The Australian stock Tuas Ltd (ASX: TUA) has a great future ahead of it, and I'm planning to buy more shares soon.
The company is listed on the ASX, though its operating business is based in Singapore.
I've regularly highlighted the exciting prospects of this business, and recent news has made me believe that the ASX share is an even more exciting idea.
It has announced it's acquiring another Singaporean telco called M1. The Australian stock is carrying out a capital raising for part of the funding of the deal, and I plan to take part in the share purchase plan (SPP). But, I also believe the Tuas share price is still attractive for a long-term buy despite its recent jump.
I'll outline why this acquisition is so compelling, in my view. It added to the excitement I already had about the Australian stock when it was reporting strong revenue growth and rising profit margins.
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Positives about the Australian stock combining with M1
M1 provides a range of communication services to both retail and enterprise customers. That revenue largely comes from mobile services, fixed services, and handset and equipment sales.
The deal adds significant scale to Tuas. As a reminder, in the FY25 half-year result – a six-month period – Tuas made $73.2 million in revenue, $33.1 million in operating profit (EBITDA), and $3 million in net profit.
According to Tuas, in the 12 months to April 2025, M1 generated S$806 million in revenue, S$195 million in EBITDA, and S$74.3 million in net profit after tax (NPAT). The deal is described as "highly EPS [earnings per share] accretive for Tuas shareholders" from year one. At 30 April 2025, M1 had over 2 million mobile subscriptions and 223,000 fibre subscriptions.
The acquisition has several benefits. The deal provides Tuas with an expanded mobile market share, an acceleration into broadband, and an established enterprise platform. It also provides significant operating and capital expenditure synergies, complementary spectrum assets, "deep organic engineering expertise", and reportedly an enhanced customer experience.
Tuas noted that with its own operations, it's on track to deliver growth of more than 200,000 mobile subscribers in FY25, as well as a higher operating profit (EBITDA) margin. It also noted an expansion into 7-Eleven and all Changi Airport terminals as new sales channels.
Foolish Takeaway
This Australian stock is providing significant organic growth, and it just announced a game-changing acquisition that will significantly boost its profit and ability to challenge the other Singaporean telcos.
Plus, I think the business now has more financial firepower to think about capturing market share in other countries such as Indonesia and Malaysia.
I'd be very happy to buy Tuas shares today.
