BEKE-W (02423) has continued its upward momentum, surging more than 5% in early trading on Monday. As of the time of writing, the stock was up 5.42% to HK$48.20, with trading turnover reaching HK$360 million.

The rally comes after the company released its second-quarter earnings, which showed net revenue of RMB 24.5 billion, with adjusted operating profit reaching RMB 3.59 billion. The adjusted operating profit margin stood at 14.6%, representing a significant year-on-year improvement of 8.5 percentage points.

KE Holdings Inc. also reported strong operational metrics, with second-hand home transaction volumes on its platform growing 25% year-on-year. The company's total gross transaction value (GTV) reached RMB 933.8 billion, up 6.3% year-on-year, marking the first positive growth in a year.

Where to begin with the investment case? Citi issued a research report noting that the second-quarter profits exceeded expectations, highlighting the company's strong operating leverage and the profitability embedded in its platform model. Looking ahead to the third and fourth quarters, the brokerage firm believes that considering the company's prudent guidance, the low comparison base from the same period last year, and recent policy support, profits are likely to see further upward revisions driven by GTV growth — unless there is a one-time asset impairment charge in the fourth quarter.

In addition to its core real estate brokerage business, KE Holdings Inc. is expanding into broader housing and living decision services, which should strengthen its long-term competitive advantages and support sustainable growth going forward.