BEKE(US:BEKE)2025-05-20 15:24Summary of Key Points from the Conference Call Industry Overview - The real estate market is under pressure, with a year-on-year decline in real estate development investment of 10.3% from January to April 2025, and 64 cities experiencing a month-on-month decline in April [1][3] - New housing sales area decline has narrowed, with first-tier cities' prices remaining stable, indicating a diverging market [1][3] - The industry is expected to see a gradual recovery as policies are released, with a decrease in new construction area potentially leading to reduced future new housing supply [1][4] Company Performance: Beike Zhaofang - Beike Zhaofang reported a Gross Transaction Value (GTV) of approximately 844 billion yuan in Q1 2025, a year-on-year increase of 34%, with total revenue growing by 37% [1][6] - The core business saw a growth rate of 28%, with the existing home business benefiting from an increase in market share [1][6] - The new home business GTV growth rate reached 53%, with a significant increase in market share [1][6] Home Decoration Business - Beike's home decoration business revenue growth reached 22%, with a gross margin close to 33% [1][7] - The company achieved breakeven in its home decoration business at the city level for the first time in April, attributed to an increase in the proportion of hard decoration sales and improved procurement ratios [1][7] - The collective procurement price decreased by over 20%, enhancing operational efficiency [1][7] Rental Business - The rental business of Beike Zhaofang grew by 90% year-on-year, with the number of managed properties exceeding 500,000 [1][9] - The gross margin for the rental business has further improved, indicating a solid foundation in the brokerage business [1][9] Use of AI Technology - Beike Zhaofang extensively utilizes AI technology to optimize its home decoration service processes, significantly reducing contract signing time from approximately 10 days to about 6 days [1][10] - The implementation of an intelligent construction system allows for online inspections, improving efficiency and customer satisfaction [1][10] Market Trends and Future Outlook - The home decoration industry is shifting focus from new homes to existing homes, with leading companies collaborating with custom soft decoration firms to address consumer pain points [2][13] - The existing home market is expected to grow, with Beike leveraging its traffic advantages to capture a larger market share [2][14] - The company aims to enhance operational efficiency and reduce costs, with management focusing on optimizing business performance in response to external market pressures [1][15][16] Conclusion - The real estate and home decoration industries are undergoing significant transformations, with Beike Zhaofang positioned to capitalize on these changes through strategic partnerships, technological advancements, and a focus on existing home markets [1][2][14][17]