Beike's total transaction volume increased 65.8% to RMB 971.5 billion in the first quarter of 2023 due to the release of backlogged housing demand and improved housing market expectations after the epidemic eased against the backdrop of macroeconomic recovery and successive supportive policies, as well as the expansion of Beike's home improvement and home furnishing business.
KE Holdings Inc. (hereinafter referred to as “Beike”, Chinese: 贝壳, NYSE: BEKE, HKEX: 2423), headquartered in Beijing, recently released its 2023 first quarterly report. In Q1 2023, Beike achieved a total gross transaction value (GTV) of CNY 971.5 billion (USD 138.21 billion), up 65.8% year-on-year; revenue of CNY 20.3 billion, an increase of 61.6% from the same period last year; gross margin of 31.3%; and net profit of CNY 2.75 billion, a turnaround.
Founded in 2017, Beike is the world's leading integrated online and offline platform for housing transactions and services. The company is mainly engaged in services including the provision of second-hand and new home transactions, housing leasing, home renovation & furnishing, as well as other real estate transactions and residences. Beike's three main businesses are existing home transactions, new housing business, and home renovation & furnishing business. According to the quarterly financial report, the GTV of Beike's existing home business reached CNY 664.3 billion, up 78% year-on-year; the GTV of new housing business reached CNY 277.9 billion, up 44% over the previous year; the GTV of home renovation & furnishing business reached CNY 2.7 billion, 108% higher than in the previous year; and the company's housing volume under management exceeded 160,000 units at the end of Q1 2023.
Beike attaches great importance to internationalization strategy. In 2018, Beike Overseas entered into a strategic partnership with Ellington, a premium developer from Dubai, for Beike Overseas to launch a Dubai channel and showcase Ellington's multiple high-end real estate projects. There are currently 12 country channels available on Beike Overseas' website, including those for the United States, Australia, Canada, Japan, the United Kingdom, Thailand, Germany, France, Singapore, South Korea, and the United Arab Emirates, where users can look for pre-owned and brand-new housing options, as well as buying and renting guides, on the respective country's homepage. Additionally, the company actively practices the UN Sustainable Development Goals and ESG concept. In 2022, Beike's paperless business model encompassed a wide range of use cases, including online real estate valuation, loan disbursement, and notarization, resulting in annual savings of approximately 68 million sheets of paper.
According to leading global financial information provider Zhitong Financial, Beike's share of the real estate brokerage market was 9.7%, while the combined market share of the top five real estate brokerage companies was only 14.6% during the same period.
The major competitors of Beike include Chinese companies such as Centaline Property (Chinese: 中原地产), 5i5j (Chinese: 我爱我家), as well as international players such as RE/MAX and Forest City Enterprises from the US.
Based on industry trends, Peng Yongdong, co-founder and CEO of Beike, has mentioned that "digital space" will be the future trend, such as 8K LIDAR scanning technology, AI design products, remote supervision of the renovation process, etc. “In this modern time, the role of technology has not superseded that of the service provider. In the next five to ten years, service providers in China's industry who adapt their capabilities to incorporate new digital tools and quality service concepts will be in high demand and establish themselves as distinguished brands.”
As of press time, Beike closed at USD 14.82 apiece, with a market cap of USD 18.71 billion.