KE Holdings Inc. Sponsored ADR Class A ((BEKE)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call of KE Holdings Inc. showcased a positive sentiment overall, driven by substantial growth in revenue and expansion across various business segments. The company demonstrated significant progress in home renovation and rental services, although challenges persisted in new home gross transaction value (GTV), Q4 profit decline, and the emerging services sector. The integration of AI technology and substantial shareholder returns further bolstered the positive sentiment expressed during the call.
Record Revenue and Growth
KE Holdings Inc. reported a record high total revenue of RMB93.5 billion, marking an impressive growth of over 20% year-over-year. The existing home transactions GTV also saw a notable increase of nearly 11% year-over-year, reaching RMB2.25 trillion, underscoring the company’s robust performance in the market.
Expansion of Agent and Store Network
The company expanded its network significantly, with the number of active stores growing by 18.3% year-over-year to nearly 49,700. Additionally, the agent count rose to 445,000, reflecting a 12.1% increase year-over-year, indicating a strategic focus on scaling operations to meet growing demand.
Home Renovation and Furnishing Business Growth
The home renovation and furnishing business achieved remarkable growth, with total revenue reaching RMB14.8 billion, a year-over-year increase of 36%. The company completed renovation services for nearly 60,000 homes across more than 40 cities, highlighting its expanding footprint in this sector.
Home Rental Services Surge
Revenue from home rental services surged by 135% year-over-year to RMB14.3 billion. The number of rental units under management surpassed 430,000, showcasing the company’s successful expansion in the rental market.
AI and Technology Integration
KE Holdings Inc. has made significant strides in integrating AI into its operations, with tools like ChatHome and Dreamhome enhancing customer experience and operational efficiency. The AI Property Service Manager autonomously handles 60% of rental property management tasks, reflecting the company’s commitment to technological innovation.
Shareholder Returns
The company repurchased approximately US$716 million worth of shares, accounting for around 3.9% of the total shares outstanding. Additionally, a final cash dividend for 2024 was announced, demonstrating KE Holdings’ dedication to delivering value to its shareholders.
Decline in New Home GTV
Despite a robust rebound in Q4, the new home GTV for the year was down 3.3% year-over-year. This decline highlights the challenges faced in the new home market segment.
Q4 Profit Decline
The GAAP net income in Q4 was RMB578 million, showing a year-over-year decrease of 13.8%. This decline in profit underscores some of the financial challenges the company encountered during the quarter.
Emerging and Other Services Revenue Drop
Revenue from emerging and other services decreased by 41.1% year-over-year in Q4, indicating difficulties in these newer business areas.
Challenges with Home Rental Market
KE Holdings faced challenges in the home rental market, with declining rents and persistent market oversupply posing significant hurdles.
Forward-Looking Guidance
Looking ahead, KE Holdings Inc. provided extensive guidance on its strategic initiatives and financial performance. The company aims to leverage technology and human-centric strategies to drive sustainable growth and efficiency improvements across its business segments. With a commitment to integrating AI into operations, KE Holdings is poised to enhance service quality and operational efficiency, while continuing to deliver shareholder value through dividends and strategic investments.
In conclusion, KE Holdings Inc.’s earnings call reflected a generally positive sentiment, driven by record revenue growth and strategic expansions. While challenges in certain segments were acknowledged, the company’s focus on AI integration and shareholder returns paints a promising picture for future growth and innovation.