Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Insights - The company's brokerage business revenue has shown impressive growth, and profit margins across various segments are steadily recovering [7] - The company has a strong market position in the brokerage sector, with significant increases in transaction volumes and active agents [7] - The company is expected to benefit from its diversified business model, including home decoration and rental services, which are projected to contribute to future growth [7] Financial Data and Profit Forecast - Revenue projections for the company are as follows: - 2023: 77,777 million - 2024: 93,457 million - 2025E: 110,740 million - 2026E: 122,649 million - 2027E: 135,786 million - Year-on-year growth rates for revenue are projected at: - 2023: 28% - 2024: 20% - 2025E: 18% - 2026E: 11% - 2027E: 11% [3][8] - Net profit attributable to the parent company is forecasted as follows: - 2023: 5,883 million - 2024: 4,065 million - 2025E: 6,201 million - 2026E: 7,544 million - 2027E: 9,121 million - Year-on-year growth rates for net profit are projected at: - 2023: -524% - 2024: -31% - 2025E: 53% - 2026E: 22% - 2027E: 21% [3][8] - Earnings per share (EPS) estimates are: - 2023: 1.63 - 2024: 1.15 - 2025E: 1.77 - 2026E: 2.15 - 2027E: 2.60 [3][8] Business Performance - In Q1 2025, the company reported a total transaction value (GTV) of 843.7 billion, a year-on-year increase of 34.0% [7] - The breakdown of Q1 2025 transaction values includes: - Existing home transactions: 580.3 billion (up 28.1%) - New home transactions: 232.2 billion (up 53.0%) [7] - The company achieved a net income of 23.33 billion in Q1 2025, reflecting a year-on-year increase of 42.4% [7] - The number of active stores and agents has increased significantly, with 55,210 active stores (up 29.6%) and 491,000 active agents (up 23.0%) as of Q1 2025 [7]

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 renovation segments, with new home revenue rising 64% and renovation revenue increasing 22% year-on-year [1][2]. - The company anticipates that the renovation business will achieve breakeven profitability in Q2, supported by improved operational efficiency and AI tools [2][12]. Financial Performance - In Q1, the gross profit margin decreased by 4.5 percentage points to 20.7%, primarily due to a rise in fixed salary costs [1][4]. - Adjusted net profit for Q1 was RMB 1.4 billion, reflecting a slight year-on-year increase of 0.1% [1][4]. - The company expects adjusted net profits to rise to RMB 82 billion, RMB 99 billion, and RMB 119 billion for the years 2025, 2026, and 2027 respectively, driven by operational leverage and AI efficiency improvements [4][18]. Business Segments - The existing home segment saw a revenue increase of 20% year-on-year, with a gross transaction value (GTV) growth of 28% [2][11]. - The new home segment outperformed expectations with a GTV increase of 53%, while the renovation segment's GTV also showed strong growth [2][11]. - The company is leveraging AI technology to enhance efficiency across its operations, with significant improvements in transaction conversion rates reported [3][13]. Market Position - The company continues to outperform the broader real estate market, with its GTV growth of 34% in Q1 compared to the national average of 16% for existing homes [11][12]. - The report highlights the company's expanding market share in the existing home sector, supported by improved agent productivity and AI-driven tools [3][11]. Valuation - The target price of $27.02 corresponds to a 27x price-to-earnings (PE) ratio for 2025, which is above the industry average of 24.7x [4][22]. - The report indicates that the company's valuation premium is justified by its superior growth prospects compared to the overall real estate market [22][23].

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].

Core Viewpoint - Jinglin Asset is optimistic about Chinese assets, believing that improving market sentiment and the increasing global competitiveness of Chinese companies present significant "alpha" opportunities [1][12]. Group 1: Jinglin Asset's Holdings - As of the end of Q1 2025, Jinglin Asset held stocks in 31 companies in the US market, with a total market value of $3.23 billion [1]. - The top ten holdings included Meta, Pinduoduo, NetEase, Manbang Group, TSMC, Futu Holdings, Apple, ZTO Express, Qifu Technology, and Beike, with Beike being a new addition to the list [3][4]. - Jinglin Asset increased its holdings in Beike by 422,800 shares, totaling 4.77 million shares by the end of Q1 2025 [7]. Group 2: Focus on Chinese Stocks - Jinglin Asset significantly increased its positions in several Chinese concept stocks, including buying 601,000 shares of Alibaba, which saw a price increase of nearly 56% in Q1 2025 [10]. - The firm also raised its stakes in TSMC and Futu Holdings, holding 1.575 million shares and 1.902 million shares, respectively, by the end of Q1 2025 [11]. - The firm’s partner expressed a complete shift away from US-only assets, focusing on Chinese companies related to technology and new consumption [11]. Group 3: Optimism Towards Chinese Assets - Jinglin Asset's confidence in Chinese assets is supported by several factors, including increased policy stimulus from the Chinese government and encouragement for companies to enhance shareholder returns through buybacks [13]. - Chinese companies are rapidly developing in key industries, with significant global competitiveness, particularly in electric vehicles, home appliances, smartphones, and clean energy equipment [14]. - China has become the world's largest automobile exporter in 2023 and holds a 50% share of global industrial robot installations [16]. - The valuation of Chinese stocks is attractive, with the MSCI China Index and CSI 300 Index having forward P/E ratios of 11.1 and 12.5, respectively, indicating they are at historically low levels [16].

Investment Rating - The report assigns a "Buy" rating to CRL, C&D, China Jinmao, and KE Holdings, indicating a positive outlook for these companies in the real estate sector [4][7][20]. Core Insights - The report emphasizes that more supportive property policies are expected to reinforce market recovery, particularly in tier-1 and tier-2 cities, driven by lower mortgage rates and successful policy implementations like property vouchers and home purchase subsidies [2][7]. - Site visits to various projects indicate a clear sign of market bottoming, with engaged sales teams and solid sell-through rates despite macro uncertainties [3][7]. - The report highlights a positive sentiment among prospective home buyers, who are financially capable but cautious about leveraging due to economic uncertainties [3]. Summary by Sections Market Dynamics - Centaline's Vice President believes additional policies will be introduced to support the recovery cycle, with a focus on urban renewal and inventory acquisition [2]. - Successful case studies, such as Xiamen, demonstrate the effectiveness of combined policy measures in stimulating demand [2]. Sales and Pricing Strategies - Developers are adopting unaggressive pricing strategies, which are facilitating solid project sell-through rates [3]. - The average downpayment ratio is reported at 40%, with first home mortgage rates at 3.15% and downpayment requirements at 15% [3]. Stock Recommendations - Preferred stocks include CRL (1109 HK, TP HKD36.30), C&D (1908 HK, TP HKD21.20), and China Jinmao (817 HK, TP HKD1.60), all rated "Buy" due to their resilience and strong pricing power [4][20]. - KE Holdings (BEKE US, TP USD26.30) is also highlighted for its market share gains in both primary and secondary markets [4][20].

Investment Rating - The report maintains a "Buy" rating for KE Holdings with a target price of USD 26.30, indicating a potential upside of approximately 30% from the current share price of USD 20.23 [5][7][23]. Core Insights - KE Holdings reported a 42% year-on-year growth in revenue and a 6% non-GAAP net profit margin in 1Q25, which exceeded management's guidance but was largely in line with market expectations. The management's guidance for a stable recovery in profitability is viewed positively [2][12]. - The company anticipates a flat secondary home Gross Transaction Value (GTV) and a 10% year-on-year growth in primary home GTV for 2Q25, which is considered conservative. The guidance for a 6.8% non-GAAP operating profit margin in 2025 suggests improved visibility for full-year earnings [2][12]. - Management expressed confidence in maintaining stable commission rates despite concerns about potential cuts in various cities, attributing any potential downside risks more to market competition than regulatory changes [3][4]. Financial Performance - In 1Q25, KE Holdings' total net revenue was RMB 23.328 billion, with a gross profit of RMB 4.821 billion, reflecting a 42% increase in revenue year-on-year [22]. - The company achieved a non-GAAP net profit of RMB 1.393 billion in 1Q25, which was stable compared to the previous quarter [22]. - The report projects total net revenues to grow from RMB 93.457 billion in 2024 to RMB 116.586 billion by 2027, with a consistent increase in operating profit over the same period [13]. Business Segments - The existing home transaction services segment generated RMB 6.870 billion in 1Q25, while new home transaction services contributed RMB 8.075 billion, marking a year-on-year growth of 64% [22]. - Home renovation and furnishing services showed a significant improvement in contribution margin, increasing to 32.6% in 1Q25 from 29.8% in 4Q24, indicating enhanced operational efficiency [4][22]. Valuation Metrics - The report maintains a target price based on an unchanged target PE multiple of 23x, applied to the average 2025-26 non-GAAP EPS estimate of RMB 8.44 [5][23]. - The projected PE ratios for the upcoming years are 23.0 for 2024, 19.2 for 2025, and further declining to 13.2 by 2027, reflecting a positive outlook on earnings growth [8][15].

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]