Investors looking for stocks in the Real Estate - Operations sector might want to consider either KE Holdings Inc. Sponsored ADR (BEKE) or Zillow (Z) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven s ...

Financial Performance - Total transaction value for the six months ended June 30, 2024, was RMB 1,468.9 billion, a decrease of 16.2% compared to RMB 1,752.1 billion in the same period of 2023[4] - Net income for the six months ended June 30, 2024, was RMB 39.7 billion, relatively flat compared to RMB 39.8 billion in the same period of 2023[4] - Adjusted net profit for the six months ended June 30, 2024, was RMB 40.9 billion, down from RMB 59.3 billion in the same period of 2023[4] - Total net income for the six months ended June 30, 2024, was RMB 39.7 billion, remaining stable compared to RMB 39.8 billion in the same period of 2023[15] - The total transaction volume for the company's existing housing business decreased by 16.3% year-on-year to RMB 131 billion for the six months ended June 30, 2024[15] - Net income from new housing business decreased by 24.9% to RMB 12.9 billion for the six months ended June 30, 2024, compared to RMB 17.1 billion in the same period of 2023, driven by a 32.4% decline in total transaction value to RMB 387.1 billion[16] - Net profit for the six months ended June 30, 2024, was RMB 2,332,526, a decrease of 42.4% compared to RMB 4,049,251 for the same period in 2023[49] - Total comprehensive income for the period was RMB 2,485,589, down 49.8% from RMB 4,941,946 in the previous year[49] Revenue and Income Sources - Non-property transaction service revenue accounted for 34.8% of total net income, a significant increase of 17 percentage points compared to the same period last year[6] - The home decoration and furnishing business saw a total transaction volume growth of 24.0% year-on-year and revenue growth of 59.9% in the first half of 2024, with a profit margin of 31.0%[11] - Net income from home decoration and furniture increased by 59.9% to RMB 6.4 billion for the six months ended June 30, 2024, compared to RMB 4 billion in the same period of 2023, due to synergies between property transaction and home decoration businesses[17] - Net income from housing rental services surged by 176.7% to RMB 5.8 billion for the six months ended June 30, 2024, compared to RMB 2.1 billion in the same period of 2023, primarily due to an increase in managed rental properties[17] Operational Metrics - The number of active stores as of June 30, 2024, was 44,423, an increase of 8.1% from 41,076 stores as of June 30, 2023[4] - The number of active agents as of June 30, 2024, was 411,478, stable compared to 409,054 agents as of June 30, 2023[4] - The company is advancing towards a "one-stop living service platform" model, enhancing shareholder returns and optimizing capital structure[6] - The company is implementing refined operations and technology products to improve agent efficiency and operational capabilities[7] - The company is exploring different store formats to increase community coverage and enhance the one-stop living service experience[8] Cash Flow and Financial Position - The net cash generated from operating activities for the six months ended June 30, 2024, was RMB 3.86 billion, down from RMB 7.43 billion for the same period in 2023, representing a decline of approximately 48.0%[27] - The net cash used in investing activities for the six months ended June 30, 2024, was RMB 6.84 billion, compared to a net cash inflow of RMB 7.63 billion in the same period of 2023[27] - The company reported a net cash decrease of RMB 8.33 billion for the six months ended June 30, 2024, compared to an increase of RMB 12.22 billion in the same period of 2023[27] - As of June 30, 2024, the company's cash, cash equivalents, restricted cash, and short-term investments totaled RMB 59.7 billion, a slight decrease from RMB 60.1 billion as of December 31, 2023[26] - The company reported capital expenditures of RMB 462 million for the six months ended June 30, 2024, aimed at supporting anticipated business growth[33] Debt and Liabilities - The total financial debt as of June 30, 2024, was RMB 20.21 billion, an increase from RMB 17.99 billion as of December 31, 2023, reflecting a rise of approximately 12.9%[28] - The company's debt-to-asset ratio is 42.3%, an increase from 40.0% as of December 31, 2023[31] - The total liabilities increased to RMB 51,794,889 as of June 30, 2024, from RMB 48,130,826 as of December 31, 2023[45] - The total amount of accounts payable reached RMB 6,684,706 thousand, an increase of 5.6% from RMB 6,328,516 thousand as of December 31, 2023[44] Shareholder Returns and Repurchase - The company has repurchased approximately 3.15% of its total shares as of the last feasible date in 2024, with a total expenditure of about USD 5.53 billion for the share repurchase plan[14] - The company plans to expand its existing share repurchase program from USD 2 billion to USD 3 billion, extending the repurchase authorization until August 31, 2025[14] Employee and Operational Costs - The company employs a total of 122,599 employees, with the majority (96,440) in brokerage and support roles[38] - Total operating costs for the six months ended June 30, 2024, were RMB 29.1 billion, slightly up from RMB 28.1 billion in the same period of 2023[18] - The company maintained stable store costs at RMB 1.4 billion for the six months ended June 30, 2024, consistent with the same period in 2023[19] Research and Development - Research and development expenses increased slightly to RMB 92,926 from RMB 90,038, representing a growth of 3.2%[49] - The company recognizes research and development expenses as incurred, which include employee-related compensation and costs associated with R&D functions[120] Accounting and Compliance - The company has not identified any significant issues that would lead to a belief that the interim financial data is not prepared in accordance with US GAAP[42] - The company is currently evaluating the impact of new accounting standards issued in November 2023 and December 2023, but does not expect significant effects on its financial statements[63] - Significant accounting estimates impacting the financial data include revenue recognition, credit loss provisions, and impairment assessments for long-term assets[67] Investments and Subsidiaries - The company operates through various subsidiaries, including 德佑房地產經紀有限公司 and 貝殼找房科技有限公司, all of which are 100% owned and primarily engaged in real estate services in China[56] - The company has expanded its service offerings to include home decoration services through subsidiaries like 北京被窩裝飾有限公司 and 聖都家居裝飾有限公司, both fully owned[56] - The company has established a strong presence in the Chinese market with multiple subsidiaries dedicated to various aspects of real estate transactions and services[56] Market and Economic Conditions - The RMB depreciated approximately 2.4% against the USD for the six months ended June 30, 2024[131] - The company has not faced any significant foreign exchange risk, as most of its income and expenses are denominated in RMB[31]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 58.3 / USD 22.4, indicating a potential upside of approximately 53% / 52% from the current stock price [1][2]. Core Insights - The company demonstrated strong operational resilience and financial stability amidst fluctuations in the real estate market, achieving a year-on-year adjusted net profit growth of 13.9% and a quarter-on-quarter increase of 93.5% in Q2 2024 [1]. - The total transaction volume reached RMB 839 billion in Q2 2024, reflecting a 7.5% year-on-year increase, while net revenue grew by 19.9% to RMB 23.4 billion [1]. - The company has expanded its share buyback program, increasing the authorization from USD 2 billion to USD 3 billion and extending the buyback period until August 31, 2025 [1]. Financial Performance Summary - Adjusted net profit for Q2 2024 was RMB 2.69 billion, with a gross margin of 27.9%, up 0.5 percentage points year-on-year [1]. - The existing home transaction volume increased by 25% year-on-year to RMB 5.707 billion, while new home transaction volume decreased by 20.2% to RMB 2.353 billion [1]. - The home decoration and rental services saw significant revenue growth, with home decoration revenue increasing by 53.9% to RMB 4 billion and rental services revenue soaring by 167.1% to RMB 3.2 billion [1]. Revenue and Profitability Forecast - The company is projected to achieve adjusted net profits of RMB 7.7 billion, RMB 8.5 billion, and RMB 9.5 billion over the next three years [1]. - The report anticipates a revenue increase from RMB 77.8 billion in 2023 to RMB 102.9 billion by 2026, with a compound annual growth rate of approximately 10.1% [3][4].

Investment Rating - The report indicates a positive investment sentiment towards the company, highlighting its commitment to shareholder returns through stock buybacks and dividends [12]. Core Insights - The company has increased its stock buyback plan from $2 billion to $3 billion, extending the duration until August next year, demonstrating a strong commitment to enhancing shareholder value [2][12]. - The company has repurchased a total of $1.39 billion in shares since initiating its buyback program in September 2022, ranking eighth in the Hong Kong stock market for buyback amounts this year [3][13]. - The company reported a 19.9% year-on-year increase in net revenue for Q2, reaching 23.4 billion yuan, with significant contributions from its home decoration and rental services [8][13]. Summary by Sections Stock Buyback and Dividends - The company has executed a total of $1.39 billion in stock buybacks, with a significant portion of shares being canceled rather than held as treasury stock [3][4]. - The company has also declared a special dividend of $600 million, marking its first dividend distribution since its listing [12]. Business Performance - The company experienced a 25% increase in transaction volume for existing homes and a 22.3% increase in home decoration services, while new home transactions declined by 20.2% [7][8]. - The rental service revenue surged by 167.1%, contributing significantly to overall revenue growth [8]. Strategic Transformation - The company is transitioning to a one-stop residential service platform, integrating home decoration and rental services to enhance customer experience and operational efficiency [9][10]. - The company’s operational cash flow turned positive in Q2, with a total of 3.86 billion yuan in cash flow for the first half of the year [10][11]. Long-term Commitment to Shareholders - The company emphasizes its responsibility to long-term investors, showcasing a consistent positive cash flow since 2019 and a low debt ratio of 42.3% [11][12]. - The management expresses confidence in the company's growth potential and commitment to sharing success with shareholders [12][13].

房地产/房地产服务 公 司 研 究 贝壳-W（02423.HK） 2024 年 08 月 14 日 投资评级：增持（维持） | --- | --- | |--------------------|---------------| | 日期 | 2024/8/14 | | 当前股价(港元) | 37.750 | | 一年最高最低(港元) | 55.400/32.400 | | 总市值(亿港元) | 1,384.58 | | 流通市值(亿港元) | 1,337.74 | | 总股本(亿股) | 36.68 | | 流通港股(亿股) | 35.44 | | 近 3 个月换手率(%) | 1.97 | 股价走势图 贝壳-W 恒生指数 -32% -16% 0% 16% 32% 48% 2023-08 2023-12 2024-04 数据来源：聚源 相关研究报告 《政策密集有助主业企稳，新业务扩 张驱动二次增长—港股公司信息更新 报告》-2024.5.27 《持续提升主业份额，等待家装业务 驱动二次增长—港股公司信息更新报 告》-2024.3.16 《主业韧性超预期，家装家居持续拓 展 — 港 股 公 司 信 息 更 新 ...

Investment Rating - The investment rating for the company is "Outperform the Market" [3][38]. Core Views - The company's Q2 revenue and net profit have shown significant improvement both year-on-year and quarter-on-quarter, highlighting the performance resilience of the industry leader [1][4]. - The total GTV (Gross Transaction Value) for Q2 2024 reached 839 billion yuan, representing a year-on-year increase of 7% and a quarter-on-quarter increase of 33% [1][4]. - The adjusted net profit for Q2 2024 was 27 billion yuan, marking a historical second-high, with a year-on-year increase of 13% and a quarter-on-quarter increase of 93% [1][4]. - The company has slightly lowered its profit forecast for 2024-2025, expecting adjusted net profits of 9 billion yuan and 9.2 billion yuan respectively, with corresponding EPS of 2.46 yuan and 2.51 yuan [1][38]. Summary by Sections Revenue and Profit Improvement - In Q2 2024, the company achieved a total GTV of 8390 billion yuan, with a year-on-year growth of 7% and a quarter-on-quarter growth of 33%. Revenue reached 234 billion yuan, up 20% year-on-year and 43% quarter-on-quarter [1][4]. - The adjusted net profit for Q2 2024 was 27 billion yuan, a historical second-high, with a year-on-year increase of 13% and a quarter-on-quarter increase of 93% [1][4]. Business Segment Performance - The existing housing business benefited from positive changes in real estate policies, with a GTV of 5707 billion yuan in Q2 2024, up 25% year-on-year and 26% quarter-on-quarter [1][15]. - The new housing business saw a significant narrowing of revenue decline, with a GTV of 2353 billion yuan, down 20% year-on-year but up 55% quarter-on-quarter [1][23]. - The new track business maintained good growth momentum, with home decoration and furniture business revenue increasing by 54% year-on-year and 68% quarter-on-quarter [1][27]. Financial Forecasts - The company expects adjusted net profits of 90 billion yuan and 92 billion yuan for 2024 and 2025 respectively, with corresponding PE ratios of 14.1 and 13.8 times [1][38]. - The revenue forecast for 2024 is set at 88.239 billion yuan, reflecting a growth of 13.5% compared to 2023 [2][39].

Core Viewpoint - KE Holdings (Beike) has demonstrated resilience in its business model despite the ongoing slump in China's real estate market, maintaining a "buy" rating due to significant upside potential at current valuations [2][9]. Group 1: Q2 2024 Financial Results - Gross transaction value (GTV) increased by 7.5% year-over-year [3]. - Net revenues rose by 19.9% year-over-year [3]. - Adjusted operating margin improved to 12.0% in Q2 2024 from 11.0% in Q2 2023 [3]. - Adjusted net income increased by 13.1% year-over-year [3]. Group 2: Revenue Breakdown - Net revenues from home renovation and furnishing surged by 53.9% to RMB4.0 billion ($0.6 billion), contributing 17.2% to total revenue, up from 13.3% in Q2 2023 [4]. - Net revenues from home rental services skyrocketed by 167.1% to RMB3.2 billion ($0.4 billion), representing 13.7% of net revenue, compared to 6.2% in Q2 2023 [4]. - Existing home transaction services saw a 14.3% increase in net revenues, driven by a 25% growth in GTV [5]. - New home transaction services experienced an 8.8% decline in net revenues due to a 20% drop in GTV, although this decline was less severe than the overall market's 21.5% decrease [5]. Group 3: Market Share and Competitive Advantage - BEKE's outperformance in the market is attributed to four key factors: special incentives for agents, expanded coverage of core state-owned developers, technology tools for identifying potential buyers, and an increase in the number of agents on its platform [5]. - The year-over-year sales decline in Q2 narrowed month-by-month, indicating a potential stabilization in the real estate market [5]. Group 4: Financial Health and Share Repurchase - BEKE generated RMB4.8 billion ($0.66 billion) in operating cash flow and held RMB59.7 billion ($8.2 billion) in cash and equivalents [6]. - The company announced an increase in its share repurchase program from $2 billion to $3 billion, reflecting confidence in its financial position [6]. Group 5: Financial Projections and Valuation - Projections indicate a continued decline in new home sales over the next two years, while existing home sales are expected to rebound [7]. - BEKE's margins have been revised upward based on better-than-expected Q2 results [7]. - A valuation of 14 times P/E multiple is applied, representing a 60% discount to the sector median P/E multiple due to perceived risks [7]. Group 6: Conclusion - BEKE has increased its market share during a challenging period, with signs of stabilization in new home sales and growth in existing home sales [9]. - The company's new business initiatives are showing strong growth momentum, suggesting more than 50% upside potential from current prices [9].

业绩简评 2024 年 8 月 12 日，公司发布 2024 年二季度及中期业绩：24Q2 实 现营收 233.7 亿元，同比+19.9%；经调整净利润 26.9 亿元，同比 +13.9%。24H1 实现营收 397.5 亿元，同比-0.04%；经调整净利润 40.9 亿元，同比-31.1%。 经营分析 今年二季度业绩大幅改善。24Q2 公司营收同比+19.9%，环比 +42.7%，主要受益于存量房、家装家居、房屋租赁业务均取得增 长。同时毛利同比提升 22%至 65 亿元，毛利率同比提升 0.5pct 至 27.9%，主要由于：①家装家居及房屋租赁的运营效率提升，贡 献利润率提高；②门店成本占比降低。 二季度新房业务跑赢大市，存量房业务交易复苏。24Q2 公司新房 GTV 为 2353 亿元，同比-20.2%，降幅小于同期百强房企-35%的全 口径销售额；存量房 GTV 为 5707 亿元，同比+25.0%。公司新房业 务收入 79 亿元，同比-8.8%，新房收入降幅明显小于 GTV 降幅， 主因货币化率提升；存量房业务收入 73 亿元，同比+14.3%。 家装家居及房屋租赁业务快速成长。24Q2 公司房屋 ...

Exhibit 99.3 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. KE Holdings Inc. 貝殼控股有限公司 (A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited ...

Target Price Change 13 August 2024 BUY 75% side Target price: US$24.62 Prior TP: US$22.03 BEKE US Price: US$14.03 TP basis: EV/EBITDA Sector rating: - Forecast Revisions (%) Year ended 31 Dec 24E 25E 26E Revenue 6.8 8.5 9.4 Adjusted EPS 10.7 11.5 12.1 Source: BOCI Research estimates Trading Summary US$ Turnover (US$ m) 14/08/23 14/09/23 14/10/23 14/11/23 14/12/2314/01/2414/02/2414/03/2414/04/2414/05/2414/06/2414/07/24 12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0 20.0 21.0 0 100 200 300 400 500 600 700 800 900 Tu ...