KUALA LUMPUR - Founder Group Limited (NASDAQ: FGL), a key player in the solar photovoltaic (PV) systems sector in Malaysia, has announced the acquisition of a contract valued at approximately US$2.6 million, representing about 11% of the company’s current annual revenue of $23.27 million. According to InvestingPro analysis, FGL appears to be overvalued at its current market capitalization of $25.21 million. The company will undertake the design, engineering, procurement, supply, delivery, construction, and commissioning of a rooftop solar PV facility.
The contract, awarded by a leading solar installation company in Malaysia, is expected to be completed within two years. With a current gross profit margin of 10.96% and a fair financial health rating according to InvestingPro, Founder Group is set to sign an Operations and Maintenance agreement, which is projected to provide benefits for 15 to 21 years.
This partnership is not the first of its kind between the two companies, with Founder Group having previously secured similar contracts. Despite a challenging year with a -52.85% one-year return, the stock has shown recent momentum with a 15.5% year-to-date gain. The company anticipates further agreements in the coming years and projects a double-digit profit margin for this venture.
The CEO of Founder Group, Lee Seng Chi, expressed pride in continuing the partnership with a top solar installation firm in Malaysia, emphasizing the shared commitment to supporting the country’s renewable energy targets and fostering a sustainable future. The contract is also expected to offer opportunities for recurring revenue and margin growth, potentially enhancing shareholder value. For detailed financial analysis and more exclusive insights about FGL’s growth prospects, visit InvestingPro, which offers over 30 additional financial metrics and expert projections.
This announcement comes at a time when the Malaysian government has raised its renewable energy targets to achieve 40% capacity by 2035, with solar energy poised to contribute significantly to this growth. The government’s push for a new wave of large-scale solar projects is in line with Founder Group’s mission to deliver innovative solar installation services and promote eco-friendly resources. With a current ratio of 1.11 and an Altman Z-Score of 5.03, the company maintains a stable financial position to capitalize on these opportunities.
The statement is based on a press release from Founder Group Limited.
In other recent news, Founder Group Limited announced it has secured a contract for a floating solar farm project in Kuala Langat, Selangor, Malaysia. The project, valued at approximately $4.5 million, involves constructing a 9.99MWac/15.033625MWp solar power facility on a 24-acre water body using floating photovoltaic technology. This development is part of Founder Group’s strategy to support Malaysia’s renewable energy goals and its commitment to carbon neutrality. The company will act as a subcontractor, providing the workforce, hand tools, materials, and machinery necessary for the project’s completion, which is set for June 30, 2025. CEO Lee Seng Chi highlighted the project’s potential to contribute to the company’s growth and Malaysia’s green initiatives. These recent developments indicate Founder Group’s ongoing efforts to deliver sustainable energy solutions.
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