I think these two ASX shares have a lot of growth potential to deliver strong returns in the coming years. I’d buy them in July.
Tuas Ltd (ASX: TUA)
Tuas is a fast-growing ASX telco share which operates in Singapore. The Asian island nation is not exactly a huge market, but it’s large enough for Tuas to become a good-sized business. I also think there’s potential for Tuas to expand to other Asian countries and expand its addressable market.
It’s reporting exactly what shareholders want to see – good subscriber growth and improving profit.
In the FY24 first half result, its active mobile subscribers jumped 35.7% year on year to 938,000. This led to a 38% rise in revenue to $54.7 million, which included an increase of the average revenue per user (ARPU) to $9.56 per month, up from $9.37 per month in FY23.
It also revealed an increase in the EBITDA margin from 36% last year to 41%. Tuas also said that the EBITDA soared 56% to $22.4 million.
What this says to me is that Tuas just need to keep growing subscriber numbers and it can deliver pleasing growth of revenue, EBITDA and, soon, net profit after tax (NPAT).
Tuas is also working on its broadband offering, which could lead to more subscribers and more revenue per subscriber for the ASX share.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This exchange-traded fund (ETF) could be one of the leading ways to achieve diversification and returns.
It invests in various US shares that Morningstar analysts believe have strong competitive advantages that are expected to endure for at least a couple of decades.
But, the MOAT ETF only invests in these good companies when the analysts believe the share is at an appealing valuation compared to their estimate of fair value. In other words, it only invests in these good businesses at a good price.
Past performance is certainly not a guarantee of future performance with this ASX share. But, in the last five years it has delivered an average return per year of 16.2%.
