Core Viewpoint - Beike's Q3 2025 financial report shows a revenue increase of 2.1% year-on-year to RMB 231 billion, but net profit has significantly declined by 36.1%, indicating a situation of "increased revenue without increased profit" [1][2]. Financial Performance - Q3 net income reached RMB 231 billion, a year-on-year increase of 2.1% [4]. - Net profit was RMB 7.47 billion, down 36.1% year-on-year; adjusted net profit decreased by 27.8% to RMB 12.86 billion [2][4]. - Gross profit for Q3 was RMB 49 billion, a decline of 3.9% year-on-year, with gross margin dropping from 22.7% to 21.4% [1][2]. - Cash, cash equivalents, and short-term investments totaled RMB 557 billion as of the end of Q3 [4]. Core Business Progress - The company faces a profit dilemma despite revenue growth, with the existing housing business being a major drag on profits. Although GTV increased by 5.8%, net income from this segment fell by 3.6% [2]. - The new housing business also showed weakness, with both GTV and revenue declining by over 13% [2]. Rental Business Highlights - The rental service emerged as a bright spot, with Q3 revenue increasing by 45.3% to RMB 57 billion, contributing over RMB 1 billion in profit for the first time in Q3 [3][4]. - However, costs in the rental business rose significantly, from RMB 38 billion to RMB 52 billion, an increase of 38.8%, indicating a scale-for-profit model [3]. - The home decoration and furniture business remained stable, with revenue of RMB 43 billion, roughly unchanged from the previous year, and profit rising from RMB 13.16 billion to RMB 13.76 billion [3].

Core Insights - Beike reported its Q3 2025 financial performance, showing a total transaction value (GTV) of 736.7 billion RMB and a net income of 23.1 billion RMB, reflecting a year-on-year growth of 2.1% [2] - The company has increased shareholder returns, with a share buyback amounting to 280 million USD in Q3, a 38.3% increase compared to the same period last year, marking a two-year high [2] - Cumulatively, Beike's buyback total has risen by 15.7% year-on-year, with approximately 2.3 billion USD repurchased since the program's initiation in September 2022, accounting for about 11.5% of the total shares before the buyback [2] Financial Performance - Beike's Q3 net income and adjusted net profit exceeded consensus expectations, with the existing home business GTV increasing by 5.8% year-on-year [3] - The new home business GTV grew by approximately 11% year-on-year, reaching 196.3 billion RMB in Q3 [3] - Rental service revenue in Q3 was 5.7 billion RMB, showing a significant year-on-year increase of 45.3% [3] Business Operations - The rental business achieved a profit margin of 8.7% in Q3, up by 4.3 percentage points year-on-year, following a break-even point at the city level in Q2 [3] - Growth in the rental business is attributed to full-process intelligent operations, with AI enhancing efficiency in various processes, leading to a 13% increase in efficiency and a 96% reduction in review time [3] - Asset managers managed an average of over 130 properties per month in Q3, compared to over 90 properties in the same period last year [3] Strategic Focus - The company is actively optimizing its business structure and enhancing technological empowerment, as stated by the CFO Xu Tao [3]

1 GTV for a given period is calculated as the total value of all transactions which the Company facilitated on the Company's platform and evidenced by signed contracts as of the end of the period, including the value of the existing home transactions, new home transactions, home renovation and furnishing and emerging and other services (excluding home rental services), and including transactions that are contracted but pending closing at the end of the relevant period. For the avoidance of doubt, for transa ...

Core Insights - Beike (NYSE: BEKE; HKEX: 2423) reported a resilient performance in Q3, with a total transaction value (GTV) of 736.7 billion RMB and a net income growth of 2.1% year-on-year to 23.1 billion RMB [1] - The company aims to enhance operational efficiency and customer experience through organizational upgrades and technological innovations, with a focus on AI integration in core business scenarios [1][3] Financial Performance - Q3 GTV reached 736.7 billion RMB, with net income of 23.1 billion RMB and a net profit of 747 million RMB [1] - Adjusted net profit for the quarter was 1.286 billion RMB, indicating a stable business foundation [1] - Operating expenses decreased by 1.8% year-on-year and 6.7% quarter-on-quarter to 4.3 billion RMB [1] Business Segments - Non-real estate business revenue share increased to 45%, contributing to the company's resilience against market cycles [1] - The existing home business GTV was 505.6 billion RMB, up 5.8% year-on-year, with improved agent performance following the "tenant separation" pilot in Shanghai [1] - New home business GTV for Q3 was 196.3 billion RMB, with an 11% year-on-year growth for the first three quarters [2] Home Decoration and Rental Services - Home decoration and furnishing business generated 4.3 billion RMB in revenue, with a profit margin of 32%, up 0.8 percentage points year-on-year [2] - Rental service revenue reached 5.7 billion RMB in Q3, a 45.3% increase year-on-year, achieving profitability before overhead allocation [2] AI Integration and Efficiency - R&D expenses totaled 1.865 billion RMB for the first three quarters, with Q3 expenses at 648 million RMB, a 13.2% increase year-on-year [3] - AI tools have been implemented across the rental business, enhancing efficiency and reducing costs significantly [3] - The AI assistant "Lai Ke" has been adopted by 414,000 agents, improving client conversion rates [3] Service Innovations - The company launched the "True Guarantee" service system in Q3, ensuring authenticity in property transactions [4] - The "Renovation Fund Custody" service has been implemented in over 30 cities, benefiting more than 20,000 families [4] - A new feature for direct payment of rent using housing provident funds has been introduced in cities like Beijing and Jinan, aiding young renters [4]

Core Viewpoint - The article emphasizes the significance of Beike's "cancellation-based repurchase" strategy, which is seen as a more advanced form of shareholder return compared to traditional stock buybacks, especially in the context of the current market environment and the company's robust financial performance [4][18][23]. Group 1: Market Performance and Support - The Hong Kong stock market has shown strong performance in 2023, with the Hang Seng Index up over 29% and the Hang Seng Tech Index up over 30% as of November 4 [3]. - A major driver of this performance has been the substantial inflow of southbound funds, totaling over 1.27 trillion HKD, marking a historical high for annual net inflows [3][4]. - Additionally, 239 Hong Kong-listed companies have engaged in stock buybacks, with a total repurchase amount reaching 1,461.89 billion HKD, contributing to market confidence [4]. Group 2: Beike's Financial Performance - Beike's Q3 2025 results reflect a resilient business model, with a total transaction volume (GTV) of 7,367 billion RMB and a net income of 231 billion RMB, showing a year-on-year growth of 2.1% [6]. - The adjusted net profit for Q3 was 12.86 billion RMB, exceeding Bloomberg's consensus estimates [6]. - The company's non-real estate transaction business has seen a historic increase in revenue contribution, reaching 45% of total revenue, indicating successful diversification [6]. Group 3: Business Segments and Growth - The home decoration and furnishing segment generated 43 billion RMB in Q3, with a profit margin of 32% [7]. - The rental service segment experienced significant growth, with revenues of 57 billion RMB, a year-on-year increase of 45.3%, and a profit margin of 8.7% [8]. - Beike's existing home business GTV reached 5,056 billion RMB, a 5.8% increase year-on-year, while new home business GTV was 1,963 billion RMB [9]. Group 4: Cost Control and R&D Investment - Beike demonstrated effective cost control, with operating expenses in Q3 at 43 billion RMB, down 1.8% year-on-year [9]. - The company increased its R&D investment to 6.48 billion RMB in Q3, a 13.2% year-on-year rise, indicating a commitment to innovation [11]. Group 5: Stock Buyback Strategy - Beike's stock buyback in Q3 amounted to 280 million USD, a 38.3% increase year-on-year, marking the highest quarterly buyback in nearly two years [13]. - The total buyback amount for 2025 has increased by 15.7% compared to the same period last year, positioning Beike as one of the top companies in terms of buyback strength in the Hong Kong market [13]. - Since initiating its buyback program in September 2022, Beike has repurchased approximately 2.3 billion USD worth of shares, representing about 11.5% of its total share capital prior to the program [15]. Group 6: Shareholder Value and Market Perception - The management's decision to utilize significant cash reserves for stock buybacks signals a belief that the company's stock is undervalued and reflects confidence in future growth and profitability [16]. - Beike's cancellation-based repurchase strategy is viewed as a more effective way to enhance shareholder value compared to traditional buybacks, as it permanently reduces the total share count [18][20]. - This strategy has attracted long-term institutional investors, including notable firms like Norges Bank Investment Management and Temasek, indicating a positive market perception of Beike's commitment to shareholder returns [21][22].

Core Insights - Beike reported a total transaction volume (GTV) of 736.7 billion yuan in Q3 2025, with net revenue reaching 23.1 billion yuan, reflecting a year-on-year growth of 2.1% [1][2] - The company's non-real estate transaction revenue proportion increased to 45%, indicating a healthy development of its platform ecosystem [1] - Beike's net income and adjusted net profit exceeded consensus expectations, showcasing strong financial performance [1] Group 1: Real Estate Transactions - The existing home business GTV increased by 5.8% year-on-year, with a rising share of non-Lianjia existing home transactions [1] - New home business GTV grew approximately 11% year-on-year, reaching 196.3 billion yuan in Q3 [1] - Beike is piloting a "B+" product light operation model to expand its reach into lower-tier cities, aiming for future growth [1] Group 2: Home Decoration and Rental Services - The home decoration and furnishing business generated net revenue of 4.3 billion yuan, with a profit margin increase to 32%, up 0.8 percentage points year-on-year [2] - The rental service revenue reached 5.7 billion yuan in Q3, marking a year-on-year growth of 45.3% [2] - The rental business achieved a profit margin of 8.7% in Q3, up 4.3 percentage points year-on-year, following a break-even point in the previous quarter [2] Group 3: Strategic Transformation - The company is exploring new real estate models in the current market cycle, achieving stable operational results through diversified business layouts [2]

Core Viewpoint - Beike Holdings reported its Q3 2025 financial results, showing a slight increase in net revenue but a significant decline in net profit compared to the previous year [1][4]. Financial Performance - In Q3 2025, Beike's net revenue was 23.1 billion RMB, a year-on-year increase of 2.1% [4]. - The net profit for the same period was 747 million RMB, reflecting a year-on-year decrease of 36.1% [1][4]. - Adjusted net profit was 1.286 billion RMB, down 27.8% year-on-year [1]. Transaction Volume - The total transaction volume for Q3 2025 was 736.7 billion RMB, remaining stable year-on-year [4]. - The transaction volume for existing homes was 505.6 billion RMB, an increase of 5.8% year-on-year [4]. - New home transaction volume was 196.3 billion RMB, a decrease of 13.7% year-on-year [4]. Revenue Breakdown - Revenue from existing home business was 6 billion RMB, down 3.6% year-on-year, with commission income at 4.8 billion RMB [4]. - Revenue from new home business was 6.6 billion RMB, down 14.1% year-on-year [4]. - Revenue from home rental services increased significantly to 5.7 billion RMB, a growth of 45.3% year-on-year [4]. - Non-real estate business revenue accounted for 45% of total revenue in this quarter [4]. Gross Profit and Margin - Gross profit for Q3 2025 was 4.9 billion RMB, a decline of 3.9% year-on-year [5]. - Gross margin decreased from 22.7% in the same period last year to 21.4% in Q3 2025 [5]. Operational Metrics - As of September 30, 2025, the number of stores was 61,393, an increase of 27.3% year-on-year [6]. - The number of active agents was 545,511, up 14.5% year-on-year [6]. - Monthly active users averaged 49.3 million, an increase from 46.2 million in the previous year [6]. Cost Structure - Total operating costs for Q3 2025 were 18.1 billion RMB, an increase of 3.8% year-on-year [6]. - Costs associated with rental services rose significantly to 5.2 billion RMB, a 38.8% increase year-on-year [6]. Cash Position - As of September 30, 2025, the company had a total cash and cash equivalents balance of 55.7 billion RMB [7].

Financial Performance and Key Metrics - In Q3 2025, the total Gross Transaction Value (GTV) was RMB 736.7 billion, remaining flat year-over-year. Total revenues reached RMB 23.1 billion, up 2.1% year-over-year [5] - Gross margin declined by 1.3 percentage points year-over-year to 21.4%. GAAP net income was RMB 747 million, down 36.1% year-over-year, while non-GAAP net income was RMB 1.29 billion, down 27.8% year-over-year [6][16] - The company generated net operating cash inflow of RMB 851 million in Q3, with total cash liquidity around RMB 70 billion [17] Business Segment Performance - Revenue from in-home transactions reached RMB 6 billion in Q3, down 3.6% year-over-year, while GTV was RMB 505.6 billion, up 5.8% year-over-year [7] - Revenue from new home transactions was RMB 6.6 billion in Q3, decreasing by 14.1% year-over-year. The contribution margin from new home transaction services was 24.1%, down by 0.7 percentage points year-over-year [9] - Revenue from home renovation and furniture services was RMB 4.3 billion, remaining relatively flat year-over-year, with a contribution margin of 32%, up 0.8 percentage points year-over-year [10] - Home rental services revenue reached a record high of RMB 5.7 billion in Q3, up 45.3% year-over-year, with a contribution margin of 8.7%, up 4.3 percentage points year-over-year [11][13] Market Data and Key Indicators - The company had over 660,000 rental units under management by the end of Q3, compared to over 370,000 in the same period of 2024 [12] - The average market coverage in Shanghai hit a record high in Q3, increasing 1.2 percentage points year-over-year [24] Company Strategy and Industry Competition - The company is shifting its growth engine from scale to efficiency, focusing on enhancing operational efficiency through AI technology [20] - The strategic rationale includes deepening operational capabilities in home renovation and expanding into second and third-tier cities, where the market presents significant growth potential [53][54] - The company is piloting lighter product offerings in lower-tier cities to tap into additional market opportunities [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the new home business despite near-term market volatility, citing a shift to a more growth-driven strategy [37] - The company aims to enhance service capabilities and improve operational efficiency, with a focus on AI integration across business scenarios [34][67] Other Important Information - The company spent approximately $281 million on share repurchase during Q3, with a cumulative amount of around $675 million in 2025, up 15.7% year-over-year [17][18] - The company has implemented various cost control measures, resulting in a notable decline in labor costs and improved operational efficiency across business lines [60][62] Q&A Session Summary Question: What is the outlook for the new home business? - Management acknowledged that while near-term performance has been affected by market volatility, they remain confident in the long-term growth potential, citing improved brokerage penetration and collaborative projects [37][39] Question: How did the leasing service business turn losses into profits? - Management attributed the improvement to economies of scale, rapid growth in revenue, and operational efficiency enhancements, resulting in a significant increase in contribution profit [45][46] Question: What is the strategy for the renovation business in cities outside of Beijing and Shanghai? - Management highlighted the importance of the home renovation market in second and third-tier cities and emphasized a conservative approach until operational capabilities are matured [53][55]

Financial Data and Key Metrics Changes - In Q3 2025, the total GTV was RMB 736.7 billion, remaining flat year over year, while total revenues reached RMB 23.1 billion, up 2.1% year over year [5] - Gross margin declined by 1.3 percentage points year over year to 21.4%, and GAAP net income was RMB 747 million, down 36.1% year over year [6][14] - Non-GAAP net income was RMB 1.29 billion, down 27.8% year over year [16] Business Line Data and Key Metrics Changes - Revenue from in-home transactions was RMB 6 billion in Q3, down 3.6% year over year, while GTV was RMB 505.6 billion, up 5.8% year over year [7] - Revenue from new home transactions was RMB 6.6 billion, decreasing by 14.1% year over year [9] - Revenue from home renovation and furniture services was RMB 4.3 billion, remaining relatively flat year over year, with a contribution margin of 32%, up 0.8 percentage points year over year [10] - Home rental services revenue reached a record high of RMB 5.7 billion, up 45.3% year over year, with a contribution margin of 8.7%, up 4.3 percentage points year over year [11][13] Market Data and Key Metrics Changes - The number of rental units under management increased to over 660,000, compared to over 370,000 in the same period of 2023 [12] - The contribution margin for home rental services improved significantly, driven by enhanced gross margin from carefully run business [13] Company Strategy and Development Direction - The company is focusing on balancing skill and efficiency, optimizing business structure, and enhancing operational efficiency through AI technology [5] - A strategic shift from scale to efficiency is being implemented, with innovative initiatives rolled out across businesses [20] - The company aims to build a residential services ecosystem, leveraging technological innovation and a well-structured operating system [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the new home business despite near-term market volatility [37] - The company is optimistic about the home rental services' profitability and plans to continue improving operational efficiency [45] - The home renovation market in second and third-tier cities is viewed as a critical long-term growth driver [53] Other Important Information - The company spent approximately $281 million on share repurchase in Q3, with a cumulative amount of approximately $675 million in 2025, up 15.7% year over year [17][18] - The company has made significant progress in optimizing its business structure and enhancing shareholder returns [18] Q&A Session Summary Question: What is the outlook for the new home business? - Management acknowledged that while the new home business has faced challenges, they remain confident in its long-term growth potential, citing market maturation and improved brokerage penetration [37][39] Question: How did the leasing service business turn losses into profits? - Management attributed the improvement to economies of scale, rapid growth in rental units, and enhanced operational efficiency, resulting in significant year-over-year revenue growth [45][46] Question: How does the company plan to motivate agents in cities outside of major markets? - Management highlighted the importance of a systematic operational framework to engage agents, including innovative incentive programs and leveraging AI to boost conversion efficiency [56][58] Question: What measures are being taken to control costs? - Management detailed various cost control measures across business lines, including labor cost reductions, supply chain integration, and operational efficiency improvements [61][62]

Financial Data and Key Metrics Changes - In Q3 2025, the total GTV was RMB 736.7 billion, remaining flat year over year. Total revenues reached RMB 23.1 billion, up 2.1% year over year [5] - Gross margin declined by 1.3 percentage points year over year to 21.4%. GAAP net income was RMB 747 million, down 36.1% year over year, while non-GAAP net income was RMB 1.29 billion, down 27.8% year over year [6][15] - The company generated net operating cash inflow of RMB 851 million in Q3, with total cash liquidity around RMB 70 billion [15][16] Business Line Data and Key Metrics Changes - Revenue from in-home transactions reached RMB 6 billion in Q3, down 3.6% year over year. GTV was RMB 505.6 billion, up 5.8% year over year [7] - Revenue from new home transactions was RMB 6.6 billion in Q3, decreasing by 14.1% year over year. The contribution margin from new home transaction services was 24.1%, down by 0.7 percentage points year over year [9] - Revenue from home renovation and furniture business was RMB 4.3 billion, remaining relatively flat year over year, with a contribution margin of 32%, up 0.8 percentage points year over year [10] - Revenue from home rental services reached a record high of RMB 5.7 billion in Q3, up 45.3% year over year, with a contribution margin of 8.7%, up 4.3 percentage points year over year [11][12] Market Data and Key Metrics Changes - The company reported a significant increase in the number of rental units under management, exceeding 660,000 by the end of Q3, compared to over 370,000 in the same period of 2023 [11] - The average market coverage in Shanghai hit a record high in Q3, increasing 1.2 percentage points year over year and 2.6 percentage points quarter over quarter [23] Company Strategy and Development Direction - The company is strategically shifting its growth engine from scale to efficiency, focusing on enhancing operational efficiency through AI technology and optimizing business structure [5][18] - The company aims to build a residential services ecosystem, leveraging technological innovation and a well-structured operating system to deliver value to customers and investors [18] - The company is piloting lighter product offerings to tap into lower-tier cities and plans to expand its B+ business to over 30 cities by the end of the year [37][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the new home business despite recent market volatility, citing a shift to a more growth-driven strategy [35] - The company highlighted the importance of operational efficiency and AI integration in driving future growth and improving service capabilities [32][60] - Management noted that the home renovation market in second and third-tier cities represents a critical long-term growth driver, with plans to expand once operational capabilities are matured [51][52] Other Important Information - The company spent approximately $281 million on share repurchase during Q3, with a cumulative amount of approximately $675 million in 2025, up 15.7% year over year [16][17] - The company has achieved significant cost reductions across various business lines, with fixed labor costs decreasing by more than 20% in existing home transaction services [60][62] Q&A Session Summary Question: What is the reason for the diminishing Alpha in the new home business? - Management indicated that the new home construction business has been affected by market volatility but remains confident in its long-term potential, citing a shift in customer preferences towards existing homes and a higher base from the previous year [35][36] Question: How did the leasing service business turn losses into operating profit? - Management attributed the improvement to economies of scale, rapid growth in rental units, and operational efficiency, with revenue from home rental services reaching RMB 5.7 billion in Q3 [42][43] Question: How does the company plan to motivate agents to sell renovation services in lower market share cities? - Management emphasized the importance of a systematic operational framework to engage agents, including innovative incentive programs and leveraging AI to boost contract conversion efficiency [50][53]