FBGL

Business Context and Reporting Period

FBS Global Ltd (Ticker: FBGL) is a Cayman Islands holding company with primary operations in Singapore through its subsidiary, FBS SG. The company specializes in interior fit-out works, construction, and building services, with a focus on green building projects. This Form 20-F covers the fiscal year ended December 31, 2024. The company completed its Initial Public Offering (IPO) on February 7, 2025, listing on the Nasdaq Capital Market.

Key Financial Metrics (Year Ended Dec 31, 2024)

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased by 36.5% (SGD 8.0 million) compared to 2023. This was primarily due to fewer new projects and the completion of major projects where revenue was recognized in 2023. A significant SGD 26 million project (ICA project) was delayed until April 2025.
• Profitability: The company swung from a net income of SGD 4,685 in 2023 to a net loss of SGD 814,366 in 2024. Gross margin compressed from 12.1% to 9.0% due to higher costs on specific projects and customer dissatisfaction regarding quality.
• Cost Structure: While Cost of Revenue decreased by 34.3% in line with revenue, Overhead costs increased by 88.0% (SGD 655,000) due to increased storage fees for a subcontract project.
• Liquidity Position: The company moved from positive working capital in 2023 to a working capital deficit of SGD 1.46 million in 2024. Operating cash flow turned negative (SGD 122,071) compared to a positive SGD 3.63 million in 2023, driven by a decrease in accounts payable and contract liabilities.

Guidance, Outlook, and Risks

Outlook and Recent Developments:

• IPO Proceeds: The company raised approximately USD 8.8 million in net proceeds from its February 2025 IPO.
• Project Pipeline: Management anticipates revenue growth in 2025 driven by the delayed ICA project (SGD 26 million) and two other recently awarded contracts totaling approximately SGD 30 million.
• Expansion: In March 2025, the company acquired EFMK Supplies Limited to establish a presence for interior works in Hong Kong, Macau, and the PRC.
• R&D: A USD 500,000 contribution was made in February 2025 for a research agreement on fire protection paint coatings.

• Internal Controls: The company identified three material weaknesses in internal controls over financial reporting, including insufficient accounting personnel, lack of formal risk assessment policies, and inadequate IT security procedures.
• Customer Concentration: The top three customers accounted for 65% of 2024 revenue (24%, 22%, and 19%). Loss of these clients would materially impact operations.
• Regulatory & Labor: Operations are heavily dependent on foreign workers (approx. 75% of workforce). The company faces risks related to foreign worker levies, quotas, and past fines for accommodation non-compliance.
• Listing Status: The company noted its share price has been below the Nasdaq minimum bid price of $1.00 since March 2024, posing a risk of delisting if not corrected.

Investor Verification Checklist

• Project Commencement: Verify the actual start date and progress of the SGD 26 million ICA project and the two SGD 30 million contracts to confirm 2025 revenue guidance.
• Internal Control Remediation: Review the specific steps taken to address the three material weaknesses in internal controls and the timeline for achieving compliance with Section 404 of the Sarbanes-Oxley Act.
• Customer Retention: Assess the stability of relationships with the top three customers who comprised 65% of 2024 revenue.
• Working Capital Management: Monitor the company's ability to reverse the working capital deficit and manage cash flow given the negative operating cash flow in 2024.
• Share Price Compliance: Track the share price to ensure it meets Nasdaq listing requirements to avoid delisting.