On the evening of August 12th, real estate brokerage service platform Beike (NYSE: BEKE/02423. HK) released its mid year performance announcement.
Affected by the overall decline in sales in the real estate market, the total transaction volume of Beike platform in the first half of the year was 1.4689 trillion yuan, a decrease of 16.2% compared to the same period in 2023.
However, the home decoration and rental business continued to grow, becoming an important driver of the company's performance growth. Driven by this, Beike's net income in the first half of the year was 39.7 billion yuan, relatively unchanged year-on-year; The net profit was 2.333 billion yuan, and the adjusted net profit was 4.086 billion yuan.
Among them, the total transaction volume in the second quarter was 839 billion yuan, second only to the level of the first quarter of last year in terms of transaction performance in the past two years. Net income was 23.4 billion yuan, a year-on-year increase of 19.9%; Net profit reached 1.9 billion yuan, a year-on-year increase of 46.2%; The adjusted net profit reached 2.69 billion yuan, a year-on-year increase of 13.9%.
According to the China Business News, as of the end of the period, the total balance of Beike's cash and cash equivalents, restricted funds, and short-term investments was 59.7 billion yuan. At the same time as the mid-term performance release, Beike announced the expansion and extension of its existing share repurchase plan, with the repurchase authorization increased from $2 billion to $3 billion, and the repurchase plan period extended until August 31, 2025.
Under policy stimulus, transaction volume increased in the second quarter
According to the financial report, the total transaction volume of existing housing on Beike platform in the first half of the year was 1.0238 trillion yuan, a decrease of 8.7% compared to the same period in 2023; The total transaction volume of new houses was 387.1 billion yuan, a decrease of 32.4% compared to the same period in 2023.
It is understood that due to the high base and seasonal factors last year, the market performance in the first quarter of this year was flat. On May 17th, the People's Bank of China, in conjunction with the State Administration for Financial Regulation, launched a series of measures to stabilize the real estate market, including the cancellation of the national lower limit for housing loan interest rates, the reduction of down payment ratios for housing loans and housing provident fund loan interest rates, and the establishment of re loans for affordable housing.
Subsequently, core first and second tier cities such as Shanghai, Guangzhou, Shenzhen, and Beijing followed up on relevant regulations, and the transaction volume of the real estate market increased.
On the evening of the financial report release, Xu Tao, Executive Director and Chief Financial Officer of Beike, said, "The second-hand housing market performed well in the second quarter, especially in first tier cities and some core second tier cities, where the activity of the second-hand housing market significantly increased. The year-on-year decline in the new housing market has narrowed month by month since the second quarter, but overall it is still under pressure
According to the financial report, in the second quarter of this year, the GTV of Beike's existing housing business reached 570.7 billion yuan, a year-on-year increase of 25%. From the perspective of transactions in the past two years, this level is second only to the first quarter of last year. Net income was 7.3 billion yuan, a year-on-year increase of 14.3%. The profit margin contributed by existing housing was 47.5%, an increase of 1.9 percentage points year-on-year.
As of the end of June, the number of Shell stores was 45948, an increase of 6.9% compared to the same period last year; The number of active stores was 44423, an increase of 8.1% year-on-year; The number of brokers was 458690, an increase of 5.2% year-on-year; The number of active brokers was 411478, an increase of 0.6% year-on-year.
In terms of new houses, according to Xu Tao, "in the past, channels and developers were generally considered to be in a game with each other. However, as new houses enter the buyer's market, the difficulty of completing transactions has increased, and customer demand has also undergone significant changes. Channels have shifted from pure sales in the past to insight and analysis of customer needs in the industrial chain division of labor, working together with developers to solve the pain points of new house customers
Thanks to the increase in channel penetration rate, the deepening of strategic cooperation with developers, and the continuous improvement of systematic operational sales capabilities, the GTV of Beike's new house business reached 235.3 billion yuan in the second quarter of this year. In June, the contracted transaction amount of new houses achieved a year-on-year growth of 12%, higher than the industry performance; Net income was 7.9 billion yuan, a year-on-year decrease of only 8.8%.
It is understood that in terms of expanding cooperation in new housing channels, Beike continues to deepen its strategic cooperation with core state-owned enterprises and high-quality leading real estate companies, and improve its coverage of high-quality sources. The proportion of "fast commission" projects remains at a high level of 49%, and the commission income of state-owned enterprise developers has increased from about 47% in the second quarter of 2023 to about 55% in the second quarter of 2024. The turnover days of accounts receivable for new houses reached a historical low of 45 days. By the end of the second quarter, the total number of contracted developers for the overall strategic cooperation of Beike New House had reached 25, doubling from last year.
Beike also entered the market to acquire land against the trend of slowing down land acquisition by real estate companies. It made its debut in Beijing's land auction in March this year, participated in Guangzhou's land auction in June, and finally won two residential plots in Xi'an at a bottom price of 133.8 million yuan at the end of July.
Home decoration business aims to balance scale and quality
Faced with the current environment of the real estate sales market, Beike continues to increase its non real estate transaction service business. According to the financial report, the non real estate transaction service business revenue of Beike in the second quarter increased by 85.3% year-on-year, accounting for about 35% of the total, a significant increase of 12.2% compared to the same period last year.
Among them, the total transaction volume of home decoration and home furnishings in the first half of the year was 7.6 billion yuan, a year-on-year increase of 24%. In the second quarter, the home decoration and home furnishing business achieved a contract amount of 4.2 billion yuan, a year-on-year increase of 22.3%, a net income of 4 billion yuan, a year-on-year increase of 53.9%, and a contribution profit margin of 31.3%. The new retail contract amount, including customized furniture, soft furnishings, etc., is 1.22 billion yuan.
Co founder, Chairman, and CEO Peng Yongdong said in a conference call, "Last year, Beike achieved a breakthrough in scale without compromising on quality and reputation. It is an important threshold to let everyone know that this can be achieved. However, running too fast also means facing the risk of sacrificing service quality and customer trust
On the basis of achieving a breakthrough in scale in the home decoration business, this year, Beike will aim to establish a deeper level of trust and better achieve a balance between scale and quality.
According to Peng Yongdong, on the one hand, Beike is enhancing its ability to build one-stop integrated solutions, including the ability to provide complete integrated products, integrated delivery, service providers, and supply chain management, as well as the improvement of corresponding system infrastructure. In terms of optimizing delivery capabilities, Beike has shortened the construction period by improving dispatching efficiency and perfecting construction processes. The basic installation and main material construction period in the second quarter was about 100 days, compared to about 111 days in the same period last year.
On the other hand, Beike is also comprehensively promoting the construction of underlying digital capabilities based on Home SaaS, and pushing for the implementation of a unified standardized business model framework. It is reported that Beike has already accumulated and iterated the operational processes and rules previously validated in the Beijing market through Home SaaS 2.5, optimized and upgraded the BIM SSC platform and material performance integration capabilities. In the future, through the implementation of this system in more cities, the one-stop assembly capability will be promoted nationwide.
In the housing rental business, its net income increased by 176.7% year-on-year to approximately 5.8 billion yuan in the first half of the year. Among them, the net revenue in the second quarter was 3.2 billion yuan, a year-on-year increase of 167.1%.
As of the end of the second quarter, the number of units under management of Beike Xingxin Rental exceeded 300000, and the number of units under management of centralized long-term rental apartments exceeded 14000. According to Xu Tao, Beijing has achieved a single city break even point in the first half of the year, despite multiple pre accounting costs.