BEKE(US:BEKE) HTSC·2026-03-08 10:30Investment Rating - The report maintains a "Buy" rating for the company [8][15]. Core Views - The company is expected to experience a 27% year-on-year decline in revenue for Q4 2025, amounting to 22.8 billion RMB, with significant declines in existing homes, new homes, home decoration, and rental income [1]. - Adjusted net profit is projected to decrease by 64% year-on-year to 4.8 billion RMB for Q4 2025, leading to a downward revision of revenue and profit forecasts due to a slowdown in the real estate industry's recovery [1]. - The company anticipates marginal improvement in its brokerage business in Q1 2026, driven by a decrease in second-hand housing listings, which may alleviate downward pressure on housing prices [1]. - For 2026, the company expects a market share expansion of 1-2.5 percentage points in its brokerage business, with significant profit margin recovery through personnel optimization and targeted marketing strategies [1][3]. Revenue and Profit Forecasts - Revenue forecasts for 2025-2027 have been adjusted to +0.1%/-6.2%/-9.6%, primarily due to limited upside in the brokerage business's take rate and a slight slowdown in market share expansion [11]. - Adjusted net profit estimates for 2025-2027 have been reduced by 12.9%/14.3%/20.9% to 5.02 billion RMB, 6.3 billion RMB, and 7.39 billion RMB respectively, reflecting increased personnel optimization costs and revenue adjustments [11][13]. Business Segment Insights - The existing home and new home revenue is expected to decline by 34% and 37% year-on-year respectively for Q4 2025, while the rental business is projected to see a smaller decline of 2% [3]. - The rental business is expected to show resilience, with a projected increase in the number of rental units by 200,000 to 300,000 in 2026, which may enhance profit contributions [4]. - The home decoration segment is undergoing structural adjustments, with a focus on optimizing store structures and reallocating personnel from brokerage to decoration services to improve efficiency [5]. Valuation - The target prices for the company's US and Hong Kong stocks are set at 21.85 USD and 56.07 HKD respectively, corresponding to a 27.8 times PE ratio for 2026, which is above the global comparable company's average of 22.8 times PE [15][16].