US Cold War Erupts & Brilliant Company Profile - Stoic Markets
Tensions have never been this high between these powers, but this gives us a chance to invest somewhere special...
US & China cold war turmoil
Relations between the United States and China have entirely disintegrated in the last few years with tensions rising over US support of Taiwanese sovereignty or as the Chinese believe, the US meddling with their plan for reunification and rejuvenation back to one Chinese state.
A war is brewing, with balloons, micro-chips and aggressive words being thrown back and forth.
See, this war has not been yet reached military action, at least publicly given the military intelligence war has been raging on for years.
Instead, this war has mainly been a series of political and economic moves to try and tear down each other economies.
Currently the Trade war between the nations is still hot. The United States imposes a 25% tariff on $250 billion of imports and a 7.5% tariff on $112 billion worth of imports all from China.
It started under Trump, but this action is now bi-partisan with both Dems and Reps supporting the brewing Cold War.
Still, whilst this move damaged the US consumers, it was immensely successful at reducing the US’s dependence on Chinese materials, reducing Chinese soft power.
Even without the issue of a trade war, both countries appear to be in a long-awaited decline.
The US is suffering from high inflation, a ballooning debt crisis, and stagnant growth while China is currently experiencing the greatest housing market collapse in history, while watching youth unemployment sky-rocket.
So, if both China and the US are struggling against each other, taking self-inflicted damage to slow each other down, what if a new superpower challenger was to emerge and overtake both of the nations? This is what we see happening in India, a fellow BRICS nation.
India has been a consistently high growth economy in recent decades outgrowing almost all the G7 nations, and most of its BRIC counterparts since the turn of the millennium.
Whilst, they still have a long way to go before overtaking the giants of the world, the US and China, their contribution to the total GDP of all BRICS has been and is predicted to continue to grow at far greater rate than any other economy.
According to Goldman Sachs, India will even overtake the U.S. to become the world’s second-largest economy by 2075, with its burgeoning population, progress in innovation and technology, higher capital investment and rising worker productivity.
With such a growing economy, always comes huge potential for investors like ourselves to make huge returns in the future.
For example, the Pay-TV Industry in India has experienced double digit figures of growth in the post pandemic period reporting yearly growth figures of 19.1% in 2021-2022 and 15.6% in 2022-2023.
By 2025, over 96 per cent of India's pay-TV homes will be digitised with the industry set to reach $12.3 billion in revenue by the same year.
Now let me introduce you to Lytus Technologies Nasdaq:LYT a leading online platform services company with more than 4M active users and monthly customers across all major cities in India, as well as the US.
They offer a wide array of services including access to over 450 channels bringing western entertainment to India, currently trading at $0.43 a share, and a market cap of $16.2M.
Alongside these offerings, LYT is actively engaged in strategic alliances with numerous major global corporations.
These alliances position LYT Technologies for further growth in the near future especially in focus markets like the growing net television and broadband services where its expected to register a compound growth rate of 15.43%.
Currently India's estimated internet users are set to reach 900 million by 2025 with this increased internet penetration likely to lead to the expansion and growth of the India wired broadband market in the coming years.
In terms of financials, LYT technologies has showed strong revenue figures of $6.4 million in the most recent six month period, with healthy liquidity of $4 million held in cash and cash equivalents.
They have also been able to adjust their balance sheet into a secure position by increasing their total assets by 7.7% from last year to $93 million and decreasing their total liabilities by 7.2%.
LYT insiders have great confidence in the company, with 85% of shares being owned by insiders.
LYT even recently acquired a 51% stake in Sri Sai Cable and Broadband Private Limited, a company with an enterprise valuation of $25–30 Million which has boosted their subscriber base by over 1 million, a clear sign of LYT’s dedication to expand its footprint in India, running in line with their strategic growth plans.
Emerging markets has always stood out to me as an opportunity to get in at the ground floor…
Where better to invest than in countries where the economy is growing at vastly higher rates than western countries?
Overall NASDAQ: LYT is a very interesting company in a high growth and stable market and it’s definitely going on my watchlist, and should be on yours as well.