KE Holdings Inc (HKG: 02423), also known as BEKE-W, saw its shares climb more than 5% during Tuesday afternoon trading, with the stock last changing hands at HK$48.02, representing a 5.03% gain. Trading volume for the session reached HK$370 million as investor sentiment turned decidedly positive following the company's latest earnings release.

The Hong Kong-listed shares of the real estate platform operator have been buoyed by its second-quarter performance, which showed net revenue of RMB 24.5 billion alongside an adjusted operating profit of RMB 3.59 billion. The adjusted operating margin came in at 14.6%, marking a substantial year-on-year improvement of 8.5 percentage points, underscoring the operational efficiency gains achieved during the period.

Further strengthening the bullish case, the company's existing home transaction volumes on its platform grew 25% year-on-year, while overall gross transaction value reached RMB 933.8 billion, up 6.3% from the prior-year period. Notably, this represents the first positive growth in GTV in over a year, signaling a potential turning point for the company's core business trajectory.

Following the results, Citi issued a research note highlighting that KE Holdings Inc's second-quarter profits exceeded expectations, which the brokerage attributed to the company's aggressive operational leverage and the inherent profitability embedded in its platform model. Given the observed recovery in property transactions across key cities where the company has strategic presence, Citi has reaffirmed its stance on the stock as a top pick within the sector.

The brokerage has consequently raised its H-share price target on BEKE-W from HK$73.60 to HK$75.40, while simultaneously lifting its American depositary shares target for KE Holdings Inc (NYSE: BEKE) from US$26.40 to US$26.60. Citi continues to maintain its "Buy" rating on the shares.

Looking ahead to the third and fourth quarters, Citi analysts noted that, factoring in the company's cautious guidance, the low comparison base from the third quarter of last year, and recent policy support measures, they anticipate further upward revisions to profit estimates driven by GTV growth. This outlook holds unless the fourth quarter brings one-time asset impairment charges, which could temper the expected momentum.

Beyond its core transaction business, KE Holdings Inc is actively expanding into housing and residential decision-making services, a strategic move designed to strengthen its long-term competitive advantages and support sustainable growth. This diversification effort is seen as a key driver in differentiating the company within China's competitive real estate services landscape.