• Total GTV: RMB736.8 billion, up 12.5% year-over-year.

• Net Revenue: RMB22.6 billion, representing a year-over-year increase of 26.8%.

• Gross Margin: 22.7%, declined by 4.7 percentage points year-over-year.

• GAAP Net Income: RMB1.2 billion, showing a year-over-year decrease of 0.2%.

• Non-GAAP Net Income: RMB1.8 billion, reflecting a year-over-year decrease of 17.5%.

• Existing Home Transaction GTV: RMB477.8 billion, up 8.8% year-over-year.

• New Home Transaction GTV: RMB227.6 billion, up 18.4% year-over-year.

• Home Renovation and Furnishing Revenue: RMB4.2 billion, rising by 32.6% year-over-year.

• Home Rental Services Revenue: RMB3.9 billion, up 118.4% year-over-year.

• Cash Liquidity: RMB76.3 billion, excluding customer deposit payable.

• Share Repurchase: USD784 million worth of shares repurchased this year.

• Warning! GuruFocus has detected 1 Warning Sign with BEKE.

Release Date: November 21, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• KE Holdings Inc (NYSE:BEKE) reported a 12.5% year-over-year increase in total GTV, reaching RMB736.8 billion.

• The company's new home transaction GTV increased by 18.4% year-over-year, significantly outperforming the market.

• Revenue from home renovation and furnishing services grew by 32.6% year-over-year, demonstrating strong growth in this segment.

• The number of active agents on the platform grew to over 420,000, indicating a robust expansion of the agent network.

• KE Holdings Inc (NYSE:BEKE) maintained a high level of cash liquidity at RMB76.3 billion, supporting financial stability and shareholder returns through share repurchases.

Negative Points

• Gross margin declined by 4.7 percentage points year-over-year to 22.7%, primarily due to increased fixed labor costs.

• GAAP net income decreased by 0.2% year-over-year, and non-GAAP net income fell by 17.5%, indicating pressure on profitability.

• The contribution margin from existing home transaction services decreased by 7.7 percentage points year-over-year.

• Revenue from emerging and other services decreased by 21.5% year-over-year, reflecting challenges in diversifying revenue streams.

• The home rental services business saw a decline in contribution margin due to higher commission expenses related to seasonality.

Q & A Highlights

Q: How does the management view the recent property policy changes, and what effects have been observed so far? A: (Tao Xu, CFO) The recent policy changes have led to a stronger market recovery compared to previous rounds. Transaction volumes in both existing and new home markets surged, especially in Tier 1 cities. The policies introduced a comprehensive package of countercyclical measures, which have improved market expectations and led to significant increases in transaction volumes and temporary price stabilization.