BEKE-W (02423) surged over 3% following its earnings release, trading at HK$43.6 with a turnover of HK$146 million by press time.

The company reported its Q3 2025 results, showing a total transaction volume of RMB736.7 billion, largely flat year-on-year (YoY). Existing home transactions contributed RMB505.6 billion (+5.8% YoY), while new home transactions fell to RMB196.3 billion (-13.7% YoY). Net revenue rose 2.1% YoY to RMB23.1 billion, but net profit declined 36.1% to RMB747 million. Adjusted net profit stood at RMB1.286 billion (-27.8% YoY).

Huatai Securities noted BEKE’s Q3 revenue of RMB23.1 billion (flat YoY) aligned with consensus estimates. By segment, existing/new home sales, home renovation, and leasing revenues changed -4%, -14%, +2%, and +45% YoY, respectively. Gross margin dipped 1.3 percentage points to 21.4%, attributed to lower brokerage income contribution and deleveraging effects. Adjusted net profit of RMB1.3 billion (5% above estimates) benefited from reduced home renovation marketing costs.

The brokerage forecasts Q4 revenue to drop 27% YoY due to a high base post-September 2024 policy adjustments. However, BEKE’s 2026 margins are expected to improve significantly, driven by brokerage efficiency gains, home renovation profit recovery, and AI-enhanced leasing operations. A "Buy" rating was maintained.