GF SEC released a research report stating that, referencing mainstream internet platforms, it assigns BEKE-W (02423) an 18x adjusted PE for 2026. Under a neutral scenario, this corresponds to a total fair value of RMB 182.4 billion, translating to HK$58.37 per share for the Hong Kong stock and US$22.45 per share for the US stock, maintaining a "Buy" rating. The main points from GF SEC are as follows:

The stabilization of volume and price in the secondary housing market is having a positive impact on KE Holdings Inc.'s performance. At the beginning of 2026, secondary market subscription transactions showed a significant rebound; in the first 18 days of January, the number of secondary subscriptions in BEKE's 79 cities increased by 33% year-on-year. Excluding the factor of BEKE's market share growth, the current transaction volume corresponds to an annualized secondary transaction area of 860 million square meters, up 24% from 2025 and comparable to the annualized 840 million square meters in Q4 2024, increasing the likelihood of a "small sunny season" in 2026.

Affected by rising inventory costs, performance was under pressure in 2025. According to estimates, BEKE's 2025E existing home GTV is RMB 2.1 trillion, down 6% year-on-year, with Q4 2025E GTV at RMB 432.3 billion, down 42% year-on-year. The forecast for 2025E adjusted net profit attributable to parent is updated to RMB 5.5 billion, down 24% year-on-year, with Q4 2025E adjusted net profit attributable to parent at RMB 1.0 billion, down 26% year-on-year.

Its strategic focus on core, resilient markets and steady market share growth provide strong defensiveness. BEKE's existing home business GTV has long had a share of over 80% in Tier 1 and Tier 2 cities, with Beijing, Shanghai, Chengdu, and Hangzhou contributing 37% in 2025. Being deeply rooted in core markets, BEKE fully benefits from the market resilience of these cities during upturns. Furthermore, regardless of the market environment, BEKE's market share has consistently grown steadily, reaching 32% in 2025, still up 1 percentage point. There is still room for future market share growth, driven by an increasing proportion of transactions in high-market-share core cities and expansion in numerous low-market-share cities, indicating strong defensiveness.

Driven by cost reduction, efficiency improvements, and market recovery, confidence in 2026 performance is high. The firm conducted a sensitivity analysis of 2026 performance under three scenarios and, based on the results, applied a valuation method using generalized cash plus adjusted profit (excluding interest) multiplied by adjusted PE. Referencing mainstream internet platforms, it assigns BEKE an 18x adjusted PE for 2026. Optimistic scenario: Secondary volume +15%, price flat, transaction value +15%, market share +2 ppts, corresponding to 2026E adjusted net profit attributable to parent of RMB 8.7 billion, up 59% year-on-year, with an adjusted net profit margin attributable to parent of 8.7%. Neutral scenario: Secondary volume +5%, price -5%, transaction value flat, market share +1 ppt, corresponding to 2026E adjusted net profit attributable to parent of RMB 7.3 billion, up 33% year-on-year, with an adjusted net profit margin attributable to parent of 7.7%. Pessimistic scenario: Secondary volume -4%, price -10%, transaction value -14%, market share flat, corresponding to 2026E adjusted net profit attributable to parent of RMB 6.0 billion, up 10% year-on-year, with an adjusted net profit margin attributable to parent of 6.7%.