I'm always on the lookout for investments that I think can deliver strong returns. ASX growth shares may be able to deliver the most pleasing results thanks to the power of compounding.
Investors may expect an ASX growth share to deliver strong revenue growth in the next 12 months, but the market can underestimate what the business can achieve over five or ten years. I think that's why some of the best-returning stocks over the long-term are ones that are rapidly scaling.
If I had $5,000 to invest in ASX growth shares, I think the two names below are two of the most compelling ones right now.
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Bailador Technology Investments Ltd (ASX: BTI)
This business describes itself as a growth capital company focused on the technology sector. Its portfolio of IT companies have global addressable markets, are run by founders, have proven business model with attractive unit economics, international revenue generation and the ability to generate repeat revenue.
It's invested in a number of areas, including hotel management and distribution software, financial advice and investment management software, digital healthcare, tours and activities booking software, volunteer management software, an AI-enabled property investment platform, fitness and wellness software, and more.
At the end of 2024, the business had 10 investments, with $498 million of portfolio company revenue (and around 90% is recurring revenue), a portfolio company revenue growth rate of 42% and a gross profit margin of 67%.
I'm not expecting Bailador's companies to continue growing at 42% every year forever, but it shows the speed of which the business is increasing in size.
Why does the ASX growth share seem so cheap? Well, every month, Bailador tells investors what its (relatively conservative, in my view) underlying value is. At 30 April 2025, it had a post-tax net tangible asset (NTA) per share of $1.52. The current Bailador share price is valued at a discount of more than 31% to this, which I think is a big, appealing discount.
Tuas Ltd (ASX: TUA)
Tuas is an ASX telco share that provides mobile and broadband services in Singapore.
The key to its success so far has been attracting customers in the Asian market, who are looking for a good value mobile offering. In the first half of FY22, it had 487,000 mobile services and this had grown to 1.16 million in the first half of FY25.
In the FY25 half-year result, it reported 23.7% year-over-year growth of mobile subscribers, helping revenue jump 33.8%. I believe Tuas can continue gaining market share in Singapore.
It's also starting to grow in the broadband sector as well. In HY25, it reached 14,347 broadband subscribers, up from 3,287 in the second half of FY24. I believe there is plenty of room for the company to grow here.
Pleasingly, the ASX growth share is demonstrating an ability to grow its profit margins as it grows larger, which I believe bodes well for future profit growth. The HY25 result saw operating profit (EBITDA) increase by 97% and net profit rose $6.5 million to $3 million.
I'm expecting the business to expand in other Asian countries in the coming years, which could significantly expand its growth runway and help it generate earn bigger profits.
