KE Holdings (BEKE) Conference Call Summary Company Overview - **Company**: KE Holdings (BEKE) - **Market Cap**: $21.1 billion - **Enterprise Value**: $10.5 billion - **12-Month Price Target**: $21.40 (current price: $18.01, upside: 18.8%) [1][5] Key Financial Forecasts - **3Q25 Revenue Forecast**: Rmb 23.8 billion (2% above consensus) [1] - **3Q25 Non-GAAP Net Profit Forecast**: Rmb 1.3 billion (5% above consensus) [1] - **4Q25 Revenue Forecast**: Expected decline of 15% YoY to Rmb 26.5 billion [23] - **2025 Revenue Growth**: Total revenue expected to reach Rmb 99.64 billion [15] Core Insights - **New Home GTV**: Expected to decline by 8% YoY, but better than consensus [1] - **Existing Home GTV**: Expected to grow by 5% YoY, indicating a positive trend [1] - **Cost Reduction**: Fixed costs are being reduced through agent optimization, following a 6% QoQ decline in agent count [1] - **Profitability of New Initiatives**: Home renovation and rental services projected to generate Rmb 150 million operating profit in 3Q25, a significant improvement from a loss of Rmb 250 million in 3Q24 [1] Market Dynamics - **Government Support**: Recent supportive policies from provincial and municipal governments have stabilized the property market, including home purchase subsidies and easing restrictions [2] - **Transaction Trends**: 15 out of 43 tracked cities saw an increase in existing home transaction average selling price (ASP) month-over-month in September [2] - **Cautious Outlook for 4Q25**: Anticipated revenue and GTV declines due to high base effects from the previous year [2] Strategic Initiatives - **Service Upgrades**: KE Holdings has upgraded its service standards to enhance transaction security and efficiency, which is expected to drive market share gains [18] - **Community-Focused Strategy**: The company is shifting its home renovation business model to a community-focused approach, optimizing store formats to improve efficiency [18] Investment Considerations - **Share Buybacks**: KE has repurchased $281 million in 3Q25, totaling approximately $700 million year-to-date, which is equivalent to 3.2% of its market cap [19] - **Long-Term Growth**: New initiatives are expected to account for 47% of total revenue by 2027, up from 34% in 2024 [27] Financial Ratios and Valuation - **P/E Ratio**: Expected to be 22.3x in 2025 [12] - **Dividend Yield**: Projected at 2.1% for 2025 [12] - **Free Cash Flow Yield**: Expected to be 5.1% in 2025 [12] Conclusion - **Investment Rating**: Maintain "Buy" rating based on strong performance in new home GTV, cost reduction strategies, and profitability improvements in new initiatives [1][19]