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KE Holdings Inc. Sponsored ADR Class A (BEKE)
NYSE:BEKE
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KE Holdings Inc. Sponsored ADR Class A
(NYSE:BEKE)
71Outperform
Positive Factors
Earnings
Beike’s home transaction revenue beat the estimate by RMB1b, and the adjusted profit beat by RMB0.8b, suggesting a potential upside to future quarters.
Market Share
The company has gained market share in both existing and new home transactions, showing robust business growth.
Revenue Growth
Beike's revenue increased 27% YoY to RMB22.6bn, indicating strong performance despite being slightly below estimates.
Negative Factors
Market Pricing
The expert cautioned that existing home market pricing continues to edge lower and foresees another 10% price downside before stabilizing.
Profitability
Further expansion of agent teams and continuous shift to compensation structure may continue to refrain its profitability.
Sustainability
The sustainability of the recent high transaction volume is in question as there are no signs of change in home buyers’ expectations yet.
KE Holdings Inc. Sponsored ADR Class A (BEKE) vs. S&P 500 (SPY)
Market Cap
$22.89B
Dividend Yield1.68%
Average Volume (3M)12.80M
Price to Earnings (P/E)38.3
Beta (1Y)0.75
Revenue Growth18.14%
EPS Growth-30.84%
CountryUS
Employees116,344
SectorReal Estate
Sector Strength86
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.48
Shares Outstanding1,159,236,900
10 Day Avg. Volume11,232,828
30 Day Avg. Volume12,803,828
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.31
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.16Price Target Upside48.09% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
KE Holdings Inc. Sponsored ADR Class A Business Overview & Revenue Model
Company DescriptionKE Holdings Inc. Sponsored ADR Class A (BEKE) is a leading integrated online and offline platform for housing transactions and services in China. The company operates in the real estate sector, offering a comprehensive suite of services that facilitate the buying, selling, and renting of residential properties. KE Holdings Inc. leverages technology to streamline real estate transactions and enhance customer experience through its platform, which connects homeowners, buyers, and real estate agents.
How the Company Makes MoneyKE Holdings Inc. generates revenue primarily through commission fees from real estate transactions facilitated on its platform. The company earns a percentage of the transaction value when properties are bought, sold, or rented using its services. Additionally, KE Holdings Inc. offers value-added services such as financial products, home renovation, and furnishing services, which contribute to its revenue. The company also benefits from partnerships with real estate developers and financial institutions, which help expand its service offerings and customer base.
KE Holdings Inc. Sponsored ADR Class A Financial Statement Overview
Summary
KE Holdings presents a financially sound profile with strong revenue growth and solid profitability. The company maintains a stable balance sheet with low leverage and good equity backing. Cash flows are managed effectively, though operational cash generation has declined slightly. Overall, KE Holdings is well-positioned in the real estate sector, with a positive financial trajectory.Income Statement
KE Holdings demonstrates a strong revenue growth with a significant increase from the previous year. Gross profit margin stands at 24.5%, indicating decent cost management, while the net profit margin of 4.35% shows stable profitability. However, the decline in EBIT margin from 6.17% to 4.03% suggests rising operational costs. EBITDA margin remains healthy at 5.24%, highlighting efficient cash generation capabilities.78
Positive
Balance Sheet
The company maintains a solid financial position with a debt-to-equity ratio of 0.32, indicating low leverage. Return on Equity at 5.7% reflects moderate profitability on shareholders' equity. The equity ratio is robust at 53.6%, showcasing strong asset backing by equity. Overall, the balance sheet reflects financial stability with manageable debt levels.80
Positive
Cash Flow
Operating cash flow decreased compared to the previous year, but free cash flow remained strong, indicating good cash management despite lower operating inflows. The operating cash flow to net income ratio of 2.32 suggests strong cash conversion from net income. Free cash flow to net income ratio stands at 2.32, showing efficient cash generation relative to profits. However, the negative investing cash flow suggests high capital expenditures or investments.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 93.46B | 77.78B | 60.67B | 80.75B | 70.48B | Gross Profit |
| 22.94B | 21.72B | 13.78B | 15.82B | 16.86B | EBIT |
| 3.76B | 4.80B | -1.19B | -608.16M | 1.78B | EBITDA |
| 4.90B | 9.31B | 817.87M | 762.60M | 4.25B | Net Income Common Stockholders |
| 4.06B | 5.88B | -1.40B | -524.77M | 2.78B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 52.76B | 53.89B | 54.90B | 49.85B | 56.66B | Total Assets |
| 133.15B | 120.33B | 109.35B | 100.32B | 104.30B | Total Debt |
| 22.65B | 17.99B | 12.19B | 7.51B | 7.99B | Net Debt |
| 11.21B | -1.65B | -7.22B | -12.94B | -32.98B | Total Liabilities |
| 61.70B | 48.13B | 40.29B | 33.26B | 37.50B | Stockholders Equity |
| 71.32B | 72.10B | 68.92B | 66.97B | 66.77B |
| Cash Flow | Free Cash Flow | |||
| 9.45B | 10.28B | 7.67B | 2.17B | 8.47B | Operating Cash Flow |
| 9.45B | 11.16B | 8.46B | 3.60B | 9.36B | Investing Cash Flow |
| -9.38B | -3.98B | -8.47B | -24.88B | -14.98B | Financing Cash Flow |
| -5.79B | -6.96B | -1.15B | -1.07B | 25.41B |
KE Holdings Inc. Sponsored ADR Class A Technical Analysis
Negative
18.34
Price Trends
20.36
Negative
19.23
Negative
18.01
Positive
Market Momentum
-0.15
Positive
42.31
Neutral
13.59
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BEKE, the sentiment is Negative. The current price of 18.34 is below the 20-day moving average (MA) of 20.39, below the 50-day MA of 20.36, and above the 200-day MA of 18.01, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 42.31 is Neutral, neither overbought nor oversold. The STOCH value of 13.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BEKE.
KE Holdings Inc. Sponsored ADR Class A Risk Analysis
KE Holdings Inc. Sponsored ADR Class A disclosed 95 risk factors in its most recent earnings report. KE Holdings Inc. Sponsored ADR Class A reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
KE Holdings Inc. Sponsored ADR Class A Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $33.19B | 231.54 | 1.86% | ― | 11.45% | -63.09% | |
71 Outperform | $22.89B | 38.26 | 5.66% | 1.68% | 18.14% | -30.84% | |
70 Outperform | $36.36B | 38.56 | 11.61% | ― | 11.95% | -1.25% | |
66 Neutral | $10.59B | 19.81 | 8.37% | ― | 12.87% | 142.90% | |
61 Neutral | $4.30B | 16.20 | -3.61% | 11.22% | 6.29% | -21.37% | |
58 Neutral | $1.98B | 14.33 | 7.65% | ― | -0.50% | ― | |
33 Underperform | $19.03B | ― | 40.75% | ― | ― | ― |
* Real Estate Sector Average
Performance Comparison
BEKE
KE Holdings Inc. Sponsored ADR Class A
18.08
4.15
29.79%
CBRE
CBRE Group
116.65
25.97
28.64%
CSGP
CoStar Group
75.42
-17.37
-18.72%
JLL
Jones Lang Lasalle
213.31
31.01
17.01%
CWK
Cushman & Wakefield
7.99
-1.91
-19.29%
XHG
XChange TECINC
0.36
-11.37
-96.93%
KE Holdings Inc. Sponsored ADR Class A Earnings Call Summary
Earnings Call Date: Mar 18, 2025 | % Change Since: -25.60% | Next Earnings Date: May 15, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in revenue and expansion across various business segments, particularly in home renovation and rental services. However, there were challenges with new home GTV, Q4 profit decline, and the emerging services sector. The integration of AI and substantial shareholder returns contributed positively to the sentiment.Highlights
Record Revenue and Growth
Total revenue reached a record high of RMB93.5 billion, growing over 20% year-over-year. Existing home transactions GTV rose nearly 11% year-over-year to RMB2.25 trillion.
Expansion of Agent and Store Network
The number of active stores grew by 18.3% year-over-year to nearly 49,700, and the agent count rose to 445,000, increasing 12.1% year-over-year.
Home Renovation and Furnishing Business Growth
Achieved total revenue of RMB14.8 billion for the year, a year-over-year increase of 36%. Completed renovation services for nearly 60,000 homes across more than 40 cities.
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.
AI and Technology Integration
Implemented AI tools like ChatHome and Dreamhome, improving customer experience and operational efficiency. AI Property Service Manager autonomously handles 60% of rental property management tasks.
Shareholder Returns
Repurchased around US$716 million worth of shares, accounting for around 3.9% of the Company’s total shares outstanding. Announced a final cash dividend for 2024.
Lowlights
Decline in New Home GTV
New home GTV for the year was down 3.3% year-over-year, despite a robust rebound in Q4.
Q4 Profit Decline
GAAP net income in Q4 was RMB578 million, showing a year-over-year decrease of 13.8%.
Emerging and Other Services Revenue Drop
Revenue from emerging and other services decreased by 41.1% year-over-year in Q4.
Challenges with Home Rental Market
Faced challenges with declining rents and persistent market oversupply.
Company Guidance
During the KE Holdings Inc.'s fourth quarter and fiscal year 2024 earnings call, the company provided extensive guidance on its financial performance and strategic initiatives. The company reported a total revenue of RMB93.5 billion, reflecting a year-over-year growth of over 20%. The gross transaction value (GTV) for existing home transactions reached RMB2.25 trillion, marking an 11% increase from the previous year, while new home transactions generated RMB970 billion in GTV, slightly down by 3.3% year-over-year. The number of active stores rose by 18.3% to nearly 49,700, and the agent count increased by 12.1% to 445,000. The home renovation and furnishing business achieved a 36% revenue increase to RMB14.8 billion, and the home rental services saw a 135% surge in revenue to RMB14.3 billion. The company emphasized its commitment to integrating AI into operations to enhance service quality and operational efficiency, with notable advancements in AI-driven tools and models such as ChatHome and Dreamhome. Additionally, KE Holdings announced a final cash dividend of US$0.12 per ordinary share, demonstrating its dedication to delivering shareholder value. Looking ahead, the company aims to leverage technology and human-centric strategies to drive sustainable growth and efficiency improvements across its business segments.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.