Founder Group Limited (NASDAQ: FGL) Shows Revenue Growth and Strategic Focus in Renewable Energy

Founder Group Limited (NASDAQ: FGL) Shows Revenue Growth and Strategic Focus in Renewable Energy

Founders Group Limited (NASDAQ:FGL )

ATLANTA , GA, UNITED STATES, October 29, 2024 /EINPresswire.com/ -- Listed on NASDAQ in October 2024, Founder Group Limited (FGL) is making significant strides in the renewable energy and EPCC (Engineering, Procurement, Construction, and Commissioning) sectors. Based in Malaysia and majority-owned by Reservoir Link Energy, FGL has carved a niche in solar energy projects while offering civil, structural, mechanical, and electrical engineering services. With the global transition toward sustainable energy solutions, FGL is well-positioned to meet the growing demand for green alternatives. This article provides an analysis of FGL as an investment opportunity, examining its revenue growth, strategic focus on solar energy, financial performance, and future prospects.

Over the past three years, FGL has posted impressive revenue gains:
• 2021: MYR 25.17 million (~USD 5.7 million)
• 2022: MYR 63.51 million (~USD 14.5 million)
• 2023: MYR 148.05 million (~USD 33.9 million)

FGL achieved remarkable revenue growth, with an annualized growth rate exceeding 100%. This success reflects its focus on solar EPCC services, a major income source amid the global shift toward renewables. Key projects in engineering have enhanced this growth, positioning FGL to benefit from government incentives and private-sector interest in sustainable infrastructure.

The expanding renewable energy market offers FGL significant opportunities driven by international climate policies and government incentives for solar energy. By specializing in EPCC services, FGL leverages its expertise, aligning with the long-term trend of pursuing sustainability goals.

FGL focuses exclusively on EPCC services for solar energy, particularly in high-margin areas like consulting and design. This specialization allows the company to concentrate resources and streamline operations while minimizing risks associated with over-diversification. Warren Buffett’s principle of investing within one’s “circle of competence” aligns well with this strategic focus.


FGL’s impressive revenue growth has led to a significant increase in accounts receivable, a common challenge in the EPCC industry. Clients often defer payments until project milestones are met, straining cash flow but indicating an expanding project pipeline and increased client confidence. This situation reflects FGL’s success in securing larger projects, emphasizing the need for effective cash flow management for sustainability.

FGL has financed its growth through substantial debt, resulting in a debt-to-equity ratio of 1.67 by the end of 2023. This leverage is crucial, as EPCC projects require significant upfront costs for equipment and labor. Utilizing debt to support growth is sound, especially with anticipated FED interest rate reductions in 2024–2025 and Malaysia’s economic recovery. Access to lower-cost capital gives FGL a competitive edge to expand and invest in new projects at reduced financing costs.

Balancing high accounts receivable with sufficient cash flow is essential for FGL. The sector often faces cash flow cycles where funds remain tied up in receivables until project phases are completed. Prudent financial management is vital to avoid liquidity issues as FGL scales operations in the solar energy sector.

Currently, FGL’s net profit margin ranges from 4.8% to 7.6%, reflecting the substantial upfront costs inherent in EPCC work. Management is implementing strategies to enhance operational efficiency and achieve higher profitability. By focusing on process optimization and high-margin services, FGL aims to improve margins and mitigate risks related to receivables. As market conditions improve, FGL’s access to capital and responsible allocation will support its expansion plans, allowing exploration of untapped markets.

FGL’s revenue growth is driven by its strategic focus on renewable energy, especially solar, which is a stable and high-demand sector. Global efforts to achieve net-zero carbon emissions and increased adoption of sustainable energy sources create a favorable environment for FGL’s solar projects. As governments prioritize clean energy, FGL’s revenue from solar EPCC projects is expected to remain stable and potentially expand.

By shifting toward solar energy, FGL reduces its vulnerability to the volatility of traditional energy markets. The Malaysian government’s support for green energy projects aligns with FGL’s growth strategy, reinforcing its revenue through public and private initiatives aimed at lowering carbon footprints.
In the solar EPCC market, FGL benefits from a favorable competitive landscape, allowing multiple players to thrive without excessive competition. Instead of “cannibalization,” FGL and its competitors can benefit from overall industry growth.

FGL’s competitive advantages stem from its expertise in solar projects, particularly in Malaysia and neighboring regions. This regional focus enables better client service and leverages established relationships. Additionally, FGL's strong reputation and early establishment in the renewable energy sector position it favorably as the industry grows. Its specialization in solar EPCC and focus on high-value project phases further strengthen its market standing.

FGL’s recent NASDAQ listing enhances its access to funding and visibility among international investors, marking a crucial step for scaling operations. As majority owner, Reservoir Link Energy highlights FGL's potential to capture market share in the growing solar industry.

This listing supports FGL’s goal to expand its project pipeline by securing larger, higher-margin contracts in Southeast Asia’s renewable energy market. The public offering facilitates efficient fundraising, accelerating expansion plans and enabling strategic partnerships. With access to a larger capital pool, FGL boosts its financial flexibility, strengthening its position to compete in larger projects.

Looking ahead, FGL’s revenue growth strategy focuses on capitalizing on the global shift to clean energy while deepening its EPCC expertise. Management plans to scale solar operations by targeting larger projects and diversifying service offerings within renewable energy.

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Safe Harbor Statement

This release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. Landon Capital received no direct compensation related to this release, although Landon Capital does hold a position in the company covered above. This release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Actual results may differ materially from those stated or implied in.

Keith Pinder
Landon Capital
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¹ https://www.founderenergy.com.my