(Yicai Global) June 1 -- Shares of KE Holdings, also known as Beike Zhaofang, surged after China’s biggest real estate agent reported better-than-expected first-quarter revenue and said it plans to repurchase USD1 billion of its own shares.

KE [HKG: 2423] finished almost 13 percent higher at HKD35 (USD4.46) in Hong Kong today. Its New York-listed stock [NYSE: BEKE] climbed 16.8 percent to USD13.40 yesterday.

Revenue fell 39 percent from a year ago to CNY12.5 billion (USD1.9 billion) in the three months ended March 31, Beijing-based KE’s earnings report showed yesterday. That beat the market consensus for CNY12.2 billion. The firm made a net loss of CNY620 million (USD98 million), versus a year-earlier net profit of CNY1.1 billion (USD162 million).

KE also unveiled a plan to buy back USD1 billion of its American depositary receipts over a period of 12 months, subject to shareholder approval. Buybacks remove some of a publicly traded company’s shares from the stock market, with the aim of boosting the price.

Recent developments may also lead to a rebound in China’s housing market in the second half of this year. Covid-19 outbreaks in the country are easing along with restrictions, while local governments are loosening property market controls. The central bank has also taken steps to make it cheaper for first-time homebuyers to take out mortgages.

The drop in KE’s first-quarter revenue was mainly due to a 45 percent decline in gross transaction value to CNY586 billion, which reflected the challenges experienced by the property sector but was partially mitigated by the realtor’s commitment to quality services, according to Stanley Peng, its chairman and chief executive officer.

Along with many other businesses, KE faced much uncertainty in the quarter because of outbreaks of Covid-19 in some Chinese cities and a softening economy. For the three months through June, KE forecast a 56.6 percent to 58.6 percent slide in revenue to between CNY10 billion and CNY10.5 billion.

“There is no doubt that we are being tested this year on multiple fronts, but we are resolute in our belief that the value we bring to our customers gives us an enduring competitive advantage in both good times and tough times,” Peng said. “We are prepared to manage through this difficult phase, stay tenacious and optimistic as always, build new capabilities and emerge stronger.”

As of March 31, KE’s agent tally fell 19 percent to 427,379 from a year earlier and it had 45,777 stores, down 6 percent. Mobile monthly active users averaged 39.7 million in the first quarter, compared with 48.5 million in the same period of 2021.

Editor: Futura Costaglione