Core Viewpoint - Beike's performance in 2024 shows steady growth with a significant increase in platform scale and revenue, despite challenges in the new home market [2][5][10]. Financial Performance - In 2024, Beike's total GTV reached 3.35 trillion RMB, with total revenue of 93.5 billion RMB, representing over 20% growth compared to 2023 [2]. - The number of active real estate stores increased to 49,700, and active agents grew to 445,000, marking a year-on-year growth of 12.1% [3]. - The GTV for existing home transactions rose to 2.25 trillion RMB, an approximate 11% increase, setting a historical high [4]. Business Segments - New home transaction GTV was 900.17 billion RMB, a decline of 3.3%, but revenue increased by 10% [5]. - The renovation and furnishing segment generated 14.8 billion RMB in revenue, growing by 36% due to effective supply chain management [6]. - Rental services managed over 430,000 units, with revenue reaching 14.3 billion RMB, a substantial increase of 135% [7]. Market Trends - The fourth quarter of 2024 showed signs of market recovery, with new home transaction volumes increasing by approximately 15% since September 26, 2024 [8]. - New home GTV on Beike's platform in Q4 2024 saw a year-on-year growth of about 50%, indicating a strong market rebound [9]. - The proportion of existing home GTV increased from 40% in 2023 to 46% in 2024, with a notable increase in transaction volume [10]. Shareholder Returns - In Q4, Beike repurchased 132 million USD worth of shares, totaling 760 million USD for 2024, which is 3.9% of the total shares as of the end of 2023 [11]. - Cumulatively, since September 2022, Beike has repurchased shares worth 1.63 billion USD, representing 8.6% of the total shares before the buyback program [11]. Operational Efficiency - Beike has optimized operational efficiency, reducing the average construction time for home renovation projects by over 10 days compared to the previous year [12]. - The company has enhanced customer satisfaction in rental services through improved after-sales service capabilities [12][13]. Strategic Initiatives - Beike is diversifying its strategic layout and exploring new business models, focusing on customized services to mitigate decision-making risks in home buying [14]. - The company plans to limit heavy asset investments and transition towards a platform-based business model similar to SaaS [16]. Technology Investment - Beike aims to increase AI investments in 2025 to enhance foundational capabilities and accelerate the development of application iterations [17]. - The integration of advanced AI tools has led to a 5% reduction in work time and provided nearly 20% support for strategic planning [19]. Value-Added Services - The company is exploring low-frequency traffic channels and introducing value-added services like home decoration to create additional value for customers [20]. - Plans for 2025 include enhancing product strength and delivery quality while adopting a customer-centric approach [21].

Investment Rating - The report maintains a "Positive" rating for the real estate market in Hangzhou [4][6]. Core Views - The report highlights that the economic growth in Hangzhou, driven by the technology sector and a continuous net population increase, creates a favorable environment for real estate investment [3][4]. - It emphasizes that despite a weak overall market, structural opportunities exist, particularly in core first- and second-tier cities, with expectations of a supply-demand reversal and strong resilience [4][5]. Summary by Sections 1. Macroeconomic Overview - Hangzhou's GDP is projected to reach 2.2 trillion yuan in 2024, with a year-on-year growth of 4.7%, ranking 8th among major cities in China [3][13]. - The digital economy and cloud computing sectors contribute to 80% of the GDP, indicating a robust technological foundation for future growth [3][14]. - The city has seen a net population increase of 3.5 million from 2015 to 2023, with a compound annual growth rate (CAGR) of 13.1% in the core four districts [3][29]. 2. Land Market - As of January 2025, Hangzhou's inventory is at a low of 8 months, the lowest among major cities, with core districts showing even shorter cycles of 3-5 months [3][40]. - Land transaction amounts have decreased for three consecutive years, with 2024 figures showing a 34% decline year-on-year, but the core districts' share of total transactions has increased from 40%-45% to 56% [3][50]. - The top three companies in land acquisition for 2024 are Binjiang Group (32%), Greentown China (18%), and Jianfa Real Estate (16%) [3][60]. 3. Sales Performance - The report notes a recovery in market sentiment, with second-hand home transactions surpassing new homes for the first time, accounting for 65% of total sales [3][6]. - The core four districts' share of new home sales has increased from 31% in 2020 to 49% in 2023, indicating a shift in market dynamics [3][6]. - The competitive landscape remains stable, with Binjiang Group, Greentown China, and Jianfa Real Estate leading the market [3][6]. 4. Impact and Opportunities - The report anticipates that sectors such as residential development, intermediary services, and property management will benefit from the improving market conditions in Hangzhou [3][4]. - Key companies expected to benefit include Binjiang Group, Jianfa International, and Greentown China in residential development, and Beike and Wo Ai Wo Jia in intermediary services [3][4]. 5. Investment Recommendations - The report recommends focusing on residential developers like Binjiang Group, Jianfa Shares, and Greentown China, as well as property management firms like Greentown Services and Nandu Property [4][5].