Tuas shares (ASX: TUA) took holders on quite the rollercoaster ride, shifting from a 6.8% gain to a three year low close, down 23.39% on the day. This kind of volatility may be tough to stomach for most, yet for TUA holders, it is almost par for the course this year.
The Tuas share price kicked off Wednesday’s session at A$2.49, up solidly from the prior close at A$2.33, as early readings of the FY26 results pointed to a meaningful earnings beat. That optimism proved short-lived however, as selling pressure came in steadily through the session, with repeated early attempts to stabilise around the A$2.00 level failing to hold.
Heading into today’s open at A$1.78, the stock is at a new three-year low, as persistent rejection of support brought the company’s market cap below the symbolic A$1 billion threshold to A$978.89 million.
Why are Tuas shares down?
On the surface, Tuas’s FY26 results were not all that bad. Revenue rose 24% year-on-year to S$187.6 million, edging past the S$185.7 million consensus estimate for a modest 1% beat. Underlying EBITDA climbed 22% to S$83.7 million against an S$83.0 million estimate, with the underlying margin holding steady at 45%, a level that speaks to the operational efficiency of the company’s Singapore mobile subsidiary, SIMBA Telecom.
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Statutory EBITDA came in at S$80.1 million after accounting for pre-acquisition costs related to the now-lapsed M1 transaction.
The most striking headline in the results was the performance at the net profit line. Underlying net profit after tax reached S$29.6 million, a 30% beat against the S$22.7 million estimate and a near-quadrupling from the S$6.9 million reported in FY25. Statutory NPAT of S$26.0 million also comfortably exceeded the S$17.5 million estimate. The result demonstrated meaningful operating leverage as SIMBA’s fixed-cost network base begins to absorb a growing subscriber base.
That subscriber growth, however, fell short of expectations. Active mobile subscribers reached 1.458 million at year-end, representing 16% growth year-on-year but coming in 3% below the 1.505 million modelled. Net additions of approximately 204,000 fell short of the 251,000 projected, a gap that markets interpreted as a potential signal of competitive friction or elevated churn in Singapore’s increasingly contested mobile market. Gross mobile ARPU stood at S$9.42, whilst fixed broadband subscriptions continued to build, reaching approximately 62,000.
On the strategic front, the defining event of the reporting period was the collapse of Tuas’s proposed S$1.43 billion acquisition of M1 Limited. The deal lapsed after hitting its May 21 long-stop date without receiving clearance from Singapore’s Infocomm Media Development Authority (IMDA).
Guidance in line, costs rise
Management guided FY27 mobile and broadband capital expenditure to S$50–55 million, a figure broadly in line with prior expectations. The more consequential guidance item, however, was the disclosure of an additional S$15–30 million in combined capex and opex required in FY27 to satisfy cybersecurity obligations arising from SIMBA’s designation as a Critical Information Infrastructure operator in Singapore. That unexpected compliance burden directly pressures near-term free cash flow and introduces further uncertainty into the earnings trajectory at precisely the moment markets are already demanding clarity on the regulatory front.
The central question confronting Tuas at this point is not whether the business is operationally sound, but whether the regulatory overhang can be resolved in a manner that allows the market to re-engage with the underlying fundamentals.
Morgan Stanley has maintained an Overweight rating on the stock and has characterised the current sell-off as a buying opportunity. The bank’s analysts argue that even an unfavourable outcome from the IMDA spectrum investigation is likely already reflected in the share price, and that the intrinsic value of SIMBA’s subscriber base and network infrastructure supports a materially higher valuation. At current levels, Tuas trades at approximately 4x FY27 EV/EBITDA, a striking discount to its historical trading multiple of around 34x, and well below comparable regional telco peers.
That valuation argument is compelling in isolation, but markets have so far declined to act on it. The combination of an unresolved regulatory investigation with no disclosed timeline, the permanent loss of the M1 consolidation pathway, a subscriber growth miss, and a new and quantified compliance cost burden has created a cocktail of uncertainty that is difficult to price with confidence.
With Tuas shares giving back more than the earlier 7 day rally (14.78%) in one swoop, and now trading 74.79% lower since the start of 2026, pressure is firmly on the bulls to find a defensible floor.
