KE Holdings Inc. (NYSE: BEKE), a leading integrated online and offline platform for housing transactions and services in China, saw its stock price plummet 5.88% in pre-market trading on Thursday. This sharp decline came despite the company reporting better-than-expected first-quarter 2025 financial results.

The company announced that its Q1 adjusted earnings reached 1.19 Chinese renminbi ($0.17) per American depositary share, surpassing analysts' expectations of 0.98 Chinese renminbi. Total net revenue for the quarter ended March 31 was 23.33 billion Chinese renminbi, up from 16.38 billion a year earlier and above the FactSet consensus estimate of 22.63 billion.

Despite these positive figures, investors appear to be concerned about the company's future growth prospects. The significant stock price drop suggests that the market may have been expecting even stronger results or found other aspects of the earnings report worrying. Factors such as increased competition in the Chinese real estate market, potential regulatory challenges, or concerns about the broader Chinese economy could be contributing to investor unease. As the trading day progresses, market participants will be closely watching for any additional insights or analyst commentary that might explain the disconnect between the company's reported performance and the market's reaction.