enhance efficiency and maintain a competitive edge. This technological exploration is crucial for optimizing project timelines and potentially reducing implementation costs, which could provide a notable advantage against competitors focused primarily on hardware or broader infrastructure.

Evolution and Strategic Investments

FGL's journey began with a period of robust expansion. From its founding in 2021, total revenue grew significantly from $25.17 million to $148.05 million by 2023, accompanied by a net income of $7.15 million in 2023. This early success demonstrated strong market penetration and effective project execution within Malaysia. However, 2024 marked a shift in financial performance, with total revenue decreasing to $90.34 million and the company reporting a net loss of $5.15 million.

Despite this, FGL undertook substantial strategic investments, evidenced by a significant increase in Net Property, Plant, and Equipment (PPE) from $1.88 million in 2023 to $27.32 million in 2024. This substantial capital expenditure suggests a deliberate move to enhance operational capacity and prepare for larger, more complex projects, positioning the company for future growth rather than reflecting a fundamental weakness in its core business model.

In July 2025, FGL further solidified its corporate structure by adopting a dual-class share structure and transitioning its Class A Shares to trade on the Nasdaq Capital Market under the symbol FGL. This move enhances the company's visibility in international capital markets, potentially facilitating future capital raises to support its ambitious growth plans.

Catalyzing Growth: Landmark Projects and Regional Ambitions

Recent developments underscore FGL's strategic alignment with Malaysia's green energy future. In June 2025, the company signed a Memorandum of Understanding (MOU) with GCL Systems Integration Technology Co. Ltd. to collaborate on renewable energy projects across Malaysia and other ASEAN countries, with an estimated value of up to USD $220 million. This partnership signals FGL's intent for regional market expansion beyond its domestic Malaysian focus.

A pivotal announcement came in September 2025, when FGL executed a Heads of Agreement with Planet QEOS Sdn. Bhd. for a landmark RM1.16 billion 310 MWp solar-plus-storage project in Sarawak, Malaysia. This pioneering initiative includes a 310 MWp solar photovoltaic power plant and a 620 MWh Battery Energy Storage System (BESS), designed as Malaysia's first "firm" solar power plant to provide continuous, dispatchable renewable electricity. The project is a critical component of the wider Baram DeepTech Energy Programme and aims to anchor a 200 MW Tier-4 Green Data Centre Park, expected to generate over RM1 billion in foreign direct investment. This project not only showcases FGL's capability in large-scale, technologically advanced renewable energy infrastructure but also aligns with Sarawak's vision to become a major exporter of clean electrons and a leader in ASEAN's green digital transition.

Management anticipates that EPCC contractors, like FGL, are poised to be "potential 'biggest winners'" as solar panel prices are expected to bottom in 2025. This market dynamic shifts cost risks away from asset owners and towards EPCC players, potentially benefiting FGL by securing more favorable procurement terms for project materials.

Financial Performance and Health: A Closer Look

FGL's financial performance in 2024, with a revenue of $90.34 million and a net loss of $5.15 million, reflects a period of significant investment and transition. This contrasts with the $148.05 million revenue and $7.15 million net income reported in 2023. The company's TTM Gross Profit Margin stands at 6.91%, Operating Profit Margin at -6.21%, and Net Profit Margin at -5.70%. These margins are notably lower than those of established, larger competitors like First Solar Inc. (FSLR) and Enphase Energy Inc. (ENPH), which benefit from economies of scale and proprietary technology.

The company's liquidity position, with a TTM Current Ratio of 0.89, indicates that current assets are slightly less than current liabilities. This, coupled with a TTM Debt-to-Equity ratio of 209.02, highlights a reliance on debt financing, which is not uncommon for companies in a high-growth, capital-intensive industry. However, it necessitates careful monitoring of cash flow. FGL reported negative TTM Operating Cash Flow of -6.13 million and Free Cash Flow of -7.39 million. While these figures reflect the substantial capital expenditures in 2024, the ability to generate positive operating cash flow will be crucial for sustainable growth and debt servicing in the coming years. The recent project announcements and the anticipated surge in EPCC contract values are expected to significantly improve these metrics going forward.

Risks and Outlook

Despite the promising outlook, FGL faces several risks. The negative net income and cash flow in 2024, coupled with a high debt-to-equity ratio, present financial challenges that require diligent management. The capital-intensive nature of large-scale solar projects means FGL will continue to require significant capital, potentially through further debt or equity financing. The competitive landscape, while offering niche opportunities, also includes larger, more established players that could exert pricing pressure or outcompete on scale and technological innovation.

However, FGL's management has proactively addressed certain external risks, assuring investors that the company will not be impacted by potential changes to U.S. solar power tax credits, as its operations are primarily focused on Malaysia and Southeast Asia. This geographic insulation mitigates a significant risk factor affecting many U.S.-listed solar companies. The company's strategic focus on regional expansion in Southeast Asia, coupled with the anticipated surge in Malaysia's EPCC contract values, provides a clear growth runway. The exploration of AI-powered solutions could also enhance operational efficiencies and project delivery, strengthening FGL's competitive moat.

Conclusion

Founder Group Limited stands at a pivotal juncture, transitioning from a period of rapid initial growth and significant capital investment to what appears to be a new phase of large-scale project execution and regional expansion. The company's core investment thesis is firmly rooted in its specialized EPCC capabilities, its strategic alignment with Malaysia's aggressive renewable energy targets, and its proactive embrace of green data center initiatives. While the 2024 financial performance presented headwinds, the substantial increase in PPE and the recent landmark project announcements, particularly the RM1.16 billion Sarawak solar-plus-storage facility, paint a compelling picture of future revenue and profitability.

FGL's integrated service model and localized expertise provide a distinct advantage in its target markets. The exploration of AI-powered solutions further underscores its commitment to operational excellence and technological leadership within its niche. Investors should weigh the company's high growth potential and strategic positioning against its current financial leverage and the need for consistent positive cash flow generation. As Malaysia's green energy ambitions accelerate, Founder Group Limited is well-positioned to be a key beneficiary, making it a compelling consideration for discerning investors seeking exposure to the burgeoning Southeast Asian renewable energy sector.