Investment Rating - The report maintains a "Buy" rating for the company, citing its strong market position and expected growth in adjusted net profit for 2024/2025/2026 [3][6] Core Views - The company benefits from favorable real estate policies, which are expected to drive market recovery and enhance its market share [6] - The company's new home GTV monetization rate reached a historical high in 2024Q3, with a GTV of 227.6 billion yuan, up 18.5% YoY, outperforming the industry [5] - The company's rental service business revenue grew 118% YoY in 2024Q3, driven by the rapid expansion of its "Worry-Free Rent" managed properties [6] - The company has consistently delivered on its shareholder return commitments, with $5.8 billion used for share repurchases in the first three quarters of 2024 [6] Financial Performance - The company's revenue for 2024Q3 was 22.6 billion yuan, up 26.8% YoY, with a gross margin of 22.7%, down 5.2 percentage points QoQ due to increased fixed costs [7] - Adjusted net profit for 2024Q3 was 1.78 billion yuan, down 17.5% YoY, but exceeded Bloomberg consensus expectations [7] - The company's existing home GTV in 2024Q3 was 477.8 billion yuan, up 8.8% YoY, with expectations of significant YoY and QoQ growth in Q4 due to policy tailwinds [7] Business Segments - The home decoration and furnishing segment saw a GTV of 4.1 billion yuan in 2024Q3, up 24.6% YoY, with a contribution margin increase of 2.1 percentage points to 31% [9] - The rental service business contributed a profit margin of 4.4% in 2024Q3, down 1.4 percentage points QoQ due to seasonal cost increases [6] Market Data - The company's closing price was $19.98 per ADS, with a total market capitalization of $24.1 billion and total assets of 1,227.96 billion yuan as of November 21, 2024 [1] - The company's net assets were 707.75 billion yuan, with a net asset per share of 19.5 yuan [1]

Financial Performance - Gross transaction value (GTV) reached RMB736.8 billion (US$105.0 billion), a 12.5% year-over-year increase[4] - Net revenues increased by 26.8% to RMB22.6 billion (US$3.2 billion) compared to RMB17.8 billion in the same period of 2023[5][15] - Net income was RMB1,168 million (US$167 million), with adjusted net income at RMB1,782 million (US$254 million)[6] - Total net revenues for the three months ended September 30, 2024, increased to RMB 22,584,647, representing a 27.5% growth compared to RMB 17,810,705 for the same period in 2023[68] - Net income attributable to KE Holdings Inc. for the three months ended September 30, 2024, was RMB 1,171,073, compared to RMB 1,158,042 for the same period in 2023, reflecting a 1.1% increase[70] - The company reported a total comprehensive income of RMB 1,049,224 for the three months ended September 30, 2024, up from RMB 927,825 in the same quarter of 2023[70] - The net income for the nine months ended September 30, 2024, was RMB 3,500,932, representing a decrease of 32.9% from RMB 5,219,541 in the same period of 2023[75] Revenue Breakdown - Net revenues from home renovation and furnishing grew by 32.6% to RMB4.2 billion (US$0.6 billion) year-over-year[21] - Net revenues from home rental services surged by 118.4% to RMB3.9 billion (US$0.6 billion) compared to RMB1.8 billion in the same period of 2023[22] - Contribution from new home transaction services net revenues increased to RMB 7,726,316 for the three months ended September 30, 2024, compared to RMB 5,901,966 in the same period of 2023, representing a growth of approximately 30.9%[84] - Home renovation and furnishing net revenues for the nine months ended September 30, 2024, reached RMB 10,662,113, up from RMB 7,209,569 in the same period of 2023, indicating a growth of about 48.5%[84] - Home rental services net revenues for the three months ended September 30, 2024, were RMB 3,941,234, significantly higher than RMB 1,804,374 for the same period in 2023, reflecting an increase of approximately 118.5%[84] - Total contribution from existing home transaction services for the three months ended September 30, 2024, was RMB 2,549,227, down from RMB 3,069,848 in the same period of 2023, indicating a decline of approximately 17%[84] Expenses and Costs - Total cost of revenues increased by 35.0% to RMB17.4 billion (US$2.5 billion) in Q3 2024[23] - Gross profit increased by 5.2% to RMB5.1 billion (US$0.7 billion) in Q3 2024, with a gross margin of 22.7%, down from 27.4% in Q3 2023[30] - Total operating expenses rose by 11.0% to RMB4.4 billion (US$0.6 billion) in Q3 2024, with sales and marketing expenses increasing by 18.6% to RMB1.9 billion (US$0.3 billion)[32][33] - Research and development expenses increased by 21.5% to RMB573 million (US$82 million) in Q3 2024, driven by higher headcount and technical service costs[34] - Operating expenses for the three months ended September 30, 2024, totaled RMB 4,407,769, an increase from RMB 3,969,722 in the same period last year[68] Cash and Assets - As of September 30, 2024, the combined balance of cash, cash equivalents, restricted cash, and short-term investments was RMB59.5 billion (US$8.5 billion)[45] - Cash and cash equivalents were reported at RMB 9,576,948 as of September 30, 2024, a decrease from RMB 19,634,716 as of December 31, 2023[64] - Short-term investments increased significantly to RMB 43,654,035 as of September 30, 2024, up from RMB 34,257,958 as of December 31, 2023, representing a growth of approximately 27%[64] - The company reported a net decrease in cash and cash equivalents of RMB 1,706,229 for the three months ended September 30, 2024[82] Shareholder Information - The company allocated approximately US$200 million to share repurchases in Q3 2024[14] - The company has repurchased approximately 102.2 million ADSs (representing approximately 306.5 million Class A ordinary shares) for a total consideration of approximately US$1,493.4 million under its share repurchase program[46] - Basic and diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders were RMB1.04 (US$0.15) and RMB1.00 (US$0.14) in Q3 2024, compared to RMB0.99 and RMB0.97 in Q3 2023[41] - The weighted average number of ADS used in computing net income per ADS, diluted, for the three months ended September 30, 2024, was 1,167,050,588[72] Liabilities and Equity - Current liabilities increased to RMB 43,147,206 as of September 30, 2024, compared to RMB 39,523,983 as of December 31, 2023, reflecting a growth of approximately 6.5%[65] - Total shareholders' equity decreased to RMB 70,893,663 as of September 30, 2024, down from RMB 72,201,105 as of December 31, 2023, indicating a decline of about 1.8%[66] - Total non-current liabilities increased to RMB 8,754,843 as of September 30, 2024, from RMB 8,606,843 as of December 31, 2023, marking an increase of approximately 1.7%[65] - The company’s accumulated deficit improved to RMB (2,178,008) as of September 30, 2024, from RMB (5,672,916) as of December 31, 2023, showing a significant reduction in losses[66]

Investment Rating - The report maintains a "Buy" rating for the company, with expected price-to-earnings (PE) ratios for 2024-2026 at 19.0x, 17.9x, and 15.5x respectively [2]. Core Insights - The company reported a revenue of 22.585 billion yuan for Q3 2024, representing a year-on-year increase of 26.8%, while net profit decreased by 0.2% to 1.168 billion yuan. Adjusted net profit fell by 17.5% to 1.782 billion yuan [1]. - The increase in revenue was accompanied by a higher rise in operating costs, which increased by 35.0% year-on-year, leading to a decline in gross margin by 4.7 percentage points to 22.7% [1]. - The company experienced growth in both new and existing home transactions, with existing home gross transaction value (GTV) at 477.8 billion yuan, up 8.8% year-on-year, and new home GTV at 227.6 billion yuan, up 18.4% year-on-year [1]. - The company's "one body, three wings" strategy is showing positive results, with home decoration, rental housing, and emerging businesses contributing to a total revenue of 8.64 billion yuan, a 54.3% increase year-on-year, accounting for 38.3% of total revenue [1]. - The company has been actively repurchasing shares, spending approximately 5.8 billion USD in 2024, which represents 3.32% of the total shares outstanding at the beginning of the period [1]. Financial Performance Summary - For 2024, the company’s projected Non-GAAP net profits are adjusted to 9.01 billion yuan, reflecting a year-on-year decrease of 8.0%, with subsequent years showing growth of 6.3% and 15.4% for 2025 and 2026 respectively [2]. - The revenue forecast for 2024 is set at 91.12 billion yuan, with a growth rate of 17.16%, and is expected to reach 107.62 billion yuan in 2025 [5]. - The company’s diluted earnings per share (EPS) for 2024 is projected at 2.486 yuan, with a return on equity (ROE) of 7.12% [5].

Financial Data and Key Metrics Changes - In Q2 2024, total GTV reached RMB 839 billion, up 7.5% year-over-year, while net revenues were RMB 23.4 billion, representing a year-over-year increase of 19.9% [9][10] - Gross margin increased by 0.5 percentage points year-over-year to 27.9%, and GAAP net income reached RMB 1.9 billion, rising by 46.2% year-over-year [9][14] - Non-GAAP net income grew by 13.9% year-over-year to RMB 2.69 billion, exceeding market consensus [9][10] Business Line Data and Key Metrics Changes - Revenue from existing home transactions reached RMB 7.3 billion, up 14.3% year-over-year, with PTV at RMB 570.7 billion, increasing 25% year-over-year [10][11] - New home GTV reached RMB 235.3 billion, growing by 20.2% year-over-year and 55% quarter-over-quarter, despite a market downturn [10][11] - Revenue from home renovation and furnishings grew by 85.3% year-over-year, while home rental services revenue surged by 167.1% year-over-year [12][13] Market Data and Key Metrics Changes - The existing home market saw a notable recovery, with transaction volumes in first-tier cities increasing significantly, particularly in June [19][20] - The proportion of national GTV from existing home transactions increased from around 40% last year to approximately 44% in the first half of this year [18][19] - The new home market's year-over-year sales decline narrowed month by month in Q2, but overall performance remained subdued [21][22] Company Strategy and Development Direction - The company is focusing on enhancing operational capabilities, expanding store and agent networks, and improving customer acquisition strategies [4][5] - Emphasis is placed on community-based business models to better meet customer needs and differentiate from traditional residential industry practices [6][7] - The company aims to balance scale, quality, and efficiency while investing in infrastructure and technology to support growth [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that supportive policies have contributed to market recovery, particularly in first-tier cities, and expressed optimism about the second half of the year [9][18] - The company anticipates challenges in the new home market but remains committed to improving operational efficiency and service quality [21][22] - Management highlighted the importance of adapting to changing customer needs and market dynamics to sustain growth [24][25] Other Important Information - The company has expanded its share repurchase program from US$2 billion to US$3 billion, reflecting a commitment to returning value to shareholders [15][16] - The number of active stores increased by over 2,400, or 6%, and the number of active agents rose by 40,000, indicating growth in operational capacity [3][4] Q&A Session Summary Question: Changes in the real estate market post-policy implementation - Management noted steady month-by-month improvement in the housing market, particularly in existing home transactions, with significant recovery in first-tier cities [18][19] Question: Performance of new home business compared to the industry - The new home business significantly outperformed the industry, with a notable increase in contracted transaction volume and revenue, indicating strong operational capabilities [23][24]

阿里整合国内外电商业务，蒋凡任负责人。 信息来自我们下午发布的独家： 11 月 21 日傍晚，阿里巴巴集团 CEO 吴泳铭发布全员邮件，宣布阿里成立电商事 业群，整合国内外电商业务，包括淘天集团、国际数字商业集团、以及 1688 和闲 鱼两个战略级创新业务。 自第三季度以来，一系列新发布的宏观政策为我们带来了新的机遇，同时也带来了挑战。 中国国内市场的特点是不断变化、多样化的商业模式和日益激烈的竞争。然而，我们团队 的逐渐老化和能力不足可能会导致我们错失一些宏观机会，特别是在面对新的或不断发展 的情况时。 例如，今年推出的多项宏观政策为行业和消费者需求提供了显著支持。然而，由于我们作 为第三方平台的运营经验有限，我们的团队未能充分利用这一宏观经济变化。因此，为了 在与类似产品的竞争中保持竞争力，我们不得不承担比同行高得多的成本，这不可避免地 影响了我们现在和不久的将来的盈利能力。 蒋凡担任电商事业群 CEO，向吴泳铭汇报。 在邮件中，吴泳铭说电商进入了新时代，阿里要提升全球化的供应链和消费者服务能力。 AI 仍然是他的关注重点，阿里要抓住如今以 AI 为核心的生产力革命。 接下来，原本作为独立子公司的淘天集团 ...

Investment Rating - Maintains a **Buy** rating with a target price raised to **USD 23.3** (previously USD 21.5), reflecting a 15.2% upside from the current price of USD 20.23 [1][5] Core Views - **Revenue Growth**: Q3 2024 revenue increased by 27% YoY to RMB 22.6 billion, slightly below Bloomberg consensus and CICC estimates by 1.5% and 4.7%, respectively, due to weak existing home transaction (EHT) sentiment [1] - **Non-GAAP Net Income**: Q3 2024 non-GAAP net income was RMB 1.8 billion, with a gross margin of 7.9%, in line with expectations, driven by cost control measures [1] - **Market Share Expansion**: Continued market share gains in both existing home transactions (EHT) and new home transactions (NHT), along with successful new business expansion, support a positive outlook [1] - **Q4 2024 Outlook**: EHT and NHT gross transaction value (GTV) are expected to grow over 40% YoY, supported by strong performance in October and November, though additional expenses of RMB 1-1.5 billion may reduce Q4 non-GAAP net income to RMB 220 million [2] Business Performance - **EHT Performance**: EHT GTV grew 9% YoY but declined 17% QoQ due to slowing transaction sentiment post-June peak, with contribution margin dropping 7 percentage points to 41% due to increased fixed costs from agent expansion [2] - **NHT Performance**: NHT GTV grew 18.5% YoY, significantly outperforming the industry's 19% decline, driven by partnerships with state-owned developers [2] - **Policy Impact**: Policy Package 924 and subsequent measures have significantly boosted transaction sentiment, with better sustainability compared to previous policy supports [2] Financial Projections - **Revenue Growth**: FY2024E revenue is projected at RMB 91.0 billion, growing 17.1% YoY, with FY2025E and FY2026E revenues expected at RMB 107.7 billion (+18.3% YoY) and RMB 121.8 billion (+13.0% YoY), respectively [4] - **Non-GAAP Net Profit**: FY2024E non-GAAP net profit is estimated at RMB 8.1 billion, with FY2025E and FY2026E projections of RMB 9.4 billion (+16.7% YoY) and RMB 10.9 billion (+16.0% YoY), respectively [4] - **Valuation Metrics**: The target price implies a 2025E non-GAAP P/E of 21.4x, with core business valued at USD 22.3 per ADS and Shengdu at USD 0.9 per ADS [1][10] Corporate Social Responsibility - **Employee Welfare**: Plans to invest RMB 1.2 billion over the next 3-4 years in employee welfare, including transitioning to fixed salary structures and providing social insurance for brokers, enhancing long-term value [3] Valuation Summary - **DCF Valuation**: The discounted cash flow (DCF) valuation for the core business is RMB 193.7 billion, with a total enterprise value of RMB 201.7 billion, translating to a valuation of USD 23.3 per ADS [9][10] - **SOTP Valuation**: The sum-of-the-parts (SOTP) valuation includes RMB 193.7 billion for the core business and RMB 8.0 billion for Shengdu, resulting in a total valuation of RMB 201.7 billion (USD 28.0 billion) [10]

Investment Rating - The report maintains a "BUY" rating for Ke Holdings (BEKE US) with a target price raised to US$23.30 from US$21.50, indicating a potential upside of 15.2% from the current price of US$20.23 [3]. Core Insights - Ke Holdings reported a revenue increase of 27% year-over-year (YoY) to RMB22.6 billion for Q3 2024, although this was slightly below consensus estimates due to mixed performance in existing home transactions [1]. - The company is expected to benefit from favorable policies in Q4 2024, with guidance indicating over 40% YoY growth in both existing and new home transaction volumes [1]. - The report highlights the company's proactive expansion strategy, which has led to an increase in fixed costs but is expected to enhance long-term value through improved employee compensation and social responsibility initiatives [1]. Financial Performance Summary - Revenue for FY24E is projected at RMB91.0 billion, with a YoY growth of 17.1%, and net profit is expected to be RMB5.19 billion [2]. - Non-GAAP net profit for Q3 2024 was RMB1.8 billion, with a margin of 7.9%, aligning with estimates [1]. - The company anticipates a non-GAAP net profit of RMB2.2 billion for Q4 2024, reflecting a margin of 7.7% [1]. Business Segment Performance - Existing home transaction (EHT) gross transaction value (GTV) rose 9% YoY but fell 17% quarter-over-quarter (QoQ), while new home transaction (NHT) GTV increased by 18.5% YoY, outperforming the industry [1]. - The report notes a divergence in performance between EHT and NHT businesses, with EHT facing challenges due to low transaction sentiment [1]. Future Outlook - The report projects continued growth in both EHT and NHT segments, driven by recent policy support and market share gains [1]. - The company plans to invest RMB1.2 billion over the next 3-4 years in staff welfare and social insurance for agents, which is expected to enhance its long-term value [1].

Financial Performance - Gross transaction value (GTV) reached RMB736.8 billion (US$105.0 billion), a 12.5% year-over-year increase[2] - Net revenues increased by 26.8% to RMB22.6 billion (US$3.2 billion) compared to RMB17.8 billion in the same period of 2023[9] - Net income was RMB1,168 million (US$167 million), with adjusted net income at RMB1,782 million (US$254 million)[3] - Total net revenues for the three months ended September 30, 2024, increased to RMB 22,584,647, representing a 27.5% growth compared to RMB 17,810,705 for the same period in 2023[63] - Net income attributable to KE Holdings Inc. for the three months ended September 30, 2024, was RMB 1,171,073, compared to RMB 1,170,290 in the previous year[65] - Net income for the nine months ended September 30, 2024, was RMB 5,219,541, compared to RMB 3,500,932 for the same period in 2023, reflecting a year-over-year increase of 49.0%[69] - Total revenue for the nine months ended September 30, 2024, was RMB 9,388,339, compared to RMB 7,689,643 for the same period in 2023, reflecting a growth of 22.1%[74] Revenue Breakdown - Net revenues from new home transaction services grew by 30.9% to RMB7.7 billion (US$1.1 billion)[12] - Net revenues from home rental services surged by 118.4% to RMB3.9 billion (US$0.6 billion)[15] - New home transaction services revenue rose to RMB 7,726,316, a 30.9% increase from RMB 5,901,966 year-over-year[63] - Home rental services revenue surged to RMB 3,941,234, reflecting a 118.5% increase compared to RMB 1,804,374 in the previous year[63] - Net revenues for existing home transaction services increased to RMB 6,307,085 for the three months ended September 30, 2024, compared to RMB 6,217,054 for the same period in 2023, reflecting a growth of approximately 1.4%[78] - Contribution from new home transaction services rose to RMB 1,483,195 for the three months ended September 30, 2024, up from RMB 1,913,932 in the same period of 2023, indicating a decline of about 22.5%[78] - Home renovation and furnishing services generated net revenues of RMB 3,176,739 for the three months ended September 30, 2024, compared to RMB 4,213,041 in the same period of 2023, representing a decrease of approximately 24.6%[78] - Home rental services reported net revenues of RMB 1,804,374 for the three months ended September 30, 2024, a significant increase from RMB 3,941,234 in the same period of 2023, showing a decline of about 54.2%[78] - Emerging and other services achieved net revenues of RMB 620,541 for the three months ended September 30, 2024, compared to a loss of RMB 64,122 in the same period of 2023, indicating a turnaround in performance[78] - Total contribution from all services for the three months ended September 30, 2024, was RMB 3,069,848, up from RMB 2,549,227 in the same period of 2023, reflecting an increase of approximately 20.4%[78] - The company reported a total net revenue of RMB 21,904,172 for the nine months ended September 30, 2024, compared to RMB 19,278,973 for the same period in 2023, marking a growth of about 13.5%[78] Expenses and Costs - Total cost of revenues increased by 35.0% to RMB17.4 billion (US$2.5 billion) from RMB12.9 billion in the same period of 2023[16] - Total operating expenses rose by 11.0% to RMB4.4 billion (US$0.6 billion) in Q3 2024, compared to RMB4.0 billion in Q3 2023[25] - Research and development expenses increased by 21.5% to RMB573 million (US$82 million) in Q3 2024, driven by higher headcount and technical service costs[27] - The company reported share-based compensation expenses of RMB 814,129 for the three months ended September 30, 2024, compared to RMB 606,576 for the same period in 2023, marking an increase of 34.2%[69] - The total commission and compensation expenses for the nine months ended September 30, 2024, were RMB 10,700,539, a decrease from RMB 11,407,196 in the same period of 2023, indicating a reduction of approximately 6.2%[78] Profitability Metrics - Gross profit increased by 5.2% to RMB5.1 billion (US$0.7 billion) in Q3 2024, with a gross margin of 22.7%, down from 27.4% in Q3 2023[23] - Adjusted EBITDA was RMB2,154 million (US$307 million) in Q3 2024, down from RMB2,515 million in Q3 2023[29] - Basic and diluted net income per ADS were RMB1.04 (US$0.15) and RMB1.00 (US$0.14) in Q3 2024, compared to RMB0.99 and RMB0.97 in Q3 2023[32] - Adjusted net income was RMB1,782 million (US$254 million) in Q3 2024, compared to RMB2,159 million in Q3 2023[30] - For the three months ended September 30, 2024, adjusted net income was RMB 2,159,339, an increase from RMB 1,781,892 for the same period in 2023, representing a growth of 21.2%[69] Balance Sheet Highlights - As of September 30, 2024, the combined balance of cash, cash equivalents, restricted cash, and short-term investments was RMB59.5 billion (US$8.5 billion)[36] - As of September 30, 2024, total assets amounted to RMB 122,795,712, an increase from RMB 120,331,931 as of December 31, 2023[52][60] - Current assets decreased slightly to RMB 69,678,235 from RMB 69,753,623, while cash and cash equivalents dropped to RMB 9,576,948 from RMB 19,634,716[52][54] - Total liabilities increased to RMB 51,902,049 from RMB 48,130,826, with current liabilities rising to RMB 43,147,206 from RMB 39,523,983[54][60] - Shareholders' equity decreased to RMB 70,893,663 from RMB 72,201,105, indicating a decline in the company's net worth[61][60] - The company reported a decrease in employee compensation and welfare payable from RMB 8,145,779 to RMB 6,136,481[54] - Short-term investments increased significantly to RMB 43,654,035 from RMB 34,257,958, reflecting a strategic shift in asset allocation[52] - The company holds restricted cash of RMB 6,243,476 as of September 30, 2024, slightly up from RMB 6,222,745[52] - Goodwill remained stable at approximately RMB 4,839,219, showing consistency in the company's acquisitions[52] - The company reported a decrease in accumulated deficit from RMB 5,672,916 to RMB 2,178,008, indicating improved financial health[61] Strategic Initiatives - The company allocated approximately US$200 million for share repurchases in the third quarter[8] - The management governance framework has been upgraded to ensure steady and sustainable growth[5] - The company is focusing on expanding its market presence and enhancing its service offerings to drive future growth[78] - New product and technology developments are underway to improve service efficiency and customer satisfaction[78] - The company plans to hold an earnings conference call on November 21, 2024, to discuss financial results[38]

Core Insights - KE Holdings Inc. reported a strong financial performance in Q3 2024, with significant year-over-year growth in gross transaction value (GTV) and net revenues, indicating a recovery in the housing market and effective business strategies [2][8][30]. Business and Financial Highlights - Gross transaction value (GTV) reached RMB736.8 billion (US$105.0 billion), up 12.5% year-over-year, driven by increases in both existing and new home transactions [2][8]. - Net revenues increased by 26.8% to RMB22.6 billion (US$3.2 billion), primarily due to growth in new home transaction services and expansion in home renovation and furnishing [8][30]. - Net income was RMB1,168 million (US$167 million), slightly down from RMB1,170 million in Q3 2023, while adjusted net income was RMB1,782 million (US$254 million) [30][31]. - The number of stores increased by 12.1% to 48,230, and the number of active agents rose by 11.0% to 476,420, reflecting the company's expanding operational footprint [2][8]. Segment Performance - Existing home transaction services generated net revenues of RMB6.2 billion (US$0.9 billion), relatively stable compared to the previous year, while GTV increased by 8.8% [9][10]. - New home transaction services saw net revenues rise by 30.9% to RMB7.7 billion (US$1.1 billion), supported by an 18.4% increase in GTV [11][12]. - Home renovation and furnishing revenues increased by 32.6% to RMB4.2 billion (US$0.6 billion), driven by synergies with home transaction services [12]. - Home rental services experienced a significant growth of 118.4%, with revenues reaching RMB3.9 billion (US$0.6 billion) [13]. Cost and Profitability - Total cost of revenues increased by 35.0% to RMB17.4 billion (US$2.5 billion), impacting gross profit, which rose by only 5.2% to RMB5.1 billion (US$0.7 billion) [14][21]. - Gross margin decreased to 22.7% from 27.4% year-over-year, attributed to a lower contribution from higher-margin existing home transaction services [21][25]. - Operating income was RMB727 million (US$104 million), down from RMB911 million in the same period last year, with an operating margin of 3.2% [25][26]. Cash and Shareholder Returns - The company maintained robust cash reserves, with a total of RMB59.5 billion (US$8.5 billion) in cash, cash equivalents, and short-term investments as of September 30, 2024 [34]. - Approximately US$200 million was allocated for share repurchases in Q3 2024, reflecting the company's commitment to returning value to shareholders [6][35].

Financial Performance - Total transaction volume for Q3 2024 reached RMB 736.8 billion (USD 105 billion), a 12.5% YoY increase[3] - Net income for Q3 2024 was RMB 22.6 billion (USD 3.2 billion), a 26.8% YoY increase[4] - Net profit for Q3 2024 was RMB 1.168 billion (USD 167 million), with adjusted net profit at RMB 1.782 billion (USD 254 million)[5] - Net revenue for Q3 2024 reached RMB 22.58 billion (USD 3.22 billion), a 26.8% increase compared to RMB 17.81 billion in Q3 2023[56] - Gross profit for Q3 2024 was RMB 5.13 billion (USD 731.7 million), up 5.2% from RMB 4.88 billion in Q3 2023[56] - Net income attributable to KE Holdings Inc. for Q3 2024 was RMB 1.17 billion (USD 166.88 million), a 1.1% increase from RMB 1.16 billion in Q3 2023[58] - Total operating expenses for Q3 2024 increased to RMB 4.41 billion (USD 628.1 million), up 11% from RMB 3.97 billion in Q3 2023[56] - Operating profit for Q3 2024 decreased 20.2% YoY to RMB 727.0 million (USD 103.6 million)[56] - Total revenue for the first nine months of 2024 reached RMB 62.33 billion (USD 8.88 billion), up 8.3% from RMB 57.57 billion in the same period of 2023[56] - Net income for the first nine months of 2024 was RMB 3.50 billion (USD 498.9 million), down 32.9% from RMB 5.22 billion in the same period of 2023[56] - Basic earnings per share for the nine months ended September 30, 2024, were RMB 1.03 (USD 0.15), compared to RMB 1.48 in the same period in 2023[60] - Diluted earnings per share for the nine months ended September 30, 2024, were RMB 0.99 (USD 0.14), compared to RMB 1.44 in the same period in 2023[60] - Adjusted operating profit for the nine months ended September 30, 2024, was RMB 5,135,508 thousand (USD 731,804 thousand), compared to RMB 7,863,542 thousand in the same period in 2023[62] - Adjusted net profit for the nine months ended September 30, 2024, was RMB 5,867,447 thousand (USD 836,106 thousand), compared to RMB 8,084,730 thousand in the same period in 2023[62] - Adjusted EBITDA for the nine months ended September 30, 2024, was RMB 7,191,233 thousand (USD 1,024,743 thousand), compared to RMB 9,644,947 thousand in the same period in 2023[62] - Net profit attributable to ordinary shareholders of KE Holdings Inc. for the nine months ended September 30, 2024, was RMB 3,494,908 thousand (USD 498,021 thousand), a decrease compared to RMB 5,213,619 thousand in the same period of 2023[64] - Adjusted net profit attributable to ordinary shareholders of KE Holdings Inc. for the nine months ended September 30, 2024, was RMB 5,861,402 thousand (USD 835,245 thousand), compared to RMB 8,078,787 thousand in the same period of 2023[64] - Basic adjusted net income per ADS for the nine months ended September 30, 2024, was RMB 5.16 (USD 0.74), compared to RMB 6.87 in the same period of 2023[66] - Diluted adjusted net income per ADS for the nine months ended September 30, 2024, was RMB 4.99 (USD 0.71), compared to RMB 6.71 in the same period of 2023[66] Business Segments Performance - Home renovation and furnishing business revenue reached RMB 4.21 billion, a 32.6% YoY increase[11] - Rental services revenue reached RMB 3.94 billion, a 118.4% YoY increase[11] - Existing home business net revenue remained flat at RMB 6.2 billion (USD 900 million) in Q3 2024 compared to RMB 6.3 billion in Q3 2023, while total transaction value increased by 8.8% to RMB 477.8 billion (USD 68.1 billion)[13] - New home business net revenue increased by 30.9% to RMB 7.7 billion (USD 1.1 billion) in Q3 2024, driven by an 18.4% rise in total transaction value to RMB 227.6 billion (USD 32.4 billion)[14] - Home renovation and furnishing net revenue grew by 32.6% to RMB 4.2 billion (USD 600 million) in Q3 2024, supported by increased order volume and improved delivery capabilities[14] - Rental services net revenue surged by 118.4% to RMB 3.9 billion (USD 600 million) in Q3 2024 due to an increase in rental properties under the "Worry-Free Lease" model[16] - New home business revenue grew 30.9% YoY to RMB 7.73 billion (USD 1.10 billion) in Q3 2024[56] - Home renovation and furnishing revenue increased 32.6% YoY to RMB 4.21 billion (USD 600.4 million) in Q3 2024[56] - Existing home business net revenue for the three months ended September 30, 2024, was RMB 6,217,054 thousand (USD 885,923 thousand), a slight decrease from RMB 6,307,085 thousand in the same period last year[72] - New home business net revenue for the three months ended September 30, 2024, increased to RMB 7,726,316 thousand (USD 1,100,991 thousand) from RMB 5,901,966 thousand in the same period last year[72] - Home decoration and furnishing business net revenue for the three months ended September 30, 2024, rose to RMB 4,213,041 thousand (USD 600,354 thousand) from RMB 3,176,739 thousand in the same period last year[72] - Rental services net revenue for the three months ended September 30, 2024, surged to RMB 3,941,234 thousand (USD 561,621 thousand) from RMB 1,804,374 thousand in the same period last year[72] - Emerging businesses and others net revenue for the three months ended September 30, 2024, was RMB 487,002 thousand (USD 69,397 thousand), down from RMB 620,541 thousand in the same period last year[72] - Existing home business contribution profit for the three months ended September 30, 2024, was RMB 2,549,227 thousand (USD 363,262 thousand), a decrease from RMB 3,069,848 thousand in the same period last year[72] - New home business contribution profit for the three months ended September 30, 2024, increased to RMB 1,913,932 thousand (USD 272,733 thousand) from RMB 1,483,195 thousand in the same period last year[72] - Home decoration and furnishing business contribution profit for the three months ended September 30, 2024, rose to RMB 1,316,028 thousand (USD 187,533 thousand) from RMB 924,488 thousand in the same period last year[72] - Rental services contribution profit for the three months ended September 30, 2024, was RMB 174,262 thousand (USD 24,832 thousand), up from RMB 56,353 thousand in the same period last year[72] - Emerging businesses and others contribution profit for the three months ended September 30, 2024, was RMB 386,276 thousand (USD 55,044 thousand), down from RMB 556,419 thousand in the same period last year[72] Operational Metrics - Number of stores as of September 30, 2024, was 48,230, a 12.1% YoY increase, with active stores at 46,857, a 14.6% YoY increase[5] - Number of agents as of September 30, 2024, was 476,420, an 11.0% YoY increase, with active agents at 423,400, a 6.1% YoY increase[5] - Average mobile MAUs for Q3 2024 were 46.2 million, compared to 49.2 million in the same period last year[5] Share Repurchase and Financial Position - The company repurchased approximately USD 200 million worth of shares in Q3 2024[11] - The company has repurchased approximately 102.2 million ADSs (equivalent to approximately 306.5 million Class A ordinary shares) under its share repurchase program, with a total consideration of approximately USD 1,493.4 million[30] - Cash, cash equivalents, restricted cash, and short-term investments totaled RMB 59.5 billion (USD 8.5 billion) as of September 30, 2024[29] - Total assets increased from RMB 120,331,931 thousand as of December 31, 2023, to RMB 122,795,712 thousand as of September 30, 2024, representing a growth of approximately 2.05%[48] - Cash and cash equivalents decreased significantly from RMB 19,634,716 thousand as of December 31, 2023, to RMB 9,576,948 thousand as of September 30, 2024, a decline of approximately 51.23%[48] - Short-term investments increased from RMB 34,257,958 thousand as of December 31, 2023, to RMB 43,654,035 thousand as of September 30, 2024, a growth of approximately 27.43%[48] - Total current liabilities rose from RMB 39,523,983 thousand as of December 31, 2023, to RMB 43,147,206 thousand as of September 30, 2024, an increase of approximately 9.17%[51] - Lease liabilities (current portion) increased from RMB 9,368,607 thousand as of December 31, 2023, to RMB 12,900,946 thousand as of September 30, 2024, a growth of approximately 37.71%[51] - Total liabilities grew from RMB 48,130,826 thousand as of December 31, 2023, to RMB 51,902,049 thousand as of September 30, 2024, an increase of approximately 7.84%[51] - Shareholders' equity decreased slightly from RMB 72,201,105 thousand as of December 31, 2023, to RMB 70,893,663 thousand as of September 30, 2024, a decline of approximately 1.81%[53] - Accumulated deficit improved from RMB (5,672,916) thousand as of December 31, 2023, to RMB (2,178,008) thousand as of September 30, 2024, reflecting a reduction in losses[53] - Total equity (including non-controlling interests) decreased from RMB 72,201,105 thousand as of December 31, 2023, to RMB 70,893,663 thousand as of September 30, 2024, a decline of approximately 1.81%[53] - Net cash provided by operating activities for the nine months ended September 30, 2024, was RMB 4,306,568 thousand (USD 613,680 thousand), a decrease compared to RMB 9,388,339 thousand in the same period of 2023[69] - Net cash used in investing activities for the nine months ended September 30, 2024, was RMB 7,362,441 thousand (USD 1,049,140 thousand), compared to RMB 7,689,643 thousand in the same period of 2023[69] - Net cash used in financing activities for the nine months ended September 30, 2024, was RMB 6,966,444 thousand (USD 992,710 thousand), compared to RMB 5,484,524 thousand in the same period of 2023[69] - Cash and cash equivalents and restricted cash at the end of September 30, 2024, were RMB 15,820,424 thousand (USD 2,254,392 thousand), compared to RMB 21,995,376 thousand at the end of September 30, 2023[69] Non-GAAP Financial Measures - Adjusted operating profit margin is defined as adjusted operating profit (loss) as a percentage of net revenue[26] - Adjusted EBITDA is a non-GAAP financial measure defined as net profit (loss) excluding items such as income tax expense, share-based compensation, and depreciation[26] - Adjusted net profit (loss) attributable to KE Holdings Inc. ordinary shareholders is a non-GAAP measure excluding items like share-based compensation and amortization of intangible assets[26] - Non-GAAP financial measures are used by the company to evaluate operating performance and formulate operational plans, including adjusted operating profit (loss) and adjusted EBITDA[37] - The company emphasizes that non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP measures such as gross profit, net profit (loss), or other performance indicators[38] - Adjusted operating profit (loss) excludes share-based compensation expenses, amortization of intangible assets from acquisitions and business cooperation agreements, and impairment of goodwill, intangible assets, and other long-term assets[38] - Adjusted net profit (loss) excludes share-based compensation, amortization of intangible assets, fair value changes of long-term investments and receivables, impairment of goodwill and other long-term assets, investment impairment, and tax effects of non-GAAP adjustments[40] - Adjusted EBITDA excludes income tax expenses, share-based compensation, intangible asset amortization, depreciation of property, plant, and equipment, net interest income, fair value changes of long-term investments and receivables, impairment of goodwill and other long-term assets, and investment impairment[40] Strategic and Operational Highlights - The company's "One Body, Three Wings" strategy saw a 54.3% YoY increase in revenue, accounting for 38.3% of total net revenue, up 6.8 percentage points from the same period last year[11] - The company operates a leading online and offline integrated real estate transaction and service platform in China, with over 23 years of operational experience through its subsidiary Lianjia[41] - The company's strategic and operational plans, as well as management discussions, contain forward-looking statements, which are subject to risks and uncertainties[43] - The company does not undertake any obligation to update forward-looking statements unless required by applicable law[43] - The company's board of directors includes executive directors Peng Yongdong, Shan Yigang, Xu Wangang, and Xu Tao, as well as non-executive director Li Zhaohui and independent non-executive directors Chen Xiaohong, Zhu Hansong, and Wu Jun[45] Exchange Rate and Other Information - The exchange rate used for RMB to USD conversion is RMB 7.0176 to USD 1.00, based on the Federal Reserve H.10 statistical release as of September 30, 2024[36] - The company will hold an earnings call on November 21, 2024, at 7:00 AM Eastern Time to discuss financial results[33] - The company's unaudited condensed consolidated balance sheet is presented in thousands, except for share and per share data[47]