The S&P/ASX 300 Index (ASX: XKO) share Tuas Ltd (ASX: TUA) has suffered a big, painful fall this year. The ASX telco share has dropped by around 63%, as the chart below shows.
Tuas is one of the holdings inside the WAM Capital Ltd (ASX: WAM) portfolio – Wilson Asset Management is a fund manager backing the business.
WAM Capital is one of the largest listed investment companies (LICs) on the ASX, with a market capitalisation not far from $2 billion. It aims to invest in the most compelling undervalued growth opportunities in the Australian share market.
Let's look at why the ASX 300 share is so compelling.
Image source: Getty Images
What happened to the ASX 300 share?
The Wilson Asset Management team described Tuas as a telecommunications company that owns and operates the SIMBA mobile network in Singapore.
WAM noted that the Tuas share price has declined significantly on the back of an update from the Singaporean telecommunications regulator Infocomm Media Development Authority (IMDA), which halted its review of Tuas' proposed acquisition of M1 Limited.
That proposed acquisition did not proceed before the 21 May 2026 deadline because of revelations that Tuas' subsidiary, Simba, may have been using radio frequency bands that it was not authorised to use.
WAM noted that Simba is cooperating with the regulator's investigation and continues to operate its network in Singapore.
Why are Tuas shares an opportunity?
The investment team said that while the news is disappointing, WAM has "strong conviction" in the underlying business which has "outperformed significantly" since the acquisition announcement last year.
WAM believes the ASX 300 share can continue to grow strongly, supported by differentiated products in both the mobile and fixed line space of the Singapoean telco market.
The company's latest update showed significant growth by the business.
In the first half of FY26, Tuas reported revenue growth of 26% to S$91.9 million, with underlying operating profit (EBITDA) jumped 27% to S$42.1 million. Tuas said the faster EBITDA growth reflected "strong operational leverage". Pleasingly, the underlying EBITDA margin improved to 46%, up from 45% in the first half of FY25.
The revenue growth was largely driven by expansion in both mobile and broadband users. Mobile users rose 21.7% to 1.4 million and the relatively new broadband division saw subscriber growth of around 32,000 to 46,000.
It's important to remember that the business generated S$18.7 million of underlying net profit and S$50.1 million of operating cash flow in the first half of FY26. If it can grow earnings from here, it can justify a higher valuation.
Plus, it now has a large amount of cash to use for growth. With the M1 deal not going ahead, it could use that money to expand into other markets.
Tuas is certainly a higher-risk investment with the company under regulatory attention, so there may be other ASX shares that may have an easier path to growth.
