Core Viewpoint - The overall performance of Beike's latest earnings report is better than expected, with significant revenue growth, but the persistent issue of increasing revenue without profit remains unresolved [1][12][46]. Group 1: Existing Home Business - The GTV (Gross Transaction Value) of the existing home business increased by 28% year-on-year, outperforming the expected 24% growth, indicating the continued impact of policy benefits [1][15]. - Revenue from the existing home business grew by 20%, but this was lower than the GTV growth, reflecting a decline in the comprehensive commission rate [1][17]. - The comprehensive commission rate for existing homes decreased by 1.4 basis points to 1.18%, attributed to a higher proportion of non-self-operated business and potential commission discounts to stimulate transactions [1][17]. Group 2: New Home Business - The new home business saw a remarkable growth in transaction value, with a year-on-year increase of 53%, significantly exceeding market expectations [2][20]. - However, the revenue growth rate for new homes was lower than expected due to a decline in the comprehensive realization rate, which fell by 20 basis points [2][24]. - The new home business's revenue increased by 64% year-on-year, but the growth rate showed a deceleration compared to the previous quarter [2][24]. Group 3: Secondary Business Lines - The secondary business lines, including home decoration, rental, and home services, generated total revenue of 8.38 billion, a year-on-year increase of 39%, surpassing expectations [3][27]. - The rental business experienced a significant growth of 94% year-on-year, indicating a strong market position despite a generally weak rental market [3][29]. - The home decoration business, while improving, still underperformed expectations with a revenue growth of 22% [3][29]. Group 4: Profitability Issues - Despite revenue growth, the adjusted net profit remained nearly flat year-on-year, highlighting the ongoing issue of revenue growth not translating into profit [4][6][34]. - The overall gross profit margin decreased to 20.7%, down 2.3 percentage points from the previous quarter, primarily due to rising commission costs and a higher proportion of low-margin rental business [5][37]. - The operating profit margin fell from 3.2% to 2.5%, reflecting the challenges in maintaining profitability amidst rising costs [5][43]. Group 5: Market Outlook - The performance of Beike is significantly influenced by macroeconomic conditions in the real estate market, making future predictions challenging [12][13]. - Long-term prospects for Beike remain positive due to its dominant market position and execution capabilities, despite short-term volatility [12][13]. - Current valuation corresponds to an adjusted net profit multiple of approximately 16-17x PE, with potential for higher multiples if profit growth resumes [12][13].