However, with the property sector facing a downturn due to high interest rates and the Meikarta project creating negative sentiment, analysts see other businesses in the conglomerate’s portfolio play a greater role in the group’s future performance.

Owned by the Riady family, Lippo Group includes several publicly listed companies operating mainly in the property sector, such as Lippo Karawaci, Lippo Cikarang and Gowa Makassar Tourism Development (Tanjung Bunga). Their stocks gained popularity with prices hitting all-time highs between 2013 and 2015, but they have gone down since then.

According to the latest financial report of Lippo Karawaci, where all Lippo Group's property units are consolidated, the conglomerate's real estate business posted Rp 2.79 trillion in revenue at the end of the third quarter last year, marking a 21.8 percent year-on-year (yoy) decline.

Earnings before interest, taxes, depreciation and amortization (EBITDA) of its property business decreased at an even faster rate, falling 47.7 percent yoy to Rp 418 billion over the same period.

To push up sales this year, the conglomerate has announced plans to sell more landed residential houses and launch new apartment projects.

Jono Syafei, equity research analyst at Henan Putihrai Sekuritas, attributed the drop in Lippo Group's property revenue to the general decline in the industry following the pandemic and Bank Indonesia (BI) interest rate hikes.

Meanwhile, Infovesta Utama research and consulting manager Nicodimus Kristiantoro noted that Lippo Group was traditionally a big property player but added that competition in that sector had intensified with the rise of new players offering more innovation.

"There is a potential for Lippo Group's stock price to increase again in the future when the trend of interest rate hikes stops and if Meikarta's problems can be solved quickly," Nicodimus told The Jakarta Post on Friday.

Read also: Not back to normal for commercial real estate post-PPKM: Property firms

The Rp 287 trillion Meikarta project was launched by a Lippo Group-led consortium in 2017, but progress has been obstructed by foreign investors' withdrawal and several lawsuits.

The conglomerate has sold its majority share in Meikarta, but members of the House of Representatives in a hearing last month said it should still be held responsible for the project’s performance.

"BI is forecast to keep the [benchmark] interest rate at 5.75 percent until the end of the year. If there is a cut next year, that would create positive sentiment for Lippo Group's portfolio," Nicodimus said.

Post-pandemic strength of health care

Henan Putihrai's Jono expressed his view that Lippo Group's healthcare subsidiary, Siloam Hospitals, could produce a positive result as demand for healthcare services was increasing among Indonesia’s growing population.

Siloam's latest financial report, meanwhile, for the third quarter of 2022, shows revenue dropping 3 percent yoy to Rp 6.93 trillion and EBITDA plummeting 14.7 percent to Rp 1.36 trillion.

Joni said this was due to "a normalization" after Siloam had enjoyed significant COVID-related top-line growth last year. The trend also affected other healthcare companies, he said.

Contradiction in retail

Meanwhile, Infovesta Utama's Nicodimus said Lippo Group's retail business had an upside this year as people's buying power had increased.

"Aryaduta, the conglomerate's hospitality business, is also predicted to grow due to more national off-days and holiday events this year," Nicodimus noted.

Lippo Group's retail units Matahari Department Store (MDS) and Matahari Putra Prima (MPPA) posted solid growth for the full year of 2022.

MDS' top line jumped 15.55 percent yoy to Rp 6.45 trillion, while MPPA saw its revenue rise 5.44 percent yoy to Rp 7.02 trillion.

However, MDS followed its revenue hike with a 51.5 percent rise in net profit, while MPPA's loss widened increased by 27.28 percent.

Read also: Matahari profit back at pre-pandemic level after 51% rise

The difference between those two retail players lies in their gross margins. MDS, which focuses on fashion products and apparel, had a gross margin of 68 percent last year, while MPPA, which operates supermarket brands Hypermart and Foodmart, only had an 18 percent gross margin.

Still banking on tech sector

Aside from health care and retail, Lippo Group has also achieved a strong performance in its technology provider Multipolar Technology, which booked Rp 3.4 trillion in revenue last year, a 14.9 percent rise over the previous year. It doubled its net profit to Rp 556.1 billion.

The conglomerate's venture capital arm, Venturra, continued to add tech start-ups to its portfolio last year, such as Vietnam-based Rino and Aemi.

Ezaridho Ibnutama, an analyst at Henan Putihrai Sekuritas, said the VC unit had begun to shift its attention toward health care, new retail as well as tools for small and medium enterprises.

"With more people anticipated to take advantage of [opportunities for] socializing in this endemic transition [from the COVID-19 pandemic], it appears that Venturra is seeking to capture that rebound in people-based industries," Ezaridho told the Post on Friday.

However, the conglomerate has a track record of selling its subsidiaries or merging them with other companies. For example PT Link Net, the operator of broadband internet provider First Media, was sold to XL Axiata last year.

In February, the Financial Services Authority (OJK) announced that Lippo Group's Nobu Bank would merge with Bank MNC Internasional, part of the MNC Group chaired and founded by another Indonesian tycoon, Hary Tanoesoedibjo.

Lippo Group did not respond to The Jakarta Post’s request for comment.