Lippo E-Net denies shifting core business<\/p>\n
JAKARTA (JP): Publicly listed Lippo E-Net's president Billy
\nSindoro dismissed on Thursday media reports that the company had
\nchanged its core business from insurance to internet services.<\/p>\n
\"No, we haven't yet changed our core business (to Internet
\nservices) as reported by the media,\" Billy said at the company's
\npublic announcement at the Jakarta Stock Exchange (JSX) office.<\/p>\n
Billy's dismissal was contradictory to the current perceptions
\nof the media, analysts and investors about the company.<\/p>\n
Lippo E-Net, formerly known as Lippo Life, recently
\ntransferred its life insurance portfolio to its non-listed
\naffiliate life insurance company PT Asuransi Jiwa Lippo Utama
\n(AJLU) following the purchase of the life insurance company's 70
\npercent stake by American International Group, Inc. (AIG) early
\nthis year.<\/p>\n
Billy said that the company still focused most of its business
\nactivities on life insurance and the full switch to Internet-
\nrelated business was just a choice.<\/p>\n
\"It is the company's choice of new investment. It is not a
\nchange of core business,\" he said arguing that Lippo E-Net still
\nran the life insurance business through its 30 percent ownership
\nin AJLU.<\/p>\n
Lin Che Wei, the head of research department at SG Securities,
\nsaid investors should not fall into the confusion of whether
\nLippo E-Net had changed its core business.<\/p>\n
\"What is important is the value driver of the company. For the
\ncase of Lippo E-Net, it is easier to understand that the company
\nwill have internet business as its value driver as most of the
\ncompany business will mostly be in internet business,\" he said.<\/p>\n
Lippo E-Net earlier said it would invest as much as Rp 1
\ntrillion in the internet business, which it claimed has bright
\nprospect.<\/p>\n
The main source of the Rp 1 trillion would be from proceeds of
\nthe company's planned private placement. Other sources are from
\nthe company's internally generated cash, according to Billy.<\/p>\n
He said management was currently doing a preliminary study for
\nthe Rp 1 trillion planned investment to determine the length of
\ntime to reach the Break-Even Point (BEP).<\/p>\n
\"We are in the preliminary stage of our study. We will
\nannounce the result to the public within six months,\" Billy said.<\/p>\n
Commenting on the above planned investment, equity analysts
\nattending the public announcement placed strong doubts as Lippo
\nE-Net, belonging to Lippo Group, was known for its inconsistency
\nin its long term business focus.<\/p>\n
\"They were focusing on the banking business, then property,
\nlife insurance and now the internet business,\" an analyst said on
\ncondition of anonymity.<\/p>\n
\"The internet business has a long investment horizon, Lippo
\ncompany cannot stay that long,\" he added.<\/p>\n
As with the attending journalists, most equity analysts at the
\nannouncement declared their dissatisfaction with the explanation
\nfrom Lippo E-Net's plan to focus on the internet business.<\/p>\n
\"How can Lippo E-Net raise internally generated cash, when all
\nLippo Group operating companies are in the red?\" questioned Che
\nWei. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/lippo-e-net-denies-shifting-core-business-1447893297",
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