Summary of Key Points from the Conference Call Industry Overview - **Real Estate Market Trends**: The Japanese real estate market is experiencing supply contraction, demand improvement, rising costs due to inflation, and population concentration in core urban areas as key driving factors [1][4]. - **Chinese Real Estate Market Outlook**: The Chinese real estate market is expected to gradually stabilize, with conditions such as new home supply contraction and improved purchasing power. However, the recovery of income expectations and stabilization of housing prices in high-tier cities are critical [1][5]. The forecast for new home sales growth in 2026 is negative, with an investment decline of approximately 7% [1][5]. Company Insights: Beike - **Revenue Composition**: Beike's revenue is composed of approximately 60% from brokerage services and 40% from emerging businesses such as home decoration [1][6]. - **Market Position**: Beike holds a market share of 30%-50% in the existing housing market in first and second-tier cities, and over 20% in new home sales, indicating a leading position in the industry [1][6]. - **AI Integration**: The application of AI systems has enhanced the efficiency of real estate transactions, with the AI guest system covering 330,000 agents, achieving a penetration rate of 75% in Beijing and Shanghai [1][6][8]. Business Segments - **Home Decoration Business**: Beike's home decoration segment has achieved profitability since Q3, with stable profits of 8%-10% in first and second-tier cities. The company plans to increase prices by 10%-15% in 2026 and introduce high-quality soft decoration materials, potentially contributing over 8% to profits [1][7][8]. - **New Home Business Strategy**: Beike is strengthening collaborations with state-owned enterprises to enhance its new home business, which is expected to outperform the overall real estate market [1][3][10]. - **Rental Business Model**: The rental business primarily focuses on a "worry-free rental" model, utilizing a subleasing approach combined with home decoration services. This segment is expected to transition to a light asset operation model, aiming for a profit contribution of over 5% in the future [1][12][13]. Financial Projections - **Revenue Growth**: For 2025, the existing housing transaction growth is projected at around 7%, with total revenue growth of approximately 10%. Despite adjustments in the second half of the year, a total revenue growth of 7% is expected [1][14]. - **Profit Margin Expectations**: The operating profit margin is anticipated to improve significantly by 2026, with a target stock price of around 60 HKD, reflecting a positive long-term outlook despite potential short-term adjustments [1][14]. Additional Insights - **Emerging Business - Beijiaojia**: Launched in 2023, Beijiaojia is focused on providing product positioning solutions and marketing services, with plans to expand its light asset service model. It has already initiated projects in 10 cities, with significant projects expected to deliver results by 2026 [1][11]. - **Market Dynamics**: The real estate market is showing signs of structural differentiation, with opportunities in regions like Hong Kong and core urban areas of major cities expected to lead the recovery [1][5]. This summary encapsulates the essential insights from the conference call, highlighting the current state and future outlook of the real estate industry and Beike's strategic positioning within it.

Investment Rating - The report initiates coverage on Beike with a "Buy" rating and a target price of HKD 65.64, based on a 26x adjusted PE for 2026 [2][10]. Core Insights - Beike is positioned as a leading O2O real estate transaction platform in China, benefiting from supportive policies that are expected to facilitate a moderate market recovery. The company is anticipated to improve its profitability through enhanced operational efficiency and AI integration in its services [6][19]. - The real estate market is stabilizing, with signs of recovery in sales, particularly in second-hand housing, although challenges remain in new housing sales and inventory management [7][10]. - Beike's brokerage business is expected to gain market share, driven by its extensive network and the integration of third-party stores, which will enhance its revenue contribution [8][10]. Summary by Sections Business Overview - Beike has restructured into four main business lines: brokerage, home decoration, rental services, and data-driven residential development, aiming for a synergistic growth model [23]. - The company operates over 60,000 stores and employs nearly 568,000 agents, significantly outpacing competitors in terms of scale and market coverage [24][29]. Financial Projections - Revenue is projected to grow from RMB 93.46 billion in 2024 to RMB 125.93 billion by 2027, with a compound annual growth rate (CAGR) of approximately 11% [5][10]. - Adjusted net profit is expected to improve significantly, reaching RMB 9.82 billion by 2027, supported by operational leverage and a turnaround in the home decoration segment [10][21]. Market Dynamics - The real estate sector is gradually stabilizing, with government policies aimed at supporting the market. The demand for second-hand homes is expected to increase, while new home sales face ongoing pressure [7][10]. - Beike's home decoration business is projected to achieve a revenue of RMB 204 billion by 2027, with a net profit margin of around 10% [21][22]. Competitive Advantages - Beike's competitive edge lies in its channel advantages and the ACN network, which enhances transaction efficiency and transparency [19]. - The company is leveraging AI tools to improve customer experience and operational efficiency across its service offerings [20][21].

Core Insights - Beike (02423.HK) reported positive growth in total transaction volume and net income in its semi-annual report, driven by the expansion of its store network [1] - The company aims to enhance efficiency while maintaining stable growth, with a significant increase in its share buyback program from $3 billion to $5 billion, extended until August 31, 2028 [1] Group 1: Financial Performance - In the first half of 2025, Beike achieved a total transaction volume of 1.7224 trillion yuan, a year-on-year increase of 17.3% [1] - The net income for the same period was 49.3 billion yuan, reflecting a year-on-year growth of 24.1% [1] - Net profit was reported at 2.162 billion yuan, slightly down from 2.333 billion yuan in the previous year [1] Group 2: Market Dynamics - The Chinese real estate market has maintained stable housing transaction volumes, although the second quarter saw a market adjustment [1] - Beike's active store count reached 58,664, a year-on-year increase of over 32%, with active agents numbering 491,573, up over 19% [1] Group 3: Strategic Focus - Beike's CEO emphasized the need to adapt to changing consumer demands and the importance of efficiency-driven development, leveraging AI technology for productivity improvements [2] - The company is exploring various initiatives to enhance operational efficiency, including AI integration in home rental services and refining its C2M capabilities through the Beihome business segment [2] - Beike reiterated its commitment to not becoming a developer, focusing instead on a light commercial model, with limited self-operated projects [3]

Core Viewpoint - Beike-W (02423) reported a total net revenue of RMB 49.339 billion for the six months ending June 30, 2025, representing a year-on-year increase of 24.13%, while net profit attributable to Beike Holdings Limited decreased by 7.2% to RMB 2.157 billion [1] Group 1: Financial Performance - The net income for the first half of the year was RMB 49.339 billion, a 24.13% increase year-on-year [1] - Net profit attributable to Beike Holdings Limited was RMB 2.157 billion, a decrease of 7.2% year-on-year [1] - Basic earnings per share for ordinary shareholders was RMB 0.64 [1] Group 2: Business Strategy and Operations - The company is transitioning from scale-driven growth to efficiency-driven growth, leveraging AI technology and scientific management in property transaction services [2] - In the home decoration and furnishing business, the company is focusing on community cultivation and enhancing user trust and convenience through productized model homes [2] - The rental service is improving operational efficiency through product iteration and AI-driven operations [2] Group 3: Market Position and Growth - The platform's non-chain active store count increased by 36.8% year-on-year, and the number of non-chain active agents grew by nearly 24% [3] - Non-property transaction services accounted for 41% of total net revenue in the second quarter, marking a historical high [3] - The company has repurchased approximately USD 394 million in shares, representing about 1.7% of the total shares outstanding as of the end of 2024, and has increased the share repurchase authorization from USD 3 billion to USD 5 billion, extending the plan until August 31, 2028 [3]

Core Insights - The company reported a total net revenue of RMB 49.339 billion for the six months ending June 30, 2025, representing a year-on-year increase of 24.13% [1] - Net profit attributable to the company decreased by 7.2% to RMB 2.157 billion, with basic earnings per share of RMB 0.64 [1] Group 1: Business Performance - The company is transitioning from scale-driven growth to efficiency-driven growth, leveraging AI technology and scientific management in property transaction services [2] - The expansion of the company's network saw a 36.8% year-on-year increase in non-chain active stores and a nearly 24% increase in non-chain active agents [3] - Non-property transaction services accounted for 41% of total net revenue in the second quarter, marking a historical high and indicating a diversified growth pattern [3] Group 2: Strategic Initiatives - The company is enhancing its home decoration and rental services by focusing on community engagement and product iteration, aiming to improve user trust and operational efficiency [2] - The company has allocated approximately USD 394 million for share repurchases, representing about 1.7% of the total shares outstanding as of the end of 2024, and has increased the share repurchase authorization from USD 3 billion to USD 5 billion, extending the plan until August 31, 2028 [3]