BEKE(US:BEKE) HTSC·2026-03-17 02:25Investment Rating - The report maintains a "Buy" rating for the company [7][16]. Core Insights - The company reported a total revenue of 22.2 billion RMB in Q4, a year-on-year decrease of 28.7%, primarily due to a high base in 2024 [1]. - Adjusted net profit for Q4 was 520 million RMB, which was 12% lower than expected, impacted by one-time personnel optimization costs of approximately 700 million RMB [1]. - The company anticipates a 21% year-on-year decline in total revenue for Q1, but expects significant improvement in Q2 due to policy easing in Shanghai and ongoing enhancements in operational efficiency [1][5]. Revenue Breakdown - Existing Home Business: Revenue decreased by 39% year-on-year, with a GTV decline of 35% in Q4 [2]. - New Home Business: Revenue fell by 44% year-on-year, with GTV down 42% [2]. - Home Renovation: Revenue decreased by 12%, but losses narrowed to around 500 million RMB compared to 2 billion RMB in the previous year [3]. - Rental Business: Revenue increased by 18%, with a profit improvement to approximately 400 million RMB, and managed housing sources grew by 62% year-on-year [4]. Profitability and Forecast - The company has adjusted its revenue forecasts for 2026 and 2027 down by 11.7% and 10.2% respectively, mainly due to changes in rental income recognition [5][12]. - The adjusted net profit for 2026 is projected to be 6.29 billion RMB, reflecting a slight increase in adjusted net profit margin due to improved operational efficiency [12][14]. - The company aims for a revenue target of 85.8 billion RMB and an adjusted net profit of 7.66 billion RMB by 2028 [12][14]. Valuation - The target prices set for the company's stock are 21.24 USD for the US market and 55.17 HKD for the Hong Kong market, corresponding to a PE ratio of 27.3 times for 2026, which is above the global comparable company's average of 22.3 times [5][16].