Investment Rating - The report maintains a "BUY" rating for Ke Holdings (Beike), indicating a potential return of over 15% over the next 12 months [1][16]. Core Insights - Ke Holdings is expected to experience a revenue decline of 28.5% YoY in 4Q25, with anticipated revenue of RMB22.2 billion and a non-GAAP net profit of RMB427 million, resulting in a net profit margin of 1.9% [1]. - The company is well-positioned to expand its market share in the home transaction business due to its strong technological capabilities, superior service quality, and established agent cooperation network [1]. - For FY26E, the report forecasts a recovery in earnings driven by cost optimization measures and profitability improvements in new businesses, projecting a non-GAAP net profit of RMB7.0 billion, which represents a 42% YoY growth [1]. - The target price has been raised by 5% to US$21.80, reflecting a positive long-term operating cash flow outlook [1][3]. Financial Summary - For FY23A, revenue is reported at RMB77.8 billion, with a YoY growth of 28.2%. The adjusted net profit is RMB9.8 billion, showing a significant growth of 244.7% [2]. - The revenue forecast for FY25E is RMB94.6 billion, with a slight YoY growth of 1.3%, while the adjusted net profit is expected to decline to RMB4.9 billion, a decrease of 31.5% [2]. - The report projects a revenue of RMB91.5 billion for FY26E, with an adjusted net profit of RMB7.0 billion, indicating a recovery and growth trajectory [2]. Valuation Metrics - The report indicates a P/E ratio of 52.2x for FY25E, which is expected to decrease to 29.4x in FY26E and further to 22.5x in FY27E, suggesting an improving valuation as earnings recover [2][14]. - The SOTP-based valuation for Beike Core is estimated at US$20.9 per ADS, with an additional US$0.9 per ADS for Shengdu, leading to a total valuation of US$21.80 per ADS [1][12].

27 January 2026 | 6:56AM CST Equity Research CHINA PROPERTY WEEKLY WRAP Week 4 Wrap - Transactions improved across markets but leading indicators showed slowing signs Key highlights for the week: Central level: the MNR and MOHURD jointly released new measures to further support urban renewal with enhanced execution flexibility. Key points include: 1) more flexible land transition policies, whereby the original 5-year fixed transition period, during which land use and planning conditions could not be altered ...

Summary of China Property Weekly Wrap Industry Overview - The report focuses on the **Chinese property sector**, highlighting recent market activities and policy changes affecting the industry. Key Highlights 1. **Central Level Policies**: - Emphasis on stabilizing market expectations in the property sector due to housing's role as a financial asset and household wealth repository [1] - Policy easing is deemed necessary to align with market expectations and prevent speculation cycles [1] - Recent tax cuts include a reduction in VAT on properties held for less than two years from 5% to 3%, marking the first reduction since 2016 [1] 2. **Market Activity**: - Transaction volumes in the primary market decreased by **18% week-over-week (wow)** and **33% year-over-year (yoy)**, while secondary market transactions fell by **29% wow** and **27% yoy** [2] - Overall market activities softened, with secondary visitation down **9% wow** and new listing supply down **5% wow** [2] - Market sentiment remained stable, with price cuts holding at a ratio of approximately **15 times** those with price increases [2] 3. **Key Data Points**: - New home sales volume averaged **-18% wow** and **-33% yoy**; new home search activities increased by **1.5% wow** [5] - Secondary transactions averaged **-29% wow** and **-27% yoy** [5] - Inventory balance increased by **0.1% wow**, with inventory months at **28.7**, compared to an average of **28.0** in December 2025 [13] 4. **Valuation Insights**: - Stronger state-owned enterprise (SOE) developers saw share prices increase by **6% wow**, with notable performers like Jinmao (+9% wow) and Greentown (+8% wow) [25] - Offshore coverage developers traded at an average **33% discount** to end-2026 estimated net asset value (NAV) [25] - Onshore coverage developers traded at an average **13% discount** to end-2026 estimated NAV [25] 5. **Completions and New Starts**: - Completions are expected to show a **mid-single-digit percentage (MSD)** improvement in December 2025, contrasting with a **-25% to -18% yoy** decline in previous months [18] - New starts are anticipated to decline steeply, reflecting land sales trends and cement shipment ratios [18] Additional Insights - The report indicates a potential decline in home appliance sales based on secondary sales trends in approximately **20 cities** [18] - The overall market remains under pressure, with significant year-over-year declines in both new and existing home sales expected to continue into the next quarter [18] This summary encapsulates the critical aspects of the current state of the Chinese property market, including policy impacts, market activity, and valuation trends, providing a comprehensive overview for investors and stakeholders in the sector.

Company Overview - KE Holdings Inc. is a leading real estate services provider in China, utilizing technology to connect buyers, sellers, and agents through its Beike and Lianjia platforms [5] - The company operates a hybrid online-offline business model, generating revenue primarily from transaction commissions, service fees, and value-added offerings [7] - KE Holdings serves home buyers, sellers, renters, and real estate agents across China, targeting both individual consumers and institutional clients in the residential property sector [7] Financial Performance - As of the latest report, KE Holdings had a market capitalization of $18.86 billion and revenue of $14.52 billion for the trailing twelve months (TTM) [4] - The company reported net income of $549.10 million for the TTM [4] - In the third quarter, KE Holdings generated $3.2 billion in net revenue, reflecting a 2% year-over-year increase, although net income decreased by 36% year-over-year to $105 million [8] Investment Activity - Perseverance Asset Management International initiated a new position in KE Holdings, acquiring 659,849 shares valued at approximately $12.54 million [1][2] - The fund's total reportable positions include 23 holdings with $840.49 million in U.S. equity assets under management as of September 30 [2] Market Context - KE Holdings' share price was $16.22, down 12% over the past year, underperforming the S&P 500, which increased by about 15% during the same period [3] - The company ended the quarter with approximately $7.8 billion in cash and equivalents, and it repurchased $281 million of shares in the quarter, totaling about $675 million year to date, reducing its share count by roughly 3% [9] Strategic Positioning - The investment in KE Holdings reflects a focus on durable cash flow and optionality in a challenging market environment [1] - The company is seen as having a defensible position in the competitive housing market, supported by its scale and comprehensive service portfolio [5][10]

23 December 2025 | 7:14AM CST Equity Research CHINA PROPERTY WEEKLY WRAP Week 51 Wrap - Steady transaction volumes toward year-end; MTD secondary price cut pace decelerating Key highlights for the week: On the policy front, on the central level, we note authorities reiterated their focus on guiding the property sector toward a new development model, with the MOHURD emphasizing shifts from high-speed to high-quality growth, prioritizing product quality over scale expansion, and targeting a balanced, stable m ...

Company Overview - KE Holdings operates in the Chinese real estate market, utilizing a technology-driven platform that integrates online and offline housing transactions and services [5] - The company has a diversified business model that includes brokerage, property management, and ancillary services, catering to a broad customer base and multiple revenue streams [5] - KE Holdings generates revenue primarily through commissions and service fees from property transactions, brokerage services, and value-added offerings [8] Financial Performance - As of the latest report, KE Holdings has a market capitalization of $103.5 billion, with a revenue of $14.5 billion and a net income of $549 million over the trailing twelve months (TTM) [4] - In the third quarter, KE Holdings reported a revenue increase of 2.1% year over year to $3.2 billion, with net income of $105 million [9] - Existing home transactions grew by 5.8%, while rental services surged more than 45%, indicating a shift towards higher-margin, service-driven businesses [9] Investment Position - Athos Capital disclosed a new position in KE Holdings, acquiring 2.5 million shares valued at $47.5 million, making it the fund's largest position by reported value [2][3] - This new stake accounts for 29.8% of Athos Capital's 13F reportable assets under management as of September 30 [3] - The current share price of KE Holdings is $16.08, reflecting a 13% decline over the past year, contrasting with the S&P 500's 16% increase during the same period [3] Strategic Insights - The significant investment by Athos Capital suggests a belief that the current valuation of KE Holdings does not accurately reflect its earning potential [9] - KE Holdings maintains a strong balance sheet with approximately $7.8 billion in cash and short-term investments, having repurchased over $2.3 billion of stock since 2022 [10] - The company's strategy appears to focus on leveraging its transaction infrastructure to withstand housing market cycles, emphasizing the importance of scale, data, and cash flow over short-term market sentiment [10]

分组1 - The individual investor focuses on managing personal capital accumulated over the years, utilizing a diverse range of investment strategies including fundamental, technical, and momentum investing [1] - The investor aims to leverage the strengths of various investment approaches to refine their investment process [1] - The purpose of writing on Seeking Alpha is to track the performance of investment ideas and connect with like-minded investors [1]

Investment Rating - The investment rating for the company is "Buy" [4][12]. Core Views - The company reported total revenue of 23.1 billion yuan in Q3 2025, representing a year-on-year growth of 2.1%. However, net income decreased by 27.8% to 1.286 billion yuan [1][4]. - The net revenue from second-hand housing transaction services fell by 3.6% to 6 billion yuan, while new housing transaction services saw a decline of 14.1% to 6.6 billion yuan [1][4]. - The adjusted net profit for Q3 2025 was 1.286 billion yuan, reflecting a significant drop compared to the previous year [2][4]. - The company maintained a strong cash position with cash and short-term investments totaling 55.7 billion yuan, and continued share repurchases amounting to 281 million USD in Q3 [2][4]. Summary by Sections Financial Performance - Total revenue for Q3 2025 was 23.1 billion yuan, with a year-on-year increase of 2.1%. The total transaction value (GTV) was 736.7 billion yuan, remaining stable year-on-year [1][2]. - The gross margin decreased to 21.4%, down from 22.7% in the same period last year, primarily due to reduced contributions from second-hand and new housing transaction services [2][4]. - The adjusted net profit for 2025 is projected to be 5.601 billion yuan, with a decline of 22.3% expected in 2025 [11]. Future Projections - Revenue estimates for 2025, 2026, and 2027 are 93.62 billion yuan, 92.83 billion yuan, and 96.16 billion yuan, respectively [11]. - The adjusted EPS for 2025, 2026, and 2027 is forecasted to be 0.71 USD, 0.97 USD, and 1.10 USD, respectively, with corresponding P/E ratios of 23.5X, 17.2X, and 15.3X [2][11]. Market Position - The company is recognized for its leading position in the market, and its scarcity as an investment target supports the "Buy" rating [2][4].

Core Insights - KE Holdings Inc. reported third-quarter adjusted earnings that slightly exceeded analyst forecasts, with shares increasing over 2% in intra-day trading [1] - The company achieved adjusted earnings per share of RMB1.17 ($0.16), surpassing expectations of RMB1.16 [1] - Revenue increased by 2.1% year over year to RMB23.1 billion ($3.2 billion), although it fell short of the RMB23.58 billion consensus [1] Segment Performance - Existing home transaction gross transaction value (GTV) grew by 5.8% to RMB505.6 billion [2] - New home GTV declined by 13.7% to RMB196.3 billion [2] - Rental services revenue surged by 45.3% to RMB5.7 billion, indicating strong performance in this segment [2] Financial Metrics - Net income decreased by 36.1% to RMB747 million ($105 million) [2] - Adjusted net income fell by 27.8% to RMB1.29 billion ($181 million) [2] Operational Expansion - The number of active stores increased by 25.9% year over year to 59,012 [3] - Active agents rose by 11.4% to 471,501 [3] - Monthly active mobile users averaged 49.3 million, up from 46.2 million in the prior-year period [3]

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]