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KUALA LUMPUR - Founder Group Limited (NASDAQ:FGL), a Malaysian solar photovoltaic systems provider with a market capitalization of $15 million, stated Friday that the proposed wind down of U.S. solar power tax credits by 2028 will not affect its operations or financial performance. The company’s stock has declined 76% over the past year, according to InvestingPro data.
The company, which specializes in engineering, procurement, construction, and commissioning (EPCC) solutions for solar systems, emphasized that it generates revenue predominantly from the Malaysian market and has no operations in the United States. FGL reported revenue of $20.2 million in the last twelve months, marking a 39% decline year-over-year.
"Although we are listed on Nasdaq and trade alongside U.S. solar power stocks, we will not be impacted by the possible elimination of those tax credits," said Lee Seng Chi, Chief Executive Officer of Founder Group Limited, in a press release.
The statement comes as U.S. solar stocks experience selloffs following a Senate panel’s proposal to phase out solar tax credits by 2028 as part of President Donald Trump’s tax cut and spending bill.
Founder Group focuses on two main business segments: large-scale solar projects and commercial and industrial solar installations in Malaysia. According to the company, its future expansion plans target only Southeast Asian markets, with no current intentions to enter the U.S. market.
The company provides end-to-end EPCC solutions for solar photovoltaic facilities and aims to promote eco-friendly resources and carbon neutrality through its services. InvestingPro analysis indicates a weak overall financial health score, with the stock currently appearing overvalued based on its proprietary Fair Value model.
In other recent news, Founder Group Limited has announced a significant contract acquisition valued at approximately $2.6 million for a rooftop solar photovoltaic facility in Malaysia. This contract involves the design, engineering, procurement, supply, delivery, construction, and commissioning of the solar facility and is expected to be completed within two years. Following the construction, Founder Group plans to sign an Operations and Maintenance agreement, which could provide benefits for 15 to 21 years. The company anticipates a double-digit profit margin for this venture, highlighting potential opportunities for recurring revenue and margin growth.
In another development, Founder Group signed a memorandum of understanding with GCL Systems Integration Technology to explore renewable energy projects across Malaysia and other ASEAN countries, with an estimated value of up to $220 million. This collaboration will focus on solar photovoltaic and energy storage projects, with both companies contributing technical expertise. The agreement outlines that if projects are secured, separate definitive agreements will detail specific commitments. These recent developments align with Malaysia’s increased renewable energy targets, aiming for a 40% capacity by 2035, with solar energy playing a significant role.
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