• Total Revenue: RMB93.5 billion, up 20.2% year-over-year.
• Gross Margin: 24.6% for the full year.
• Adjusted Net Income: RMB7.21 billion for the full year.
• Net Operating Cash Inflow: RMB9.4 billion for the full year.
• GTV (Gross Transaction Value): RMB3.35 trillion for the full year.
• Existing Home Transactions GTV: RMB2.25 trillion, up nearly 11% year-over-year.
• New Home Transactions GTV: RMB970 billion, down 3.3% year-over-year.
• Home Renovation and Furnishing Revenue: RMB40.8 billion, up 36% year-over-year.
• Home Rental Services Revenue: RMB14.3 billion, up 135% year-over-year.
• Number of Active Stores: Nearly 49,700, up 80.3% year-over-year.
• Number of Agents: 445,000, up 12.1% year-over-year.
• Q4 Revenue: RMB31.1 billion, up 54.1% year-over-year.
• Q4 Gross Margin: 23%, down 2.4 percentage points year-over-year.
• Q4 GAAP Net Income: RMB575 million, down 13.8% year-over-year.
• Q4 Non-GAAP Net Income: RMB1.34 billion, down 21.6% year-over-year.
• Cash Liquidity: RMB78.7 billion at the end of Q4.
• Share Repurchase: USD760 million worth of shares repurchased in 2024.
• Final Cash Dividend for 2024: USD0.12 per ordinary share or USD0.36 per ADS.

• Warning! GuruFocus has detected 2 Warning Sign with BEKE.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• KE Holdings Inc (NYSE:BEKE) achieved a significant increase in active stores, growing by 80.3% year-over-year to nearly 49,700.
• The company reported a record high total revenue of RMB93.5 billion for 2024, marking a growth of over 20% year-over-year.
• The home renovation and furnishing business saw a 36% increase in revenue, reaching RMB40.8 billion, with improvements in supply chain management and reduced construction timelines.
• The home rental services revenue surged by 135% year-over-year to RMB14.3 billion, with improvements in operational efficiency and tenant experience.
• KE Holdings Inc (NYSE:BEKE) maintained a robust cash position, with a net operating cash inflow of RMB9.4 billion in 2024, and announced a final cash dividend for 2024, reflecting strong shareholder returns.

Negative Points

• The new home transaction business experienced a slight decline in GTV by 3.3% year-over-year, indicating challenges in the new home sales market.
• Gross margin for Q4 2024 declined by 2.4 percentage points year-over-year to 23%, primarily due to decreased contribution margins from certain services.
• GAAP net income for Q4 2024 decreased by 13.8% year-over-year, reflecting challenges in maintaining profitability.
• The company faced increased operating expenses in Q4 2024, with a 15.8% year-over-year rise, driven by higher personnel and marketing costs.
• Despite strong growth in the home rental business, the market remains challenging with declining rents and persistent oversupply, posing risks to future profitability.

Q & A Highlights

Q: How is KE Holdings planning to leverage AI technology across its business operations? A: Yongdong Peng, Chairman and CEO, explained that AI will be used to enhance efficiency and user experience across three areas: consumer service, supply side, and platform side. AI will help optimize cost inflows, improve service quality, and enhance agent capabilities. The company is developing its own AI models, such as the Care Home and Dream Home, to support various applications, including AI-powered home seeking assistants and AI design tools for home renovation. In 2025, KE Holdings plans to increase AI investment to further integrate AI into its operations and improve efficiency.

Q: What is the outlook for the property market in 2025, considering the recent rebound? A: Tao Xu, CFO, noted that the market showed positive signals in 2024, with a strong rebound in Q4 due to policy measures. The existing home market saw a 15% increase in transaction units, while new home sales faced challenges. In 2025, the market is expected to stabilize, with a modest recovery in the existing home market and continued adjustments in the new home market. Structural changes will likely reinforce the dominance of existing homes, with larger, nearly new homes becoming more attractive to buyers.

Q: How did KE Holdings' agency business perform in 2024, and what are the plans for 2025? A: Tao Xu, CFO, reported that the company focused on expanding its agent and store network in 2024, achieving significant growth. The number of active non-Lianjia stores and agents increased by 20% and 11% year-over-year, respectively. In 2025, KE Holdings will continue to grow its network while enhancing efficiency through digital tools and ecosystem collaboration. The company aims to improve operational capabilities and increase agent income.

Q: What are the key drivers behind the strong growth in KE Holdings' home rental business? A: Tao Xu, CFO, highlighted that the Carefree Rent service drove the growth, with the number of managed units exceeding 420,000 by the end of 2024. The company improved efficiency through service specialization and AI tools, which increased unit signups by 29% year-over-year. In 2025, KE Holdings plans to balance scale and operations by enhancing service quality and re-renting efficiency, leveraging AI to improve leasing efficiency and expanding traffic channels.

Q: How did the home renovation and furnishing business perform in 2024, and what are the strategic plans for 2025? A: Tao Xu, CFO, stated that the business achieved robust growth, with revenue reaching RMB14.8 billion, up 36.1% year-over-year. The company improved delivery capabilities and integrated housing transaction services with renovation services. In 2025, KE Holdings plans to enhance product strength, improve delivery quality, and boost operational efficiency. The focus will be on providing comprehensive renovation solutions and upgrading showrooms to enhance customer experience.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.