Core Viewpoint - The report from GF Securities assigns a target valuation for Beike-W (02423) based on mainstream internet platforms, projecting a total reasonable value of RMB 182.4 billion for 2026, corresponding to HKD 58.37 per share and USD 22.45 per share, maintaining a "Buy" rating [1] Group 1: Market Performance - The second-hand market shows stable volume and price, positively impacting Beike's performance. In the first 18 days of January 2026, second-hand subscription transactions in 79 cities increased by 33% year-on-year, leading to an annualized second-hand transaction volume of 860 million square meters, a 24% increase compared to 2025 [2] - The contribution from first and second-tier cities to Beike's existing housing business GTV remains over 80%, with key cities like Beijing, Shanghai, and Hangzhou contributing 37% in 2025. Beike's market share is steadily increasing, projected at 32% for 2025, with a 1 percentage point growth [4] Group 2: Financial Projections - The existing cost increase is expected to pressure Beike's performance in 2025, with an estimated GTV of RMB 2.1 trillion, a 6% decrease year-on-year, and a projected net profit of RMB 5.5 billion, down 24% year-on-year [3] - For 2026, the company conducted a sensitivity analysis under three scenarios: - Optimistic: 15% increase in transaction volume, stable prices, leading to a net profit of RMB 8.7 billion, a 59% increase year-on-year [5] - Neutral: 5% increase in transaction volume, 5% decrease in prices, resulting in a net profit of RMB 7.3 billion, a 33% increase year-on-year [5] - Pessimistic: 4% decrease in transaction volume, 10% decrease in prices, leading to a net profit of RMB 6 billion, a 10% increase year-on-year [5]

Investment Rating - The report maintains a "Buy" rating for the company, Beike (BEKE), with a target price of HKD 58.37 for the Hong Kong stock and USD 22.45 for the US stock based on a 18x adjusted PE for 2026 [9]. Core Insights - The report highlights that the second-hand housing market is stabilizing, which positively impacts Beike's performance. In January 2026, the number of second-hand housing transactions in 79 cities increased by 33% year-on-year, indicating a potential rebound in the market [9][15]. - Beike's market share remains stable and is expected to grow, with a market share of 32% in 2025, up 1 percentage point from 2024. The company is well-positioned to benefit from market recovery in core cities [9][54]. - The report provides a sensitivity analysis for Beike's performance under different market scenarios for 2026, indicating a high confidence in earnings recovery driven by cost reduction and market improvement [9][64]. Summary by Sections 1. Market Stability and Performance Impact - The total residential transaction volume in 2025 was 1.4 billion square meters, down 5% year-on-year, but showed signs of stabilization when excluding policy effects from Q4 2024. The second-hand market accounted for 47% of this volume, marking a continuous increase over four years [13][14]. - In early 2026, the annualized second-hand transaction volume is projected to be 860 million square meters, a 24% increase from 2025, suggesting a strong start to the year [15][18]. 2. Core Business Resilience and Market Share Growth - Beike's estimated gross transaction value (GTV) for 2025 is projected at RMB 2.1 trillion, a decrease of 6% year-on-year, with Q4 2025 GTV expected to be RMB 432.3 billion, down 42% [20][29]. - The company has a long-term strategy focused on enhancing operational capabilities, with a significant portion of GTV (over 80%) coming from first and second-tier cities, which are expected to show market elasticity during recovery phases [39][42]. - Beike's market share in 2025 is estimated at 32%, with a stable growth trajectory despite market challenges, indicating strong defensive capabilities [54][62]. 3. Earnings Forecast and Valuation - The report outlines three scenarios for Beike's earnings in 2026: optimistic, neutral, and pessimistic, with expected adjusted net profits of RMB 87 billion, RMB 73 billion, and RMB 60 billion respectively, reflecting year-on-year growth rates of 59%, 33%, and 10% [67][71]. - The valuation is based on a general cash flow approach and adjusted PE method, with a target price reflecting the company's potential in a recovering market [9][64].

Core Viewpoint - The article discusses the ongoing rice crisis in Japan, highlighting the impact of government policies, climate change, and market dynamics on rice production and pricing. Group 1: Rice Production and Pricing - Japan's rice consumption heavily relies on domestic production, with only 100,000 tons allowed for duty-free import, constituting about 1% of total consumption [1] - Despite government intervention by releasing 300,000 tons of reserve rice, retail prices have doubled compared to last year [1] - The rice crisis is attributed to a combination of rare high temperatures in 2023 leading to poor harvests and increased demand from international tourists [2] Group 2: Government Policies and Historical Context - Japan's long-standing policies have restricted rice production, leading to a lack of market elasticity [2] - The "Reduction Policy" initiated in the 1970s aimed to stabilize rice prices by limiting the area for rice cultivation, which has continued to influence production decisions [4][6] - The abolition of the "Reduction Policy" in 2018 did not eliminate government support for reduced rice planting, indicating a continuation of restrictive practices [6] Group 3: Agricultural Structure and Challenges - Japan's agricultural sector is characterized by smallholder farms rather than large agricultural groups, relying on the Japan Agricultural Cooperatives (JA) for support [7] - The complex supply chain, where rice is collected by cooperatives before reaching retailers, has contributed to market inefficiencies [7] - The aging farming population, with an average age of 69, and a significant decline in agricultural workforce pose challenges for increasing rice production [8] Group 4: Potential Solutions and Future Outlook - The Japanese government is exploring options to alleviate the rice crisis, including relaxing import restrictions and directly contracting with large retailers [9] - The rice crisis reflects the broader struggle between protecting traditional agriculture and adapting to market changes in a globalized economy [11]