Core Insights - Beike (2423.HK) saw a 3.97% increase in stock price, reaching HKD 43.98 during trading [1] - For Q3 2025, Beike reported revenue of CNY 23.1 billion, a year-on-year increase of 2.1% [1] - The company's NON-GAAP net profit was CNY 1.29 billion, while the total transaction value (GTV) remained stable at CNY 736.7 billion compared to the same period last year [1] Financial Performance - Beike's Q3 performance exceeded expectations, indicating the company is on the right track [1] - The net profit margin is projected to improve to 7% next year, driven by a nearly CNY 2 billion reduction in agent and store costs year-on-year [1] - Non-transaction service business has shown continuous profitability for two consecutive quarters, with expected contributions of CNY 800 million and CNY 1.3 billion in profits over the next two years [1] Market Outlook - Citigroup raised Beike's H-share target price from HKD 61.4 to HKD 63, maintaining a "Buy" rating [1] - The company's growth is supported by advancements in artificial intelligence, innovation, and ecosystem development [1]

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The brokerage business remains robust, and the profitability of emerging businesses is improving. The company has a strong platform barrier and is enhancing its brokerage framework while securing housing resources [7] - The company faces significant GTV pressure in Q4 2025 due to a noticeable decline in transaction activity in both the primary and secondary markets, which may impact brokerage revenue [7] - The company has adjusted its revenue forecasts downward for 2025-2027, with net profit estimates revised to 3.6 billion, 5.4 billion, and 6.4 billion yuan respectively [7] Financial Data and Earnings Forecast - Revenue projections for 2023 to 2027 are as follows: - 2023: 77.777 billion yuan - 2024: 93.457 billion yuan - 2025E: 94.606 billion yuan - 2026E: 94.464 billion yuan - 2027E: 100.799 billion yuan - Net profit attributable to ordinary shareholders is forecasted as: - 2023: 5.883 billion yuan - 2024: 4.065 billion yuan - 2025E: 3.585 billion yuan - 2026E: 5.361 billion yuan - 2027E: 6.371 billion yuan - The company’s earnings per share (EPS) is projected to be: - 2023: 1.63 yuan - 2024: 1.15 yuan - 2025E: 1.04 yuan - 2026E: 1.55 yuan - 2027E: 1.84 yuan [6][8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Insights - The company reported total revenue of 231 billion yuan for Q3 2025, a year-on-year increase of 2.1%, while adjusted net profit was 12.86 billion yuan, down 12.8% year-on-year [7] - The total transaction volume remained stable at 736.7 billion yuan, but the decline in profit margins led to a decrease in net profit, with gross margin dropping to 21.4% from 22.7% in the same period last year [7] - The home decoration and rental services segments achieved profitability at the city level for two consecutive quarters, with home decoration revenue of 4.3 billion yuan and a profit margin of 32.0%, up 0.8 percentage points year-on-year [7] - The company has increased shareholder returns, spending approximately 280 million USD on share buybacks in Q3, a 38.3% increase year-on-year, marking a two-year high [7] - The company is actively expanding its diversified businesses, including home decoration and rental services, despite facing short-term performance pressure due to a sluggish real estate market [7] Financial Performance Summary - Revenue projections for the company are as follows: 77.777 billion yuan in 2023, 93.457 billion yuan in 2024, 97.986 billion yuan in 2025, 106.438 billion yuan in 2026, and 110.849 billion yuan in 2027, with a revenue growth rate of 28.20% in 2023 and declining to 4.14% by 2027 [6] - Adjusted net profit is forecasted to be 9.798 billion yuan in 2023, decreasing to 5.790 billion yuan in 2025, before recovering to 8.308 billion yuan in 2027 [6] - The company's price-to-earnings (PE) ratio is projected to be 14.08 in 2023, increasing to 23.82 in 2025, and then decreasing to 16.60 by 2027 [6]

Investment Rating - The report maintains a "Buy" recommendation for new homes and indicates a significant decline in second-hand home transactions year-on-year [2][33]. Core Insights - The real estate sector has seen a 0.2% decline in the week of November 3 to November 7, 2025, ranking 24th among 31 primary industry sectors [9][30]. - New home transaction volume in 20 monitored cities decreased by 38% year-on-year, with a total area of 159 million square meters sold in the week, averaging 22.7 million square meters per day [21][24]. - Second-hand home transactions in 11 monitored cities also fell by 29% year-on-year, with a total area of 186 million square meters sold in the week, averaging 26.6 million square meters per day [24][29]. Industry Overview - **Basic Data**: The real estate sector comprises 107 listed companies with a total market capitalization of 1,233.623 billion yuan and a circulating market capitalization of 1,183.334 billion yuan [3]. - **Relative Index Performance**: The absolute performance over 1 month, 6 months, and 12 months is -1.6%, 16.8%, and -8.9% respectively, while the relative performance is -3.3%, -5.3%, and -23.3% [4]. Policy Developments - Local policies include the implementation of "current housing sales" in Pingjiang County, Hunan, and the promotion of industrialized construction in Guangzhou, aiming for a total output value of 500 billion yuan by 2030 [14][15]. Sales Performance - The report highlights a significant drop in both new and second-hand home sales, with new home sales down 31% week-on-week and second-hand home sales down 6% week-on-week [21][24]. - Cumulative data shows that new home sales in 20 cities have decreased by 11% year-to-date, while second-hand home sales in 11 cities have increased by 7% year-to-date [21][24]. Financing Trends - Most bond issuances in the week were by local state-owned enterprises, with Guang'an Holdings issuing the largest scale of 2 billion yuan [30][31]. Investment Strategy - The report suggests focusing on companies with strong product differentiation and stable rental income from quality commercial real estate, highlighting firms such as Beike-W, Greentown China, and China Resources Land as potential investment opportunities [33].

Core Viewpoint - Citigroup's report indicates that Beike's Q3 performance exceeded expectations, suggesting the company is on the right track with projected net profit margin improvement to 7% next year driven by various factors [1] Financial Performance - Beike's Q3 performance surpassed expectations, with a significant reduction in agent and store costs by nearly 2 billion yuan year-on-year [1] - The non-transaction service business has shown continuous profitability for two consecutive quarters, expected to contribute 800 million yuan and 1.3 billion yuan in profits over the next two years [1] - The company is projected to achieve a 14% year-on-year increase in profits to 6.5 billion yuan next year [1] Strategic Drivers - Key drivers for profit growth next year include margin and cost control [1] - The company is leveraging artificial intelligence, innovation, and ecosystem development as part of its growth strategy [1] Target Price Adjustment - Citigroup has raised its target price for Beike, increasing the ADR target price from $22.1 to $22.6 and the H-share target price from HKD 61.4 to HKD 63, maintaining a "Buy" rating [1]

Core Insights - Beike Holdings reported its Q3 2025 financial results, showing a total transaction value (GTV) of 736.7 billion RMB, with total revenue of 23.1 billion RMB, a year-on-year increase of 2.1% [1] - Net profit decreased by 36.1% to 747 million RMB, while adjusted net profit fell by 27.8% to 1.286 billion RMB [1] - The number of active stores reached 59,012, up 25.9% year-on-year, and the number of active agents increased by 11.4% to 471,501 [1] Business Segments Existing Home Business - The GTV for the existing home business reached 505.6 billion RMB, reflecting a year-on-year increase of 5.8% [1] - The implementation of the "tenant separation" mechanism in Shanghai improved agents' property maintenance and marketing capabilities, increasing the property turnover rate from 2.6% to over 3% [1] New Home Business - The GTV for new home business grew approximately 11% year-on-year, with Q3 GTV reaching 196.3 billion RMB [1] - A new light operation model product "B+" is being piloted in four cities, with plans to expand to over 30 cities by the end of 2025 [1] Rental Services - The number of managed rental properties exceeded 660,000, generating revenue of 5.73 billion RMB, a year-on-year increase of 45.3% [2] - The profit margin for rental services reached 8.7%, up 4.3 percentage points year-on-year, with profitability achieved at the city level for two consecutive quarters [2] Home Decoration and Furnishing - The net income from the home decoration and furnishing business was 4.3 billion RMB, with a profit margin of 32%, an increase of 0.8 percentage points year-on-year [2] - The business achieved profitability at the city level for two consecutive quarters [2] Research and Development - Beike increased its R&D investment, totaling 1.865 billion RMB, with Q3 R&D expenses at 648 million RMB, a year-on-year increase of 13.2% [2] - AI technology has been further integrated into core business processes, driving efficiency improvements [2]

Core Viewpoint - Beike-W (02423.HK) shares rose over 3% following its earnings report, indicating positive market sentiment towards the company's performance [1] Group 1 - The stock price increased by 3.07%, reaching HKD 43.6 [1] - The trading volume was HKD 146 million at the time of reporting [1]

Core Viewpoint - Beike-W (02423) experienced a stock price increase of over 3% following the release of its Q3 2025 earnings report, with a current price of HKD 43.6 and a trading volume of HKD 146 million [1] Financial Performance Summary - Total transaction volume for Q3 2025 was RMB 736.7 billion, showing a year-on-year stability [1] - The total transaction volume for existing homes was RMB 505.6 billion, reflecting a year-on-year increase of 5.8% [1] - The total transaction volume for new homes was RMB 196.3 billion, indicating a year-on-year decrease of 13.7% [1] - Net revenue reached RMB 23.1 billion, marking a year-on-year increase of 2.1% [1] - Net profit was RMB 747 million, representing a year-on-year decrease of 36.1% [1] - Adjusted net profit stood at RMB 1.286 billion, down 27.8% year-on-year [1] Business Segment Analysis - Revenue changes by business segment included: existing homes (-4%), new homes (-14%), home decoration (+2%), and rental services (+45%) [1] - Gross margin decreased by 1.3 percentage points to 21.4%, primarily due to a decline in the contribution margin from brokerage income [1] - Adjusted net profit of RMB 1.3 billion exceeded expectations by 5%, attributed to a reduction in home decoration sales expenses [1] Future Outlook - Expectations for Q4 indicate a projected year-on-year revenue decline of 27%, influenced by a high base from the previous year following policy changes [1] - Profitability in 2026 is anticipated to improve significantly, driven by enhanced efficiency in brokerage operations, better margins in home decoration, and increased rental profits due to expanded listings and AI efficiency [1] - The company maintains a "Buy" rating based on these projections [1]

Summary of Key Points from the Conference Call Company Overview - **Company**: Beike - **Industry**: Real Estate Services Financial Performance - **Q3 2025 Revenue**: Decreased by 3.6% year-on-year to 6 billion RMB [2][3] - **Non-GAAP Net Income**: Decreased by 27.8% year-on-year to 1.29 billion RMB [2][3] - **Gross Profit**: Decreased by 3.9% year-on-year to 4.9 billion RMB, with a gross margin of 21.4%, down 1.3 percentage points [2][3] - **Total Operating Expenses**: 4.3 billion RMB, down 1.8% year-on-year [3] Business Segments Real Estate Transaction Services - **GTV (Gross Transaction Value)**: Increased by 5.8% year-on-year to 50.56 billion RMB, but decreased by 13.3% quarter-on-quarter [2][5] - **AI Contribution**: AI systems identified quality business opportunities contributing over 50% of transaction volume [2][5] - **Revenue**: 6 billion RMB, down 3.6% year-on-year [5] Home Decoration and Furniture - **Revenue**: Approximately 4.3 billion RMB, stable year-on-year [2][6] - **Gross Margin**: Increased by 0.8 percentage points to 32% due to expanded centralized procurement and improved dispatch efficiency [2][6] Family Rental Services - **Revenue**: Reached a record high of 5.7 billion RMB, up 45.3% year-on-year [2][7] - **Managed Units**: Over 660,000 units, a 75% increase year-on-year [2][7] - **Gross Margin**: 8.7%, up 4.3 percentage points year-on-year [2][7] Shareholder Returns - **Stock Buyback**: Totaled approximately 675 million USD in Q3, a 15.7% increase year-on-year, with a cumulative buyback of about 2.3 billion USD [2][8] Cost Control and Efficiency Improvements - **Labor Cost Reduction**: Fixed labor costs decreased by over 20% due to organizational optimization [21] - **Material Cost Reduction**: Centralized procurement expanded from 4 to 13 categories, with some product prices dropping by over 20% [21] - **AI Implementation**: AI-driven systems led to a 10% reduction in staff while increasing new lease signings by 10% [4][11] Challenges and Future Opportunities - **Market Challenges**: New family transaction business affected by market fluctuations, but long-term growth is expected [14] - **Expansion Plans**: B+ business pilot in 4 cities, with plans to expand to over 30 cities by year-end [16] Technology and Innovation - **AI Utilization**: AI systems integrated into property management, lead identification, and pricing strategies, resulting in significant cost savings [11][12][13] - **Operational Efficiency**: AI-driven decision-making improved operational efficiency and reduced costs across various business segments [11][12] Conclusion - **Overall Performance**: Beike's Q3 2025 results reflect a mixed performance across its business segments, with significant growth in family rental services but challenges in real estate transaction services. The company is leveraging technology and cost control measures to enhance efficiency and shareholder returns while preparing for future growth opportunities in emerging markets.

Core Insights - KE Holdings Inc. reported third-quarter adjusted earnings that slightly exceeded analyst forecasts, with shares increasing over 2% in intra-day trading [1] - The company achieved adjusted earnings per share of RMB1.17 ($0.16), surpassing expectations of RMB1.16 [1] - Revenue increased by 2.1% year over year to RMB23.1 billion ($3.2 billion), although it fell short of the RMB23.58 billion consensus [1] Segment Performance - Existing home transaction gross transaction value (GTV) grew by 5.8% to RMB505.6 billion [2] - New home GTV declined by 13.7% to RMB196.3 billion [2] - Rental services revenue surged by 45.3% to RMB5.7 billion, indicating strong performance in this segment [2] Financial Metrics - Net income decreased by 36.1% to RMB747 million ($105 million) [2] - Adjusted net income fell by 27.8% to RMB1.29 billion ($181 million) [2] Operational Expansion - The number of active stores increased by 25.9% year over year to 59,012 [3] - Active agents rose by 11.4% to 471,501 [3] - Monthly active mobile users averaged 49.3 million, up from 46.2 million in the prior-year period [3]