Founder Group positioned to benefit from Malaysia’s solar EPCC growth

KUALA LUMPUR - Founder Group Limited (NASDAQ:FGL), a solar photovoltaic systems EPCC solutions provider in Malaysia with a market capitalization of $26.4 million and annual revenue of $20.2 million, announced its strategic positioning to capitalize on growth opportunities in the country’s renewable energy sector, according to a company press release. According to InvestingPro data, the company faces challenges with a declining revenue trend of -39% over the last twelve months.

The total EPCC contract value in Malaysia’s renewable energy sector is expected to increase by 40% to RM17.4 billion (USD4.1 billion), with activity projected to continue through 2028.

Founder Group recently signed a Memorandum of Understanding with GCL Systems Integration Technology Co. Ltd. to collaborate on renewable energy projects valued at up to USD220 million across Malaysia and other ASEAN countries. The deal value represents nearly 8.3 times the company’s current market capitalization, though InvestingPro analysis indicates the company’s overall financial health score remains WEAK, with particular concerns in cash flow metrics.

Market analyses from Kenanga Investment Bank Berhad highlight growth drivers including LSS Petra and LSS Petra 5+ development programs, which are anticipated to generate up to RM12 billion worth of contracts for 6GW installed capacity targeted for completion by end-2027.

The Corporate Renewable Energy Supply Scheme (CRESS) is expected to gain traction following a tariff hike for data centers, potentially generating an additional RM5 billion in EPCC works driven by 2GW of firm output demand.

With the stock trading at $1.36, between its 52-week range of $0.66 to $5.26, and currently showing signs of overvaluation according to InvestingPro’s Fair Value analysis, Lee Seng Chi, Chief Executive Officer of Founder Group Limited, said the company is "exceptionally well-positioned to leverage the robust growth projected for Malaysia’s renewable energy sector."

The company reports that solar panel prices are expected to bottom in 2025, which may present cost risks for asset owners while benefiting EPCC contractors like Founder Group. For detailed financial metrics and expert insights on FGL’s growth potential, investors can access additional ProTips and comprehensive analysis through InvestingPro.

The firm is also exploring AI-powered solutions with business partners to enhance its project management, engineering, design, and maintenance operations.

In other recent news, Founder Group Limited has secured a contract valued at approximately $2.36 million for a solar project in Malaysia. The contract involves the engineering, procurement, construction, and commissioning of a 30-megawatt large-scale solar photovoltaic plant. Founder Group will be responsible for civil and structural works, infrastructure development, installation, testing, commissioning, and interconnection facility for this project. The completion of the project is anticipated by the end of 2025. These developments highlight the company’s ongoing efforts in expanding its renewable energy projects.

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