Recently, Beike, a one-stop new residential service platform, released its financial report for the first quarter of this year. During the reporting period, the total transaction volume of the company reached RMB 629.9 billion, with a net income of approximately RMB 16.4 billion and an adjusted net profit of RMB 1.392 billion.
Peng Yongdong, co-founder, chairman, and CEO of Beike, stated that in the first quarter of the past, 74 cities on the Beike platform had transaction volumes of existing houses exceeding those of local new houses. With a very high base in the first quarter of last year, it can be observed that 16 cities had year-on-year growth in transaction volumes of existing houses in the first quarter of this year. "A stable and rising existing market, as well as a new house market in the process of bottoming out, are manifestations of the accelerated transformation of China's real estate market."
As the stock housing market gradually plays a more important role, China's real estate industry is accelerating its transformation. Beike has made strategic attempts in multiple business areas with quality and efficiency as its core. By actively connecting high-quality stores in the industry, innovating store network models in directly operated brands, enhancing community roots and service capabilities, and gradually creating an entrance for one-stop residential services.
Peng Yongdong believes that in the context of the changing times, Beike embraces greater new possibilities and actively solves problems with customer experience as the core. It can be believed that these efforts will push Beike to a new level and help the company achieve sustained growth and success.
The proportion of revenue from non real estate transaction services has increased to 35%
The financial report shows that in the first quarter of this year, Beike's total transaction volume in stock housing transactions reached 453.2 billion yuan, and the total transaction volume in new housing transactions was 151.8 billion yuan.
Since the proposal of the "One Body, Three Wings" strategy, Beike has actively promoted new businesses and continuously improved the synergy between various tracks. The "one-stop new living service platform" is taking shape, and the connotation of "beautiful living" is constantly enriched. Under the premise of ensuring delivery quality, significant progress has been made in home decoration and rental business, which is becoming a new engine for the future development of Beike. In the first quarter, the total transaction volume of Beike Home Decoration and Home Furnishing business reached 3.4 billion yuan, an increase of 26.1% year-on-year; The net income of home decoration increased by 71.1% from 1.4 billion yuan in the same period of 2023 to 2.4 billion yuan in the first quarter of this year.
In addition, the net income from housing rental services is 2.6 billion yuan. The non real estate transaction service business is also growing rapidly, with revenue reaching a year-on-year increase of 112.9%, further increasing to 35%, a significant increase of 21.7 percentage points compared to the same period last year.
On April 16th, the National Bureau of Statistics released data on the national real estate market from January to March this year. The data showed that the investment in real estate development in China was 2208.2 billion yuan, a year-on-year decrease of 9.5% (calculated according to comparable standards); Among them, residential investment reached 1658.5 billion yuan, a decrease of 10.5%. During the same period, the sales area of newly-built commercial housing was 226.68 million square meters, a year-on-year decrease of 19.4%, including a 23.4% decrease in residential sales area. The sales revenue of newly-built commercial housing reached 2135.5 billion yuan, a decrease of 27.6%, including a 30.7% decrease in residential sales.
A neutral market is the foundation for a company's long-term growth. Beike deeply understands the periodicity and internal development laws of the real estate market, always adheres to a "neutral market view", objectively and calmly views market fluctuations and the relationship between itself and the market. From a neutral market perspective, short-term market fluctuations are largely influenced by the pace of demand release. In the long run, the total transaction volume and overall competition are relatively objective and neutral.
On April 30th, the central government emphasized the need to continue implementing policies tailored to the city, strengthen the responsibilities of local governments, real estate enterprises, and financial institutions, effectively carry out the work of ensuring the delivery of houses, and safeguard the legitimate rights and interests of homebuyers.
According to incomplete statistics, more than 50 cities have launched policies to support the exchange of old for new housing since the beginning of this year. The exchange of old for new housing helps promote the circulation of commercial housing, improve transaction convenience, shorten the exchange cycle, and better meet rigid and improvement needs.
With the recent introduction of multiple favorable real estate policies, both the new and second-hand housing markets in Shanghai have received positive feedback. The person in charge of Shanghai Lianjia stated that from May 18th to 19th, the transaction volume of second-hand houses in Shanghai Lianjia increased by 32.9% compared to the previous weekend, and the average increase in newly added properties compared to the weekend in April was 20%.
Positive policies in the real estate market are expected to promote stable market development
According to a research report by CITIC Securities, real estate policies are being implemented on multiple fronts, with policy objectives shifting from investment oriented to price stability oriented. With financial support and the release of purchase restrictions, it is expected that housing prices in core cities will stabilize in the middle of the year. With the relay of policies to digest existing housing, the industry's predicament is expected to gradually improve.
On May 17th this year, the State Council's regular policy briefing mainly discussed policies in four areas: guaranteed delivery, purchase of existing commercial housing, revitalization of existing land, and housing loans. According to the research report of China International Capital Corporation, the highlight lies in the collection and storage mechanism, which may effectively alleviate the cash flow risk of real estate enterprises and strengthen financial stability; The lower limit of down payment ratio has reached a historic low, while the lower limit of personal housing loan interest rate has been cancelled, and the adjustment of credit policies has exceeded expectations.
"The slope of the early market downturn has shown a marginal easing trend, and the concentrated introduction of policies in the near future is expected to accelerate the cycle operation. We predict that the current real estate cycle is expected to usher in a turning point in the 6-12 month dimension, ending the rapid adjustment that has lasted for more than three years since 2021. In the next three years, we believe that China's real estate industry will enter the stage of 'destocking and deleveraging', achieving gradual recovery of industry capacity and various activity levels while continuously preventing and securing the bottom line of financial risks." According to the research report of China International Capital Corporation.
Real estate is closely related to the economy and people's livelihoods, and market stability is crucial for economic and social development, as well as the development of the industry. Recently, there have been frequent favorable policies in the real estate market, and the market has always returned towards supply and demand, quality, and stability. As one of the housing service providers in the market, Beike undoubtedly hopes to see a stable market.
Always provide high-quality professional services
Beike has always viewed the Chinese real estate market with a long-term strategic determination, firmly believing in the medium and long-term development space of the real estate industry, and firmly believing that high-quality products and services can ultimately win market feedback.
Since the beginning of this year, in order to better embrace the new opportunities of market transformation and development, Beike has deeply insight into changes in customer needs, continuously focused on improving service quality and store efficiency, and promoted the continuous enhancement of real estate transaction service capabilities. In April of this year, "Ten Thousand" in Jining and Beike Jining Station officially integrated and launched. As of April 15th, the first batch of connected stores have been completed. In addition, Beike has issued four commitments in Shijiazhuang to address the pain points in the legal auction house transaction process, starting from consumer needs, to help service providers better provide quality services to consumers and provide additional protection for home purchases.
Beike has also taken the lead in opening leak information disclosure services in Qingdao, pre checking the situation of house leaks, so that consumers can know whether the house is leaking when viewing it, and also clarify the responsible party for the leak when transferring ownership. If there is a leak in the house, there is also insurance to claim compensation. Triple protection, making it easier for consumers to purchase second-hand houses.
In the context of choosing more yuan and a larger selection radius for home purchases, Beike focuses on building client infrastructure and business opportunity traffic, actively reaching more users. Assist brokers in better understanding customer needs, and assist in improving customer selection efficiency and experience. As of the end of the first quarter, Beike has established a large-scale real estate MCN matrix nationwide, supporting over 12000 store owners and agents, with a total fan base of nearly 36 million.
"This year is a year of investment for us. We will make more efforts in connecting our store network, training frontline service providers, iterating and upgrading product technology, upgrading quality services, and building the back-end of the second track. This puts higher demands on more efficient financial management, and we will fully support the business in allocating financial resources to help achieve long-term development." Xu Tao, Executive Director and Chief Financial Officer of Beike, said that the requirements for risk bottom line control and capital allocation efficiency will not decrease, and we will ensure that all investments will bring higher returns in the future and bring long-term value to shareholders.