Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Insights - The company has optimized its capacity significantly, leading to a notable reduction in costs. The Q4 brokerage business has shown a marginal improvement in profit margins, while the leasing business has been profitable for the entire year, and losses in home decoration have narrowed. Future profit improvements are anticipated if policies are implemented or if the market stabilizes [2][8]. - The company reported a revenue of 94.6 billion yuan in 2025, representing a 1.2% increase, while the net profit attributable to shareholders was 2.99 billion yuan, down 26.3%. The adjusted net profit was 5.02 billion yuan, down 30.3%. In Q4 2025, revenue was 22.2 billion yuan, a decrease of 28.7%, with a net profit of 90 million yuan, down 84.6% [4][8]. - The company has a strong cash position and has executed significant share buybacks and dividends, totaling over 1.2 billion USD, resulting in a comprehensive return rate exceeding 6% [2][4]. Summary by Sections Revenue and Profitability - The company achieved a total revenue of 94.6 billion yuan in 2025, with a slight increase of 1.2%. However, the net profit attributable to shareholders decreased by 26.3% to 2.99 billion yuan, and the adjusted net profit fell by 30.3% to 5.02 billion yuan [4][8]. - In Q4 2025, the company reported a revenue of 22.2 billion yuan, down 28.7%, and a net profit of 90 million yuan, down 84.6% [4][8]. Business Performance - The company has focused on optimizing its capacity, resulting in a significant reduction in costs. The brokerage business has shown a marginal improvement in profit margins, while the leasing business has been profitable throughout the year, and losses in home decoration have decreased [2][8]. - The company’s gross transaction value (GTV) decreased by 5.0% to 3.2 trillion yuan, with the existing and new housing businesses declining by 4.2% and 8.2%, respectively [8]. Shareholder Returns - The company has declared approximately 300 million USD in dividends and has repurchased 920 million USD worth of shares, leading to a total return of about 1.2 billion USD, which is over a 9% increase year-on-year [4][8].

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company achieved a net revenue of 94.6 billion RMB in 2025, reflecting a year-on-year growth of 1.2%. However, net profit decreased by 26.7% to 2.99 billion RMB, and adjusted net profit fell by 30.4% to 5.02 billion RMB [2][9] - The total transaction volume (GTV) for 2025 was 3.1833 trillion RMB, a decline of 5.0% year-on-year. The decrease in revenue from existing and new housing was offset by growth in non-housing business revenue [9] - The company has improved operational efficiency, with operating expenses as a percentage of net revenue decreasing by 1.4 percentage points year-on-year. The company also returned approximately 12 billion RMB to shareholders through stock buybacks and dividends, an increase of over 9% year-on-year [9] Financial Summary - Revenue Forecast: - 2025: 94.58 billion RMB - 2026: 103.98 billion RMB (growth rate: 9.9%) - 2027: 115.24 billion RMB (growth rate: 10.8%) - 2028: 127.07 billion RMB (growth rate: 10.3%) [3] - Net Profit Forecast: - 2025: 2.99 billion RMB - 2026: 3.50 billion RMB (growth rate: 16.8%) - 2027: 4.10 billion RMB (growth rate: 17.3%) - 2028: 4.92 billion RMB (growth rate: 20.0%) [3] - Earnings Per Share (EPS) Forecast: - 2025: 0.85 RMB - 2026: 0.99 RMB - 2027: 1.16 RMB - 2028: 1.40 RMB [3] Business Performance - The company reported a record high in second-hand housing transaction volume, increasing by 11.2% year-on-year. The GTV for existing housing was 2.1515 trillion RMB, down 4.2%, with net revenue of 25 billion RMB, down 11.3% [9] - The new housing GTV was 890.9 billion RMB, a decrease of 8.2%, with net revenue of 30.6 billion RMB, down 9.1%, outperforming the overall industry decline of 12.6% [9] - Non-housing business profitability improved, with home decoration revenue reaching 15.4 billion RMB, up 4.4%, and rental business revenue at 21.9 billion RMB, up 52.8% [9]

Core Viewpoint - The company reported a strong revenue growth of 42.4% year-on-year in Q1 2025, reaching 23.3 billion yuan, although adjusted net profit remained stable at 1.4 billion yuan, slightly exceeding expectations [1] Group 1: Revenue and Profitability - The company's GTV (Gross Transaction Value) for Q1 2025 was 843.7 billion yuan, reflecting a year-on-year increase of 34.0%, which supported stable revenue growth [1] - Revenue from various business segments showed significant growth: second-hand housing at 6.9 billion yuan (+20.0%), new housing at 8.1 billion yuan (+64.2%), home decoration at 2.9 billion yuan (+22.3%), rental at 5.1 billion yuan (+93.8%), while emerging and other businesses generated 0.3 billion yuan (-50.0%) [1] - The company's gross margin decreased by 4.5 percentage points to 20.7%, primarily due to a lower proportion of high-margin existing housing business and an increase in fixed salary costs relative to existing housing revenue [1] Group 2: Business Segment Performance - The second-hand housing business saw a total transaction value increase of 28.1% year-on-year to 580.3 billion yuan, supported by an expanding number of active stores and agents [2] - The number of active stores reached 55,000, a 29.6% increase year-on-year, while the number of active agents grew by 49,100, representing a 23.0% increase [2] - The new housing business transaction value surged by 53.0% year-on-year to 232.2 billion yuan, with the commission rate improving by 0.2 percentage points to 3.5% [2] - The home decoration business showed steady growth, with contribution margin increasing by 2.0 percentage points to 32.6%, indicating improvements in customer experience and efficiency [2] Group 3: Future Outlook and Valuation - The company is positioned as a leading player in the domestic brokerage industry, with potential for future earnings growth driven by increased turnover rates in the second-hand housing market and higher penetration rates in new housing brokerage [3] - The adjusted net profit forecasts for 2025-2027 are 9.7 billion yuan, 11.6 billion yuan, and 13.6 billion yuan, respectively, with corresponding EPS of 1.83 yuan, 2.36 yuan, and 2.91 yuan, and adjusted PE ratios of 16.3X, 14.4X, and 12.3X [3]