I believe one of the best ways to achieve big returns is to focus on ASX growth stocks that can grow significantly over the next five to ten years. I'm going to talk about Tuas Ltd (ASX: TUA) shares, one of the largest positions in the growth part of my portfolio.
Tuas isn't a famous ASX share (yet), but I think it has the potential to become a future blue-chip if it can execute on its potential.
The business already has a market capitalisation of $2.6 billion, and I think future profit growth could send it to much bigger heights.
What does the ASX growth stock actually do? It's a telecommunications business based in Singapore. For a variety of reasons, I'm optimistic on its future.
Strong revenue potential
I think one of the key factors of success for an ASX growth stock is its ability to generate and grow revenue.
The business has already grown significantly by achieving subscriber growth. At the last update, as of 31 January 2025, the business had reached 1.16 million subscribers, representing 23.7% year over year growth. Tuas is winning customers thanks to its low-cost offering.
Given how rapidly the business is growing subscribers, I think it still has plenty of growth left in the Singapore mobile.
Additionally, the ASX growth stock is now working on becoming a sizeable player in Singapore's broadband market too. At the end of the FY25 first half, the business had just 14,347 broadband subscribers. It has over 1 million mobile subscribers it can market to at a cheap price, so I'm hopeful it can reach a noteworthy scale within five years.
Improving profit margins
I believe Tuas is the type of business that can grow its profit margin over the coming years, potentially above market expectations.
We've already seen the company's profit margins increase in the last few years, and I believe the pace of improvement suggests the company is on a very good track.
In the first half of FY22 it had an operating profit (EBITDA) margin of 24.6%, which grew to 36.1% in the first half of FY23 and rose again to 41% in the first half of FY24. The EBITDA margin improved to 43.75% in the second half of FY24 and reached 45.2% in the first half of FY25.
I think the company's EBITDA margin and net profit after tax (NPAT) margin can continue climbing every year thanks to the company's resilient base earnings and its improving scale benefits.
Growth into other countries?
The reason I believe the business has so much potential is because of the possibility to grow in other Asian countries that have much larger populations than Singapore's (of approximately 6 million).
Expanding in countries like Malaysia and Indonesia could give Tuas a much larger addressable market and a much longer growth runway.
I think this ASX growth stock is one to watch for its very exciting future.
