Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a revenue of 23.3 billion yuan in Q1 2025, representing a year-on-year growth of 42.4%, with adjusted net profit of 1.4 billion yuan, slightly exceeding expectations [8] - The company's GTV (Gross Transaction Value) reached 843.7 billion yuan, up 34.0% year-on-year, indicating stable revenue growth [8] - The report highlights a decline in gross margin by 4.5 percentage points to 20.7%, primarily due to a decrease in the proportion of high-margin existing home business revenue and an increase in fixed salary costs [8] - The number of active stores and agents has expanded significantly, with active stores increasing by 29.6% year-on-year to 55,000 and active agents growing by 23.0% to 490,000 [8] - The new home business saw a transaction value of 232.2 billion yuan, a substantial increase of 53.0% year-on-year, with commission rates improving by 0.2 percentage points to 3.5% [8] - The home decoration business is steadily growing, with profit margins increasing by 2.0 percentage points to 32.6% [8] - The report projects adjusted net profits for 2025-2027 at 9.7 billion, 11.6 billion, and 13.6 billion yuan respectively, with corresponding EPS of 1.83, 2.36, and 2.91 yuan, and adjusted PE ratios of 16.3X, 14.4X, and 12.3X [8] Financial Summary - Total revenue forecast for 2023A, 2024A, 2025E, 2026E, and 2027E is 77.8 billion, 93.5 billion, 109.6 billion, 127.5 billion, and 147.4 billion yuan respectively, with year-on-year growth rates of 28.20%, 20.16%, 17.30%, 16.30%, and 15.60% [1] - The company's net profit for 2023A, 2024A, 2025E, 2026E, and 2027E is projected at 5.9 billion, 4.1 billion, 6.6 billion, 8.5 billion, and 10.5 billion yuan, with year-on-year growth rates of 524.45%, -30.91%, 62.10%, 28.96%, and 23.48% [1] - Non-GAAP net profit estimates for the same periods are 9.8 billion, 7.2 billion, 9.7 billion, 11.6 billion, and 13.6 billion yuan, with year-on-year growth rates of 244.70%, -26.41%, 34.53%, 19.73%, and 17.23% [1]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $27.02 [6][22]. Core Insights - The company reported a significant revenue increase of 42% year-on-year to RMB 23.3 billion in Q1, exceeding consensus expectations by 4% [1][11]. - The growth in revenue was driven by substantial increases in the new home and rental segments, with new home revenue growing by 64% year-on-year [1][2]. - The company is expected to achieve breakeven in its home renovation business in Q2, supported by improved operational efficiency and AI tools [2][12]. Revenue and Profitability - The revenue breakdown shows that existing home, new home, home renovation, and rental revenues grew by 20%, 64%, 22%, and 64% year-on-year, respectively [1][2]. - The adjusted net profit for Q1 was RMB 1.4 billion, a slight increase of 0.1% year-on-year, despite a decline in gross margin to 20.7% [1][4]. - The company anticipates continued improvement in net profit margins as agent efficiency and cost ratios optimize [1][3]. Business Segments Performance - The existing home segment's gross transaction value (GTV) increased by 28% year-on-year, outperforming the national average growth of 16% [2][11]. - The new home segment's GTV grew by 53% year-on-year, significantly higher than the national new home sales, which remained flat [2][11]. - The home renovation segment is expected to achieve profitability in Q2, with a notable increase in order volume and efficiency [12][14]. AI and Operational Efficiency - The implementation of AI tools has led to significant improvements in agent productivity, with transaction rates increasing by over 30% [3][13]. - AI capabilities are being integrated across various business functions, enhancing operational efficiency and customer satisfaction [13][14]. - The company is focusing on leveraging AI to streamline processes in home renovation and real estate transactions, which is expected to drive future growth [14][16]. Financial Forecasts - Revenue forecasts for 2025-2027 have been adjusted upwards by 4.5%, 4%, and 0.6%, respectively, reflecting anticipated efficiency improvements and market growth [4][18]. - The adjusted net profit estimates for 2025, 2026, and 2027 are projected at RMB 82 billion, RMB 99 billion, and RMB 119 billion, respectively [4][18]. - The target price of $27.02 corresponds to a 27x PE ratio for 2025, indicating a premium valuation compared to peers [22][23].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a stable revenue growth with adjusted profits slightly exceeding expectations for Q1 2025, achieving a revenue of 23.3 billion yuan, a year-on-year increase of 42.4% [8] - The company's GTV (Gross Transaction Value) reached 843.7 billion yuan, up 34.0% year-on-year, driven by growth in various business segments [8] - The report highlights the expansion of the second-hand housing market and the increase in active stores and agents, with a 28.1% year-on-year growth in total transaction value for second-hand housing [8] - The new housing business also saw significant growth, with transaction value increasing by 53.0% year-on-year, and a slight improvement in commission rates [8] - The home decoration business is steadily developing, with profit margins improving [8] - Future performance is expected to benefit from the increasing turnover rate in the second-hand housing market and the growth of the home decoration business, with projected adjusted net profits for 2025-2027 being 9.7 billion, 11.6 billion, and 13.6 billion yuan respectively [8] Financial Summary - The company’s total revenue is projected to grow from 77.8 billion yuan in 2023 to 147.4 billion yuan in 2027, with a compound annual growth rate (CAGR) of approximately 15.6% [1] - The adjusted net profit is expected to increase significantly from 5.9 billion yuan in 2023 to 10.5 billion yuan in 2027, reflecting a strong growth trajectory [1] - The report provides earnings per share (EPS) estimates of 1.63 yuan for 2023, increasing to 2.91 yuan by 2027 [1]

Core Viewpoint - Beike (BEKE.US) reported strong Q1 2025 financial results, exceeding market expectations, with significant growth in both existing and new home transactions, as well as rapid expansion in non-property services [1][2]. Financial Performance - In Q1 2025, Beike achieved a total transaction volume of 843.7 billion RMB, a year-on-year increase of 34%, and total revenue of 23.3 billion RMB, up 42.4% year-on-year [1]. - The existing home business generated a transaction volume of 580.3 billion RMB, a 28.1% increase year-on-year, with net income of 6.9 billion RMB, up 20.0% [2]. - The new home business saw a transaction volume of 232.2 billion RMB, a 53.0% increase year-on-year, with net income of 8.1 billion RMB, up 64.2% [2]. - Non-property services reported a net income growth of 46.2% year-on-year, accounting for 35.9% of total net income, with rental services net income reaching 5.1 billion RMB, a 93.8% increase [3]. Profitability - Beike's net profit for Q1 2025 was 0.855 billion RMB, a 97.9% increase year-on-year, while adjusted net profit was 1.393 billion RMB, remaining stable year-on-year [3]. - The gross margin decreased from 25.2% in the previous year to 20.7%, attributed to a lower contribution from the higher-margin existing home business and increased fixed salary costs [3]. Market Context - The positive performance is linked to a series of policies aimed at stabilizing the real estate market, which have led to favorable conditions in both new and second-hand home markets [3]. - Beike's CEO expressed confidence in the company's long-term growth strategy and ongoing investments in AI applications [3]. Investor Reaction - Despite the strong performance, Beike's stock fell by 5.29% to $19.16 per share on May 15, 2025, with H-shares also showing a slight decline [4]. - This negative reaction may be related to conservative guidance for Q2 2025, with expected revenue of 26 billion RMB, which is 10% lower than UBS's forecast [5]. Future Outlook - Beike anticipates a conservative growth outlook for Q2 2025, with second-hand home transaction volume expected to remain flat year-on-year and new home transaction volume projected to grow by 10% [5]. - The company expects home decoration and rental income to grow by double digits and 70% year-on-year, respectively [5].

Group 1 - HHLR Advisors reported a total market value increase from $2.887 billion to $3.539 billion, a nearly 23% rise in Q1 2025 [1] - HHLR's top ten holdings include Pinduoduo, Alibaba, Futu Holdings, BeiGene, NetEase, Beike, Legend Biotech, JD.com, Vipshop, and WNS Holdings, with 9 out of 10 being Chinese concept stocks [1][2] - HHLR made new investments in 10 companies including Atour Group, Huazhu Group, Baidu, and Li Auto, with significant increases in holdings for Yum China, Li Auto, and Baidu [2] Group 2 - Jinglin Asset Management's Hong Kong subsidiary reported a total market value of $3.228 billion, showing an increase from the previous year [3] - Jinglin's new investments include Alibaba and Hesai Technology, while it increased holdings in Meta, Beike, TSMC, and New Oriental, and reduced positions in Google, Microsoft, and Nvidia [3] - The market value increase for both HHLR and Jinglin is attributed to the revaluation of Chinese concept stocks, with the Nasdaq Golden Dragon China Index rising by 13.33% in Q1 2025 [4] Group 3 - The rapid development of AI models like DeepSeek is reshaping the valuation of Chinese tech companies, moving away from traditional pricing models that undervalued growth potential [5] - The shift in valuation logic is driven by the transition of Chinese AI companies from relying on foreign platforms to establishing their own technological capabilities [5]

Core Viewpoint - The article discusses the recent quarterly holdings of major investment firms, highlighting significant investments in Chinese stocks and the impact of the revaluation of Chinese tech stocks on their portfolios [2][8]. Group 1: HHLR Advisors Holdings - HHLR Advisors reported a total holding value increase from $2.887 billion to $3.539 billion, a nearly 23% rise in Q1 2025 [2]. - The top ten holdings of HHLR include Pinduoduo, Alibaba, Futu Holdings, BeiGene, NetEase, Beike, Legend Biotech, JD.com, Vipshop, and WNS Holdings, with nine of these being Chinese stocks [2]. - HHLR made new investments in ten companies, including Atour Group, Huazhu Group, Baidu, Yuchai International, and Li Auto, with significant increases in holdings for Yum China, Li Auto, and Baidu [4]. Group 2: Performance of New Investments - New investments by HHLR in Yuchai International saw an 80% increase, while BOSS Zhipin and Li Auto rose by 34% and 20%, respectively, as of May 14 [4]. - HHLR increased its holdings in eight companies, including Futu Holdings and Pinduoduo, with Futu Holdings experiencing a 40% rise and Pinduoduo a 23% rise [4]. - HHLR reduced its positions in Alibaba and BeiGene, with Alibaba's stock rising by 56% and BeiGene by 47% during the same period [4]. Group 3: Jinglin Asset Management Holdings - Jinglin Asset Management reported a total holding value of $3.228 billion as of Q1 2025, showing an increase from the previous year [6]. - New investments included Alibaba and Hesai Technology, while they increased holdings in Meta, Beike, TSMC, and New Oriental, and reduced positions in Google, Microsoft, and others [6]. - The top ten holdings of Jinglin include Meta, Pinduoduo, NetEase, and others, with a total holding value of $2.784 billion, representing 86.24% of their total U.S. stock holdings [6]. Group 4: Market Trends and Revaluation - The increase in holdings for HHLR and Jinglin is attributed to the revaluation of Chinese tech stocks, with the Nasdaq Golden Dragon China Index rising by 13.33% in Q1 2025 [8]. - The rapid development of AI models like DeepSeek is reshaping market perceptions of Chinese tech companies, moving away from traditional valuation methods [8]. - The shift in valuation logic is driven by the emergence of independent technological capabilities in Chinese AI firms, leading to a reassessment of their long-term growth potential [9].

Major Events - Heng Rui Medicine (01276) plans to globally issue 224.5 million H-shares, expected to be listed on May 23 [1] - MIRXES-B (02629) will conduct an IPO from May 15 to May 20, aiming to globally issue 46.62 million shares [1] - Green Tea Group (06831) received 317.54 times subscription for its public offering in Hong Kong, with a final issue price of HKD 7.19 per share [1] - CSPC Pharmaceutical Group (01093) signed an exclusive licensing agreement with Cipla for the commercialization of Irinotecan Liposome Injection in the United States [1] - CanSino Biologics (06185) received clinical trial approval for its inhaled tuberculosis booster vaccine in Indonesia [1] - Fuhong Hanlin (02696) has been included in the MSCI Global Small Cap Index [1] - Financial One Account (06638) received a privatization offer from Ping An Group (02318) at a premium of approximately 23.10% [1] Financial Reports - Alibaba-W (09988) reported revenue and net profit growth for the fiscal year 2025, with net profit attributable to shareholders increasing by 62% to CNY 129.47 billion [1] - NetEase-S (09999) announced Q1 results with net profit attributable to shareholders at CNY 10.301 billion, a year-on-year increase of 34.94%, and a quarterly dividend of USD 0.135 per share [1] - Geely Automobile (00175) released Q1 results showing a significant increase in profit attributable to shareholders of CNY 5.672 billion, up 263.59% year-on-year [1] - Beike-W (02423) reported a total transaction volume growth of 34.0% year-on-year in Q1, with net revenue increasing by 42.4% [1] - Minhua Holdings (01999) announced annual results with profit attributable to shareholders of HKD 2.063 billion, a decrease of 10.41% year-on-year [1] - Shoucheng Holdings (00697) reported Q1 results with profit attributable to shareholders of HKD 213 million, an increase of 80.5% year-on-year [1] - Fourth Paradigm (06682) showed strong performance in core business with total revenue of CNY 1.077 billion in Q1, a year-on-year growth of 30.1% [1]

Financial Performance - Gross transaction value (GTV) increased by 34.0% year-over-year to RMB843.7 billion (US$116.3 billion) in Q1 2025, with existing home transactions growing by 28.1% to RMB580.3 billion (US$80.0 billion) and new home transactions rising by 53.0% to RMB232.2 billion (US$32.0 billion) [8]. - Net revenues reached RMB23.3 billion (US$3.2 billion), marking a 42.4% increase year-over-year, driven by growth in both existing and new home transaction services [12]. - Net income for Q1 2025 was RMB855 million (US$118 million), a significant increase of 97.9% year-over-year, while adjusted net income remained relatively flat at RMB1,393 million (US$192 million) [8]. - Total net revenues for the three months ended March 31, 2025, increased to RMB 23,328,347, representing a 42.5% growth compared to RMB 16,377,314 for the same period in 2024 [56]. - Net income attributable to KE Holdings Inc. for the three months ended March 31, 2025, was RMB 855,767, up from RMB 431,774 in the same period of 2024, reflecting a 98.1% increase [57]. Revenue Breakdown - Net revenues from existing home transaction services were RMB6.9 billion (US$0.9 billion), up 20.0% year-over-year, while new home transaction services saw revenues of RMB8.1 billion (US$1.1 billion), a 64.2% increase [12]. - The company reported a significant increase in new home transaction services revenue, which rose to RMB 8,074,995 for the three months ended March 31, 2025, up from RMB 4,916,515 in the same period of 2024, marking a 64.4% increase [56]. - Net revenues from existing home transaction services reached RMB 6,870,407, up from RMB 5,727,030, representing a growth of approximately 20% [64]. - New home transaction services generated net revenues of RMB 8,074,995, a substantial increase from RMB 4,916,515, marking a growth of about 64% [64]. - The contribution from home renovation and furnishing services increased to RMB 959,487, compared to RMB 737,130, reflecting a growth of approximately 30% [64]. Operational Metrics - The number of active stores increased by 29.6% year-over-year to 55,210, and the number of active agents rose by 23.0% to 490,862 as of March 31, 2025 [8]. - Mobile monthly active users (MAU) averaged 44.5 million in Q1 2025, a decrease from 47.7 million in the same period of 2024 [9]. - Income from operations was RMB591 million (US$81 million) in Q1 2025, a significant increase from RMB12 million in Q1 2024, resulting in an operating margin of 2.5% compared to 0.1% in the same period last year [24]. - Adjusted income from operations was RMB1,148 million (US$158 million) in Q1 2025, up from RMB960 million in Q1 2024, with an adjusted operating margin of 4.9% compared to 5.9% in the same period last year [25]. Expenses and Costs - Total cost of revenues increased by 51.0% to RMB18.5 billion (US$2.6 billion) in Q1 2025, primarily due to higher costs associated with increased transaction volumes [17]. - General and administrative expenses decreased to RMB1.9 billion (US$0.3 billion) in Q1 2025 from RMB2.0 billion in Q1 2024, primarily due to reduced share-based compensation expenses [29]. - Research and development expenses rose by 24.9% to RMB584 million (US$80 million) in Q1 2025 from RMB467 million in Q1 2024, driven by increased headcount and technical service costs [29]. Shareholder Returns - The company allocated approximately US$139 million to share repurchases in Q1 2025, representing about 0.6% of total issued shares at the end of 2024 [13]. - The company has repurchased approximately 116.6 million ADSs (representing about 349.9 million Class A ordinary shares) for a total consideration of approximately US$1,764.8 million under its share repurchase program since its launch [37]. - The company plans to continue its share repurchase program until August 31, 2025, subject to obtaining a new mandate from shareholders [37]. Cash and Assets - As of March 31, 2025, the combined balance of cash, cash equivalents, restricted cash, and short-term investments was RMB54.8 billion (US$7.6 billion) [34]. - Cash and cash equivalents as of March 31, 2025, were RMB 12,772,700, an increase from RMB 11,442,965 as of December 31, 2024 [53]. - Total assets decreased slightly to RMB 130,612,461 as of March 31, 2025, from RMB 133,149,283 as of December 31, 2024 [55]. - Total current liabilities remained stable at RMB 52,761,664 as of March 31, 2025, compared to RMB 52,744,258 as of December 31, 2024 [54]. - Total shareholders' equity decreased to RMB 68,951,339 as of March 31, 2025, from RMB 71,447,995 as of December 31, 2024 [55]. Earnings Per Share - Basic and diluted net income per ADS attributable to ordinary shareholders was RMB0.76 (US$0.10) and RMB0.73 (US$0.10) in Q1 2025, compared to RMB0.38 and RMB0.37 in Q1 2024, respectively [32]. - Adjusted net income attributable to ordinary shareholders was RMB1,393 million (US$192 million) in Q1 2025, relatively flat compared to RMB1,392 million in Q1 2024 [30]. - The weighted average number of ordinary shares used in computing net income per share, basic, was 3,362,716,016 for the three months ended March 31, 2025 [58]. - The weighted average number of ADS used in computing net income per ADS, diluted, was 1,174,000,690 for the three months ended March 31, 2025 [60]. Cash Flow - The company experienced a net cash used in operating activities of RMB 3,965,271, an increase from RMB 2,108,532 in the prior year, indicating higher operational expenditures [62]. - The company’s cash, cash equivalents, and restricted cash at the end of the period were RMB 22,918,385, down from RMB 24,783,312 at the beginning of the period [62]. - Adjusted EBITDA for the three months ended March 31, 2025, was RMB 1,841,720, an increase from RMB 1,665,669 in the previous year [59].

Financial Data and Key Metrics Changes - In Q1 2025, the company's total transaction value (TTV) was RMB 844.2 billion, representing a year-over-year increase of 34% [29] - Net revenue reached RMB 23.3 billion, up 42.4% year-over-year [29] - GAAP net income was RMB 855 million, increasing 97.9% year-over-year [41] - Gross margin declined by 4.5 percentage points year-over-year to 28.7% [29] Business Line Data and Key Metrics Changes - Revenue from existing home transactions reached RMB 6.9 billion, up 20% year-over-year [30] - GTV for new home transactions increased by 53% year-over-year, outperforming the market [32] - Revenue from home renovation and furniture business grew by 22.3% year-over-year, with a contribution margin of 32.6% [34][72] - Home rental services revenue reached RMB 5.1 billion, up 93.8% year-over-year [35] Market Data and Key Metrics Changes - The national GTV for in-home transactions grew by approximately 16% year-over-year in Q1 [28] - New home sales remained relatively flat year-over-year, down 0.4% [49] - The existing home market saw a 28% increase in transaction clients year-over-year [28] Company Strategy and Development Direction - The company is focused on driving both scale and efficiency as part of its growth strategy [13] - Emphasis on optimizing collaboration with developers and improving agent efficiency in the new home transaction business [14] - The introduction of AI tools aims to enhance service quality and operational efficiency [18][20] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism regarding the property market, influenced by government policies and macroeconomic factors [25][52] - The company is closely monitoring the impact of international trade frictions on housing transactions [56] - Future market outlook will depend on domestic supportive measures and international trade dynamics [56] Other Important Information - The company has implemented a fund custody system in its home renovation business to enhance customer control and trust [24] - AI deployment is being tested in various segments, including housing transactions and home renovation, to improve service delivery [18][22] Q&A Session Summary Question: Outlook for the property market going forward - Management noted a strong recovery in the property market post-Chinese New Year, with stable performance expected [47][48] Question: Expansion plan for housing agents and agency stores - Management confirmed a focus on healthy growth of the agent network and improving efficiency of existing and new agents [59][60] Question: Home renovation and furniture business performance and AI strategy - Management highlighted a 22.3% revenue growth in the home renovation segment and detailed AI applications to enhance service quality [72]

Financial Data and Key Metrics Changes - In Q1 2025, total TTV reached RMB 844.2 billion, a year-over-year increase of 34% [28] - Net revenue was RMB 23.3 billion, up 42.4% year-over-year [28] - GAAP net income increased by 97.9% year-over-year to RMB 855 million [40] - Gross margin declined by 4.5 percentage points year-over-year to 28.7% [28][37] Business Line Data and Key Metrics Changes - Revenue from existing home transactions reached RMB 6.9 billion, up 20% year-over-year [29] - GTV for new home transactions increased by 53% year-over-year to RMB 232.2 billion [31] - Revenue from home renovation and furniture business grew by 22.3% year-over-year to RMB 2.9 billion [33] - Home rental services revenue reached RMB 5.1 billion, up 93.8% year-over-year [34] Market Data and Key Metrics Changes - National GTV for in-home transactions grew by approximately 16% year-over-year [26] - GTV for new home transactions nationwide declined by 0.4% year-over-year [10] - The existing home market saw a 28% increase in transaction volume year-over-year [26] Company Strategy and Development Direction - The company is focusing on driving both scale and efficiency as priorities for growth [12] - Emphasis on optimizing collaboration with developers and improving agent efficiency in new home transactions [13] - Continued investment in AI technology to enhance service quality and operational efficiency [17][66] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the property market, influenced by government policies and macroeconomic factors [52] - The company anticipates a typical seasonal slowdown in Q2 but expects slight year-over-year growth in transaction volume [52] - Monitoring the impact of international trade frictions on housing transactions and overall market stability [56] Other Important Information - The company has implemented a fund custody system in home renovation, enhancing customer control over renovation funds [22] - AI tools are being deployed to improve service efficiency and customer experience across various business lines [17][71] Q&A Session Summary Question: Outlook for the property market going forward - Management noted a strong recovery in the property market post-Chinese New Year, with stable performance expected [47][48] Question: Expansion plan for housing agents and agency stores - The company plans to continue promoting healthy growth in its agent network, with a focus on efficiency and income stability [59][60] Question: Specifics on home renovation and furniture segment operations - The segment achieved 22.3% year-over-year growth, with a contribution margin of 32.6% [70]