LIPPO Ltd has reported a sharp increase in net profit to $211.02 million, from $16.19 million, for last year as a result of a series of acquisitions sustained by massive fund-raising exercises. After extraordinary gains of $28.15 million, profit attributable to shareholders amounted to $239.17 million, far surpassing the $19.73 million for 1991. Despite the big jump in profits, earnings per share rose only 63 per cent to 20.3 cents because of the huge dilution due to sizeable new issues. The board recommended a final dividend of 3.5 cents a share compared with three cents previously. Analysts agreed that Lippo had yet to capitalise on the earnings base created by its new structure. Lippo has built up as an investment holding group comprising six listed companies with exposure to banking, property, travel and development projects in China. Group chairman Stephen Riady said yesterday the group would look to further consolidate the business following the series of acquisitions in the second half of last year. ''The group structure will remain unchanged. When investment opportunities arise, they would only be concentrated under the various companies under the group,'' he said. Mr Riady believed this year's result would be far more representative of the earnings potential of the group's business. Finance director Thomas Clydesdale said the group had enough cash to face any capital commitment in China or Hongkong. At the end of last year, shareholders' funds totalled $2.32 billion while debt amounted to only $161 million, he added. Property disposals accounted for the bulk of last year's profits. The group sold 19 units in Lippo Sun Plaza, Tsim Sha Tsui, to different parties for a total of $126 million. Analysts reckoned that earnings from property elements would continue to be the impetus for expected exceptional growth this year. However, in the long run, the group's attractiveness would lie in its enormous potential as a serious China play, they said. Mr Clydesdale admitted that the China strategy was still evolving, given the short time the mainland assets had been injected. The fact that a large number of mainland projects were only at the letter of intent stage also called for caution and slow expansion, he said. In November last year, Lippo set up a joint venture with the Fuzhou municipal government to develop a number of infrastructure projects. The development of the entire project, which is the biggest by Lippo so far, was said to span 20 to 30 years. Mr Riady said Lippo was prepared to limit its investment in China to 20 per cent of its total assets for the next three years. The strategy was to look for opportunities through its merchant banking division and then sign letters of intent with potential mainland equity partners, he said. Mr Riady stressed that agreements would be signed only after thorough investigation of the projects' earnings potential. Apart from those previously announced, Lippo's subsidiary, Hongkong China Ltd (formerly EIE Development) last month signed a letter of intent with the Beijing municipal government on the land-use rights for two parcels of land in Wangfujing, the commercial and shopping centre of the capital. Lippo planned to retain a majority stake in the projects and to build retail and office properties. Mr Riady said these were also very long-term projects as resettlement might have to take two to three years. During the year Lippo bought interests worth about $2.8 billion through the issue of new shares and convertible notes to investors and major shareholders including Cheung Kong (Holdings) and China Resources (Holdings). These include substantial stakes in Hongkong Chinese Bank, Hongkong China Ltd, Morning Star Holdings and Asia Securities International. Mr Riady said Lippo would mainly look after the China projects, while Hongkong China Ltd and Asia Securities would be responsible for property investment and strategic investment, respectively. On the banking side, Hongkong Chinese Bank set up a representative office in Shanghai early this month while preparation for the opening of a joint-venture bank in Shenzhen was in progress. Mr Riady said the venture would be with the Industrial and Commercial Bank of China (Shenzhen branch) and the China Travel Service Group.