Investment Rating - The report gives a "Buy" rating for the company, Beike-W (2423.HK), with a current stock price of HKD 49.55 [1]. Core Views - Beike is a leading integrated online and offline real estate transaction service platform, with a strong foundation in real estate brokerage and a strategic focus on three wings: home decoration, rental services, and Beihome [6][11]. - The company is expected to achieve a total transaction volume of CNY 3.3 trillion in 2024, with net revenue reaching CNY 934.6 billion, marking a historical high [6][21]. - The company emphasizes shareholder returns, with a significant cash reserve and a share buyback plan in place [28]. Summary by Sections 1. Leading Integrated Real Estate Transaction and Service Platform - Beike began operations in 2001 and has expanded its services to include second-hand and new home transactions, home decoration, and rental services [11]. - The company has established a "one body, three wings" strategy, with a projected total transaction volume of CNY 3.3 trillion in 2024 [6][11]. 2. Real Estate Brokerage: Strong Leadership and Operational Advantages - Beike holds a dominant position in the real estate brokerage industry, with a total transaction volume of CNY 3.3 trillion in 2024, significantly ahead of competitors [51]. - The company has implemented the "True Source" standard and the ACN network, enhancing service quality and operational efficiency [54]. 3. Three Wings Business: Home Decoration, Rental, and Beihome Potential - The home decoration segment is rapidly growing, with a projected transaction volume of CNY 169 billion in 2024, reflecting a CAGR of 329.7% from 2021 to 2024 [6]. - The rental business has expanded significantly, with managed properties increasing from 70,000 in 2022 to 420,000 in 2024 [6]. 4. Profit Forecast and Investment Recommendations - The report forecasts EPS of CNY 1.58, CNY 1.83, and CNY 2.11 for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 28.7, 24.8, and 21.5 [7]. - The company is expected to maintain a stable commission rate in the new home market, while the second-hand home commission rate may face pressure [6].

Core Viewpoint - Beike is the largest real estate transaction and service platform in China, transitioning from a traditional real estate service provider to a comprehensive living service provider with its "one body, three wings" strategy focusing on real estate brokerage, home decoration, and related services [3]. Group 1: Real Estate Brokerage Business - Beike has a significant advantage with its integrated online and offline platform, featuring 50,000 active stores and 445,000 active agents by the end of 2024. The platform integrates various real estate brokerage brands, enhancing its scale advantage [4]. - The company effectively addresses issues such as fake listings and price discrepancies through its "Building Dictionary" and ACN mechanism, while promoting digital transformation to improve efficiency and customer experience [4]. - The growth of the real estate brokerage business is expected to continue due to increasing turnover rates in the second-hand housing market and the company's leading market share [4]. Group 2: Home Decoration and Furniture Business - The domestic home decoration market is projected to reach approximately 3.9 trillion by 2024, characterized by high fragmentation and consumer dissatisfaction due to issues like price transparency and long delivery times [5]. - Beike leverages its real estate brokerage business to drive traffic and employs a "standardization + digitalization + full-link integration" model to enhance delivery capabilities in home decoration [5]. - Following the acquisition of Saintu Home Decoration in 2022, Beike is in a phase of scaling its operations by combining vertical management with an internet platform model [5]. Group 3: Rental and Residential Development - The "Worry-Free Rental" model focuses on sustainable profitability by improving rental efficiency and reducing vacancy periods, managing over 430,000 rental units by the end of 2024 [6]. - The "Beihome" initiative explores a new C2M residential development model, with plans to expand operations in major cities like Beijing, Shanghai, and Guangzhou in 2025 [6].

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][11]. Core Viewpoints - The company is the largest real estate transaction and service platform in China, poised to benefit from real estate recovery, with its three wings of business gradually forming a second growth curve [3][11]. - The company has launched a strategic shift from traditional real estate transactions to comprehensive living services, encapsulated in its "One Body, Three Wings" strategy [1][36]. Summary by Relevant Sections Company Overview - The company, originally founded as Beijing Lianjia in 2001, has evolved into the largest real estate transaction and service platform in China, with a significant focus on digital transformation and integration of services [1][20]. - The company has a unique dual-class share structure, with core management holding nearly half of the voting rights, ensuring strategic control [28][29]. Real Estate Brokerage Business - The brokerage business benefits from a strong online and offline integration, with 50,000 active stores and 445,000 active agents by the end of 2024 [1]. - The company has developed a robust mechanism to address issues like fake listings and price discrepancies through its "Building Dictionary" and ACN network, enhancing transaction efficiency [1][10]. Home Decoration and Furnishing Business - The home decoration market is projected to reach approximately 3.9 trillion yuan in 2024, with the company leveraging its brokerage business to drive traffic and enhance service delivery through digitalization [2][10]. - Following the acquisition of Saintu Decoration, the company is in a phase of scaling its operations through a combination of vertical management and internet platform models [2][10]. Rental and Residential Development - The rental business, centered around the "Worry-Free Rental" model, aims for sustainable profitability by improving property turnover rates and reducing vacancy periods [2][10]. - The "Beihome" initiative is being piloted in major cities, with plans for expansion in 2025 [2][10]. Profit Forecast, Valuation, and Rating - The company is expected to see a net profit of 5.77 billion, 6.69 billion, and 7.44 billion yuan from 2025 to 2027, with corresponding P/E ratios of 28, 24, and 22 [3][11]. - The report highlights the stability of the brokerage business and the high growth potential of the home decoration and rental segments as key drivers for future profitability [3][11].

Core Viewpoint - The real estate market is recovering, and with the successful implementation of the "One Body, Three Wings" strategy, the company has achieved stable performance in Q1 2025, showing significant growth in transaction volume and net income [1][5]. Group 1: Financial Performance - In Q1 2025, the company achieved a total transaction volume (GTV) of 843.7 billion RMB, a year-on-year increase of 34.0%, and net income of 23.3 billion RMB, up 42.4% year-on-year, with a net profit of 855 million RMB [1][2]. - The company's operating efficiency has improved, leading to a decrease in operating expenses to 4.2 billion RMB, down 31.3% quarter-on-quarter, and an adjusted net profit of 1.393 billion RMB [4]. Group 2: Business Segments - The core brokerage business has shown high growth, with existing home transaction volume reaching 580.3 billion RMB, a year-on-year increase of 28.1%, and new home transaction volume at 232.2 billion RMB, up 53% [2][3]. - Non-real estate transaction services have become a significant growth driver, with net income from this segment growing 46.2% year-on-year, accounting for 35.9% of total net income [3]. Group 3: Strategic Initiatives - The "One Body, Three Wings" strategy includes new home and existing home transactions as the core, with the three wings being home renovation, rental services, and the Beihome business [3][5]. - The company has invested in AI technology to enhance operational efficiency, launching tools like the AI house-hunting assistant "Pudding" and the client communication assistant "Laike" to improve user experience and transaction rates [2][3]. Group 4: Market Outlook - The company is expected to benefit from the recovery of the real estate market, with a significant increase in transaction volume and viewing numbers since the policy changes in September 2024 [5]. - The shift towards a stock market era in real estate is favorable for the company, as the proportion of existing home transactions has rapidly increased, reaching a historical high of 46% by the end of 2024 [5].

Core Viewpoint - The real estate market is entering a new phase of stabilization, and Beike has reported better-than-expected financial results amid this backdrop [2][3] Financial Performance - For the first quarter ending March 31, 2025, Beike achieved net revenue of 23.3 billion yuan, a year-on-year increase of 42.4%, with a net profit of 855 million yuan and an adjusted net profit of 1.393 billion yuan [2] - Beike's transaction volume for existing homes reached 580.3 billion yuan, up 28.1% year-on-year, while new home transaction volume grew 53% to 232.2 billion yuan, with net revenue increasing by 64.2% to 8.1 billion yuan [6] Business Strategy - Beike's "One Body, Three Wings" strategy has shown effectiveness, with non-real estate transaction services accounting for 35.9% of total net revenue, growing 46.2% year-on-year [4][9] - The company is focusing on optimizing developer partnerships and enhancing service efficiency to meet inventory clearance needs [7] Market Context - The real estate market is experiencing a shift in policy focus from preventing rapid price increases to promoting stabilization, with supportive measures being implemented by various government bodies [5] - The first quarter of 2025 saw a slight decline of 0.4% in new home sales, which is significantly better than the previous year, while the second-hand housing market showed signs of recovery [5] Operational Efficiency - Beike's active store count surpassed 55,210, marking a historical peak, with a 23% year-on-year increase in active agents, totaling 491,000 [7] - The company reported improvements in operational efficiency, with store and agent productivity increasing by 8% and 14% respectively [7] Technological Innovation - Beike is leveraging AI technology to enhance its real estate service value chain, with tools like the AI housing assistant "Pudding" and various AI products for agents [12][13] - The AI-driven solutions have significantly improved efficiency, with over 20,000 agents participating in the pilot programs, leading to a 30% increase in client conversion rates [12] Future Outlook - The company expresses confidence in its long-term growth under the "One Body, Three Wings" strategy and plans to continue investing in AI applications [15] - As the real estate market stabilizes, Beike aims to transition from scale expansion to quality growth, enhancing the overall living experience for consumers [15]

Core Viewpoint - Beike (BEKE.US) reported strong Q1 2025 financial results, exceeding market expectations, with significant growth in both existing and new home transactions, as well as rapid expansion in non-property services [1][2]. Financial Performance - In Q1 2025, Beike achieved a total transaction volume of 843.7 billion RMB, a year-on-year increase of 34%, and total revenue of 23.3 billion RMB, up 42.4% year-on-year [1]. - The existing home business generated a transaction volume of 580.3 billion RMB, a 28.1% increase year-on-year, with net income of 6.9 billion RMB, up 20.0% [2]. - The new home business saw a transaction volume of 232.2 billion RMB, a 53.0% increase year-on-year, with net income of 8.1 billion RMB, up 64.2% [2]. - Non-property services reported a net income growth of 46.2% year-on-year, accounting for 35.9% of total net income, with rental services net income reaching 5.1 billion RMB, a 93.8% increase [3]. Profitability - Beike's net profit for Q1 2025 was 0.855 billion RMB, a 97.9% increase year-on-year, while adjusted net profit was 1.393 billion RMB, remaining stable year-on-year [3]. - The gross margin decreased from 25.2% in the previous year to 20.7%, attributed to a lower contribution from the higher-margin existing home business and increased fixed salary costs [3]. Market Context - The positive performance is linked to a series of policies aimed at stabilizing the real estate market, which have led to favorable conditions in both new and second-hand home markets [3]. - Beike's CEO expressed confidence in the company's long-term growth strategy and ongoing investments in AI applications [3]. Investor Reaction - Despite the strong performance, Beike's stock fell by 5.29% to $19.16 per share on May 15, 2025, with H-shares also showing a slight decline [4]. - This negative reaction may be related to conservative guidance for Q2 2025, with expected revenue of 26 billion RMB, which is 10% lower than UBS's forecast [5]. Future Outlook - Beike anticipates a conservative growth outlook for Q2 2025, with second-hand home transaction volume expected to remain flat year-on-year and new home transaction volume projected to grow by 10% [5]. - The company expects home decoration and rental income to grow by double digits and 70% year-on-year, respectively [5].

Core Insights - Beike reported a net income of 23.3 billion yuan for Q1 2025, a year-on-year increase of 42.4%, and a net profit of 855 million yuan, up 97.9% [1] - The total transaction volume on Beike's platform reached 843.7 billion yuan, a 34.0% increase year-on-year, driven by growth in the existing housing market and improved market coverage [1] - The company aims to focus on input-output ratios and maintain a solid operational safety baseline while ensuring sustainable returns for shareholders [3] Financial Performance - In Q1 2025, Beike's existing housing business net income rose to 6.9 billion yuan, a 20.0% increase from the previous year, while new housing business net income increased by 64.2% to 8.1 billion yuan [1] - Home decoration and furniture net income grew by 22.3% to 2.9 billion yuan, attributed to increased orders from real estate transactions [2] - Rental service net income surged by 93.8% to 5.1 billion yuan, driven by the increase in rental properties under the "worry-free rental" model [2] Cost Analysis - Beike's total operating costs rose by 51.0% to 18.5 billion yuan compared to the previous year [2] - The external commission cost increased by 66.6% to 5.7 billion yuan, while internal commissions and remuneration rose by 33.1% to 4.8 billion yuan [2] - The cost of rental services saw a significant increase of 91.3% to 4.7 billion yuan [2] Market Outlook - The market performance in Q1 2025 was stable, continuing the positive impact from policy changes since September of the previous year [3] - The number of active stores and agents increased by 29.6% and 23.0% year-on-year, respectively, indicating strong market engagement [3] - Beike's CEO expressed confidence in the "one body, three wings" strategy and plans to continue investing in AI applications while being more cautious in other investments [3]

Core Insights - Beike (NYSE: BEKE; HKEX: 2423) reported strong financial performance for Q1 2025, driven by favorable policies and a dual focus on growth and efficiency [1] - The company achieved a total transaction volume (GTV) of 843.7 billion RMB, a year-on-year increase of 34.0%, with net revenue reaching 23.3 billion RMB, up 42.4% [1] - Beike's CEO expressed confidence in the company's long-term development under the "one body, three wings" strategy and emphasized ongoing investments in AI applications [1] Financial Performance - In Q1 2025, Beike's GTV for existing home business reached 580.3 billion RMB, a 28.1% increase year-on-year, while net revenue was 6.9 billion RMB, up 20.0% [1] - The new home business GTV was 232.2 billion RMB, reflecting a 53.0% year-on-year growth, with net revenue increasing by 64.2% to 8.1 billion RMB [1] - Non-property transaction services saw net revenue growth of 46.2%, accounting for 35.9% of total net revenue [2] Operational Efficiency - Beike's operating expenses for Q1 were 4.2 billion RMB, a quarter-on-quarter decrease of 31.3%, indicating improved operational efficiency [1] - Adjusted net profit for the quarter reached 1.393 billion RMB, showcasing enhanced profitability [1] Business Development - The number of active stores on the platform reached 55,210, with active agents totaling 490,862 by the end of Q1 [2] - Beike is focusing on optimizing developer partnerships and enhancing service efficiency in the new home business [2] - The home decoration and furnishing business generated net revenue of 2.9 billion RMB, a 22.3% increase, with a record profit margin of 32.6% [2] Rental Services - Rental service revenue surged to 5.1 billion RMB, a remarkable year-on-year growth of 93.8%, supported by a rapid increase in managed property scale [3] - The company managed over 500,000 rental units, with the "Worry-Free Rental" program accounting for over 490,000 units [3] - An AI assistant for rental services, "Xiao Hui," is being tested in 13 cities, achieving a 25% online resolution rate for tenant requests [3]

Core Viewpoint - The company, Beike, reported strong growth in its real estate business, particularly in the second-hand housing and rental services sectors, despite a challenging market environment [1][2]. Financial Performance - For Q1 2025, Beike's total transaction volume for second-hand housing reached 580.3 billion RMB, a year-on-year increase of 28.1% [1]. - Net income from second-hand housing business was 6.9 billion RMB, up 20% year-on-year, while net income from new housing business was 8.1 billion RMB, reflecting a significant growth of 64.2% [1][2]. - The company's total net income for Q1 2025 was 16.4 billion RMB, an increase of 3.2% compared to the previous year [1]. Business Segments - The company has shifted its strategy to "one body, three wings," integrating real estate brokerage with home decoration and rental services, and adding a new segment, Beihome [2]. - Non-real estate transaction service revenue grew by 46.2% year-on-year, accounting for 35.9% of total net income, with home decoration revenue at 2.9 billion RMB (up 22.3%) and rental service revenue at 5.1 billion RMB (up 93.8%) [2]. Profitability - Beike's gross profit increased from 4.1 billion RMB to 4.8 billion RMB, a year-on-year growth of 17%, although the gross margin decreased from 25.2% to 20.7% [3]. - The increase in operating costs was noted, with external commissions and internal salaries rising significantly, leading to a higher cost structure [3]. Cash Position - As of March 31, 2025, Beike had a total balance of cash, cash equivalents, restricted funds, and short-term investments amounting to 54.8 billion RMB [4].

Group 1 - The core financial performance of the company in Q1 2025 includes a total transaction value (GTV) of 843.7 billion RMB, a year-on-year growth of 34%, net revenue of 23.3 billion RMB, a year-on-year increase of 42.4%, and a net profit of 855 million RMB, with adjusted net profit at 1.393 billion RMB [1] - The company's "one body, three wings" strategy continues to show effectiveness, with net revenue from existing home business reaching 6.9 billion RMB, a year-on-year growth of 20%, and new home business net revenue at 8.1 billion RMB, a year-on-year increase of 64.2% [1] - As of the end of Q1, the platform had 55,210 active stores and 490,862 active agents, indicating a robust operational scale [1] Group 2 - The non-real estate transaction service revenue grew by 46.2% year-on-year, accounting for 35.9% of total net revenue, with home decoration and furniture business revenue increasing by 22.3% to 2.9 billion RMB, and rental service revenue soaring by 93.8% to 5.1 billion RMB [1] - The company has over 500,000 managed housing sources, with the "Worry-Free Rental" service managing over 490,000 units [1] - The CEO expressed confidence in the company's long-term development under the "one body, three wings" strategy and emphasized ongoing investments in AI applications to enhance customer experience and operational efficiency [2]