Tuas Shares Jump as Profits Double, and More

Tuas shares (ASX: TUA) rallied sharply on Wednesday after the Singapore-focused telco reported a more-than-doubling of statutory profit, though regulatory uncertainty around its proposed S$1.43 billion acquisition of M1 capped gains and kept markets cautious about the path ahead.

The Tuas share price had a volatile day, closing 3.51% higher at A$6.20, having earlier spiked as much as 10% intraday following the release of its half-year results. The volatile session reflected strong enthusiasm for the underlying operational performance, tempered by lingering concerns over whether Singapore’s Infocomm Media Development Authority will approve the transformational M1 acquisition in time, or at all. Trading volumes were elevated as markets digested the dual narrative of solid execution and deal-related risk.

The stock has been under pressure since announcing the M1 transaction in August 2025, sitting 25% lower, with the substantial equity raising and regulatory overhang weighing on sentiment. Wednesday’s result provided a timely reminder that beneath the M&A speculation lies a fast-growing challenger telco with genuine momentum.

Fundamentals Support The Bounce

Tuas delivered a solid set of numbers for the six months ended 31 January 2026, underscoring the strength of its Simba-branded mobile and broadband operations in Singapore. Revenue climbed 26% year-on-year to S$91.9 million, up from S$73.2 million in the prior corresponding period. Statutory profit after tax surged 173% to S$8.2 million, compared with S$3.0 million a year earlier, while basic earnings per share nearly tripled to 1.53 cents from 0.65 cents.

Underlying EBITDA, which excludes S$10.5 million in one-off costs related to the proposed M1 acquisition, rose 27% to S$42.1 million, demonstrating meaningful operating leverage as the business scales. Net tangible assets per share strengthened to S$1.30, up from S$0.70 at the same point last year, reflecting both earnings retention and the recent capital injection.

The company elected not to declare an interim dividend, signalling management’s intent to preserve cash for the pending acquisition and ongoing network investment. Cash and term deposits stood at a healthy S$478 million at 31 January 2026, bolstered by a S$364.5 million equity raising completed in the second half of 2025 to help fund the M1 deal.

Simba, Tuas’ main Singapore subsidiary, continued to gain market share across both mobile and fixed broadband. Monthly paid mobile active services reached approximately 1.41 million at the end of January, up from 1.25 million six months earlier and 1.16 million a year ago. The trajectory suggests Simba is successfully converting Singapore consumers with its value-focused, high-data plans, despite intense competition from incumbents Singtel and StarHub, as well as M1 and other mobile virtual network operators.

Broadband subscriber growth was even more striking.

Simba’s fibre broadband base surpassed 46,000 customers, up sharply from just over 14,000 a year earlier. The rapid uptake reflects both aggressive pricing on high-speed plans and improving network quality. Simba’s fibre broadband service won Ookla’s awards for “Singapore’s Fastest Internet Download” and “Most Reliable Internet Speed” for the second half of 2025, lending marketing credibility to the challenger’s claims of premium performance at disruptive price points.

What To Make of The M1 Acquisition

The proposed acquisition of M1 Limited remains the defining strategic question for Tuas. Announced in August 2025, the all-cash deal values M1’s telco business, excluding its ICT operations, at S$1.43 billion on a debt-free, cash-free basis. The transaction would vault Tuas from a fast-growing niche player into a full-service Singapore telco with combined pro-forma revenue exceeding S$900 million and EBITDA above S$250 million.

Management has consistently framed the deal as earnings-per-share accretive from year one, with significant expected synergies from converging mobile and fixed networks, consolidating back-office operations, and cross-selling Simba’s consumer products into M1’s enterprise and postpaid customer base. Funding is in place: Tuas has completed an equity raising of approximately A$385 million (with a further A$50 million targeted via a share purchase plan) and secured a fully underwritten S$1.1 billion acquisition debt facility.

However, the transaction remains subject to approval by Singapore’s IMDA, and as of late March 2026, no final decision has been announced. Markets are increasingly focused on the ticking clock: the original offer to Keppel Konnect and Konnectivity was reportedly valid for six months from around 26 September 2025, implying a potential lapse date around 26 March unless extended in writing. Regulatory watchers note that the combination would significantly consolidate capacity on the shared 5G network operated by M1 and StarHub, raising questions about competition dynamics, network performance, and consumer pricing.

Local commentary is divided. Some analysts argue the deal could enhance network efficiency and service quality, ultimately benefiting consumers through better infrastructure investment. Others warn that reducing the number of credible mobile competitors in a small market like Singapore could lead to upward pressure on prices and reduced innovation, particularly if the merged entity gains excessive pricing power.

Executive chairman David Teoh, the founder of Australia’s TPG Telecom and a veteran of telecom M&A and network rollouts, struck an upbeat tone in his statement accompanying the results.

Teoh’s track record of building value-focused challenger telcos lends credibility to the strategic vision, and markets have historically given him the benefit of the doubt on execution. Yet the absence of an interim dividend and the ongoing regulatory uncertainty suggest management is prioritising optionality and balance-sheet strength over near-term shareholder returns, a posture that may frustrate income-oriented holders if the M1 timeline stretches further.

Outlook

The bull case for Tuas rests a strong core business and a potentially transformational acquisition. Even without M1, Simba is taking share, improving margins, and generating positive cash flow in a mature, competitive market. The network quality awards and sustained subscriber growth suggest the value proposition is resonating, and there is scope to gradually migrate customers to higher-ARPU plans as 5G adoption deepens and fibre broadband penetration rises.

If the M1 acquisition proceeds on current terms, Tuas would gain immediate scale, enterprise exposure, and a pathway to meaningful cost synergies. Pro-forma leverage of around 4.0 times EBITDA is manageable for a telco with stable cash flows, and the company’s history of disciplined capital allocation suggests deleveraging would be a priority. The deal would also diversify revenue streams and reduce reliance on the consumer segment, which is inherently more price-sensitive and cyclical.

The bear case centres squarely on regulatory risk and execution complexity. If IMDA withholds approval, demands onerous behavioural remedies, or forces a material renegotiation of terms, the equity story unravels quickly. Tuas would be left with a large cash pile earning minimal returns, significant shareholder dilution from the recent capital raising, and questions about what comes next strategically. Even if the deal is approved, integrating M1’s operations; including its shared 5G network with StarHub, enterprise sales force, and postpaid base, into Simba’s lean, digital-first culture will be challenging and could temporarily pressure margins and require additional capex.

From a valuation perspective, the stock is trading with an embedded M&A risk discount. At A$6.20, the market is clearly pricing in some probability that the deal may be delayed, altered, or blocked, even as it gives credit for the strong standalone performance. Catalysts to watch include any IMDA announcement, potential offer extensions or amendments, and the next set of subscriber and financial updates in the coming months.

Markets are balancing confidence in management’s execution track record against the very real risk that the deal may not proceed as planned, leaving the stock in a holding pattern until Singapore’s regulator tips its hand. For now, the underlying business is firing on all cylinders, but the ultimate payoff for shareholders hinges on a decision that remains frustratingly out of their control.

Analyst Summary: Bull and Bear Cases