Founder Group Ltd. Form 20-F Summary (Fiscal Year Ended December 31, 2025)
Business Context and Reporting Period
Company: Founder Group Limited (BVI-incorporated, principal operations in Malaysia).
Reporting Period: Fiscal year ended December 31, 2025.
Business Model: Engineering, Procurement, Construction, and Commissioning (EPCC) services for solar photovoltaic (PV) projects. Operations are divided into two segments: Large-scale solar projects (utility-scale) and Commercial & Industrial (C&I) rooftop projects.
Listing: Class A Ordinary Shares listed on Nasdaq Capital Market under symbol "FGL".
Key Financial Metrics (Fiscal Year 2025)
| Metric | 2025 (RM) | 2025 (USD) | 2024 (RM) | 2024 (USD) |
|---|---|---|---|---|
| Total Revenue | 120,697,610 | 29,721,156 | 90,344,588 | 20,186,479 |
| Gross Profit | 13,978,099 | 3,442,034 | 6,242,470 | 1,394,810 |
| Net Loss | (7,763,104) | (1,911,623) | (5,150,005) | (1,150,711) |
| Total Assets | 189,748,600 | 46,724,601 | 114,292,130 | 25,537,288 |
| Total Liabilities | 159,492,241 | 39,274,131 | 97,170,652 | 21,711,687 |
| Cash & Equivalents | 66,215,856 | 16,305,309 | 4,563,108 | 1,019,575 |
| Bank Borrowings | 63,340,867 | 15,597,357 | 35,039,857 | 7,831,000 |
Note: USD figures are convenience translations based on year-end rates (MYR 4.0610 to USD 1.00).
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 33.6% year-over-year, driven primarily by a 119% surge in C&I project revenue (RM 46.99M) and a 7% increase in Large-scale solar revenue (RM 73.71M).
- Profitability: Despite revenue growth, the company reported a net loss of RM 7.76M (widening from RM 5.15M in 2024). This was driven by increased selling and administrative expenses (up 36%) and higher finance costs (up 160%) due to increased debt utilization for working capital and asset acquisition.
- Balance Sheet: Total assets grew 66% to RM 189.7M, largely due to a significant increase in cash balances (RM 66.2M) following private placements and convertible securities issuances. Total liabilities increased 64% to RM 159.5M, reflecting higher borrowings and convertible securities payable.
- Cost Structure: Construction costs rose 52% to RM 71.9M, aligning with higher project execution. Material costs decreased 16% as the company shifted focus from selling mounting structures to full EPCC services.
Guidance, Outlook, and Risks
Outlook & Strategy:
- Expansion: Plans to expand EPCC services to hydropower and biogas by Q4 2026 and enter Southeast Asian markets (Philippines, Vietnam) by late 2026.
- Asset Ownership: Continuing strategy to invest in renewable energy assets (solar PV) to generate recurring income, evidenced by the acquisition of a 49% stake in RL Solar Assets Sdn. Bhd.
- Capital Raising: Completed a December 2025 private placement of a $16.07M secured convertible promissory note and an April 2025 private placement with Avondale Capital (up to $10M).
- Regulatory Compliance: Subsidiary Founder Energy (Malaysia) breached the Construction Industry Development Board Act (CIDBA) by failing to declare 31 contracts. While rectified, the subsidiary faces potential fines up to RM 1.55M and risk of license suspension.
- Internal Controls: Management identified material weaknesses in internal controls over financial reporting, citing a lack of accounting staff with IFRS/SEC knowledge and deficiencies in journal entry procedures. Disclosure controls were deemed ineffective as of December 31, 2025.
- Customer Concentration: High reliance on a few major clients. In 2025, three customers accounted for 57.7% of total revenue.
- Supplier Concentration: Reliance on Xiamen Solar First Energy Technology Co. Ltd. for mounting systems (exclusive distributorship expired Jan 2025, though purchases continue).
- Share Structure: Implemented a dual-class structure (July 2025) where Class B shares carry 20 votes per share, concentrating voting control with founders and key insiders.
Investor Verification Checklist
- Regulatory Status: Verify if Founder Energy (Malaysia) has received any fines or license suspensions from the CIDB regarding the undeclared contracts.
- Internal Control Remediation: Review progress on remediation plans for material weaknesses in internal controls and the effectiveness of new accounting staff/training.
- Debt Covenants: Assess the impact of the $16.07M convertible note and increased bank borrowings on liquidity and compliance with debt covenants.
- Project Pipeline: Confirm the status of ongoing large-scale solar projects and the ability to secure new contracts to sustain revenue growth.
- Related Party Transactions: Scrutinize the volume and terms of transactions with related parties (e.g., Reservoir Link Energy Bhd.), which accounted for significant revenue in 2025.