Chinese Realtor KE Soars After Predicting Robust Revenue Growth in First Quarter
Zhang Yushuo
DATE:  Mar 17 2023
/ SOURCE:  Yicai
Chinese Realtor KE Soars After Predicting Robust Revenue Growth in First Quarter Chinese Realtor KE Soars After Predicting Robust Revenue Growth in First Quarter

(Yicai Global) March 17 --- Shares of KE Holdings surged after China's biggest real estate agent forecast strong revenue growth for the first three months of this year.

KE [HKG: 2423] finished 9.1 percent higher at HKD49.90 (USD6.36) in Hong Kong today, bringing this wek’s gain to 11.4 percent. In trading before the market open in New York, the company’s stock [NYSE: BEKE] was up 4.1 percent at USD18.86 as of 7.34 a.m. local time, after jumping 5.2 percent yesterday.

Revenue may climb by 43 percent to 47 percent to between CNY18 billion and CNY18.5 billion (USD2.61 billion and USD2.69 billion) in the quarter ending March 31 from a year ago, the Beijing-based company said in an earnings report released yesterday.

“This forecast considers the potential impact of [China’s] recent real estate related policies and measures, all of which remain uncertain and may continue to affect the company’s operations,” KE said. “The company’s ongoing and preliminary view are contingent on the business situation and market condition.”

In the three months ended Dec. 31, revenue fell 5.8 percent to CNY16.7 billion, compared with an annual decline of 25 percent to CNY60.7 billion (USD8.8 billion) in 2022, the report showed.

“We proved our more stable profitability,” said KE founder and Chairman Stanley Peng. Last year, the number of gross transactions of existing homes fell 31 percent from 2021, and sales of the top 100 new home developers dropped 42 percent, he added.

Fourth-quarter net profit at KE, also known as Beike Zhaofang, was CNY372 million (USD54.1 million), compared with a net loss of CNY933 million a year earlier. Its gross transaction value was USD93.8 billion, down 11.7 percent. 

The firm’s annual net loss widened 166 percent to CNY1.4 billion (USD201.7 million), while GTV plunged 32 percent to CNY2.6 billion. Store numbers fell 21 percent to 40,516 as of the end of last year.

“The market has been in a downward trend since the middle of 2021,” Peng noted. “But through it all, we've always believed that consumers' desire for better living will not change, and the market will return to a normalized level. We also see opportunities in the market recovery.”

The market for existing homes will likely grow over 15 percent this year, with prices remaining relatively stable, Executive Director and Chief Financial Officer Xu Tao said. The firm expects new home GTV to remain flat this year, Xu added.

Editor: Martin Kadiev

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Keywords:   property,Beike,Ke Holdings