On May 23rd, a technology driven one-stop new residential service platform called Beike (NYSE: BEKE; HKEX: 2423) releases financial results for the first quarter of 2024. Driven by the "One Body, Three Wings" strategy, Beike operates solidly and steadily, providing consumers with one-stop, high-quality residential services. During the reporting period, Beike achieved a total transaction volume (GTV) of 629.9 billion yuan (RMB), net income of 16.4 billion yuan, net profit of 432 million yuan, and adjusted net profit of 1.392 billion yuan.
Peng Yongdong, co-founder, chairman, and CEO of Beike, said, "As the stock housing market gradually plays a more important role, China's real estate industry is accelerating its transformation into a new era. We have made new attempts in multiple business areas with quality and efficiency as our core. We actively connect high-quality stores in the industry and innovate the 'community mini branch' store model in Shanghai Lianjia, significantly enhancing community rooting and service capabilities, and gradually building a one-stop residential service infrastructure. We have deeply explored customer needs and made many new explorations to improve our online and offline service capabilities in real estate transactions and new businesses. In the context of the changing times, we embrace greater new possibilities, with the aim of serving customers." Experience as the core, actively solving problems
Xu Tao, Executive Director and Chief Financial Officer of Beike, said, "We are actively promoting the 'One Body, Three Wings' strategy, and the' One Stop New Residential Service Platform 'model has further emerged. In the first quarter, the non real estate transaction service business developed rapidly, with a year-on-year increase of 112.9% in revenue, an increase of 21.7 percentage points to 35%. 2024 is a year for us to strengthen our strategic foundation. We will use our excellent financial management capabilities to allocate resources, control risk bottom lines, help our business achieve long-term growth, and firmly provide shareholder returns, bringing long-term value to investors."
Innovative service model upgrade experience, continuously iterating on the axis of quality and efficiency
Since the beginning of this year, due to the impact of a high base in the same period last year, the real estate market in the first quarter has declined year-on-year. However, compared with the normal performance of the first quarter market, the development momentum of the stock housing market has remained stable. In the first quarter of this year, on the Shell platform, the transaction volume of existing housing in 16 cities exceeded that of the same period last year, and the transaction scale of existing housing in 74 cities exceeded that of local new housing transactions. Since the beginning of this year, the release of favorable policies such as further relaxing the eligibility of homebuyers and lowering mortgage interest rates has also provided certain support for the real estate market.
In order to better embrace the new opportunities of market transformation and development, Beike deeply understands the changes in customer demand, continuously focuses on improving service quality and store efficiency, and promotes the continuous enhancement of real estate transaction service capabilities. In the first quarter of 2024, the GTV of Shell's existing housing business reached 453.2 billion yuan, with a net income of 5.73 billion yuan. The GTV of new housing business reached 151.8 billion yuan, with a net income of 4.92 billion yuan.
In terms of store operation, Beike has achieved good results in aggregating high-quality supply of platform personnel and store networks. At the end of the first quarter, the platform had 42593 active stores, adding nearly 3000 new stores compared to the same period last year.
From the perspective of business performance, the quality of the newly connected stores exceeded expectations. The personnel efficiency of newly signed stores in the second half of last year increased to over 90% of the platform's inventory store personnel efficiency within six months. The efficiency of stores with only low single digit numbers is significantly higher than other types of stores signed during the same period, which also drives Beike to continuously improve its service capabilities for various types of stores, including creating workstations for store owners, simplifying store management paths through functions such as data dashboards and business opportunity management, and technology supporting scientific store management.
Beike is simultaneously piloting a diversified innovative store model, based on agents and stores rooted in the community, gradually creating an entrance for one-stop residential services, from housing transactions to services centered around "home", opening up more possibilities. In Shanghai, Lianjia has brought deeper community connectivity and customer demand mining capabilities in the form of "community mini outlets". In response to the complex transaction process of traditional stock housing, Beike has promoted and implemented a one-stop service model in multiple cities across the country, significantly reducing transaction time and improving transaction experience. In Suzhou, real estate registration services have entered the Shell Signing Service Center, where homebuyers can complete loan approval, tax payment, mortgage registration, transfer registration, and other procedures in a one-stop manner. They can also print and receive real estate ownership certificates on site, achieving "less errands" and "more worry free".
In terms of new housing business, Beike has further expanded its channel cooperation under the premise of controlling the bottom line of risks. In the first quarter, it achieved a dual breakthrough in both quantity and quality of strategic cooperation with developers, further covering core large state-owned enterprises. It has also reached total to total cooperation with six of the top 10 real estate companies in the top 100, providing better payment protection.
In the first quarter, the turnover days of accounts receivable for Shell's new houses were 69 days, and the proportion of "fast commission" projects prepaid by developers remained at a high level of 46%. The proportion of revenue from China's state-owned enterprises in their new house business was 49%. In addition, Beike supports innovative product and service models such as "worry free exchange" for selling old and buying new, as well as "peace of mind return" and "worry free decoration", bringing service innovation to developers through its composite capabilities and solving the problem of customers buying houses.
In the context of choosing more yuan and a larger selection radius for home purchases, Beike is constantly transforming and upgrading its online capabilities based on customers, focusing on client infrastructure and business opportunity traffic construction, enriching the forms of connection with users, and actively reaching more users. In the current era where personal bloggers are increasingly gaining customers through new media for real estate content, Beike also launched the New Media Talent Incubation Program as early as 2022, empowering willing store owners and agents on the platform to become anchors, helping everyone acquire customers through short videos and live broadcasts, and making more service providers trust touchpoints for customers online, helping agents better understand customer needs, and helping customers improve their efficiency and experience in selecting properties. As of the end of the first quarter, Beike has established a large-scale real estate MCN matrix nationwide, supporting over 12000 store owners and agents, with a total fan base of nearly 36 million.
Consolidate the delivery quality of home decoration and rental business, and provide "one-stop" services to assist in a better living environment
Since the proposal of the "One Body, Three Wings" strategy, Beike has actively promoted new businesses and continuously improved the synergy between various tracks. The "one-stop new living service platform" is taking shape, and the connotation of "beautiful living" is constantly enriched. Under the premise of ensuring delivery quality, significant progress has been made in home decoration and rental business, which is becoming a new engine for the future development of Beike.
In the first quarter of this year, Beike Home Decoration's home furnishing business continued to grow rapidly, with a contract amount of 3.39 billion yuan, a year-on-year increase of 26.1%, and a net income of 2.41 billion yuan, a year-on-year increase of 71.1%; The new retail contracts, including customized furniture and soft furnishings, amounted to 940 million yuan, an increase of 5.1 percentage points compared to the same period last year. In March of this year, the contract value of Beike Home Decoration Home Furnishing Business was nearly 2 billion yuan, a year-on-year increase of 53%. In Beijing, the sixth flagship store of bedding decoration, Huilongguan, has opened, providing consumers with a new one-stop buying and decoration model.
To achieve a positive cycle of scale, quality, and efficiency, Beike attaches great importance to improving delivery capabilities while expanding its business. Taking the management of home decoration and home furnishing business schedule as an example, the construction period in the first quarter of this year reached about 104 days, a decrease of about 18 days compared to the same period last year. Shell ensures production capacity through competitive strategies, while implementing strong process node management to intervene in and quickly resolve construction sites with delay risks, avoiding delays.
With the continuous increase in the scale and importance of housing rental service business, Beike has been disclosing relevant data on housing rental service business since the first quarter of 2024. The housing rental service business involves decentralized and centralized rental housing management and operation services, as well as online rental butler services and other leasing related services. Data shows that in the first quarter, the revenue from shell housing rental services reached 2.63 billion yuan, of which the revenue from decentralized rental housing management and operation services "worry free rental" accounted for more than 95%. At the end of the first quarter, the number of "worry free rentals" under management exceeded 240000 units, and the scale of centralized long-term rental apartments under management exceeded 11000 units.
At the same time, "worry free rental" maintained stable operation, with a occupancy rate of 96.5% at the end of the first quarter, an increase of about 2.7 percentage points year-on-year, effectively reducing vacancy risk and rental fluctuation risk under the iteration of the model. The rental rate of self operated apartments that have been open for 6 months has increased by about 3.8 percentage points compared to the same period last year, reaching 94.8%. Last March, Beike upgraded its "worry free rental" service to meet the core needs of tenants. Currently, a standardized service fulfillment process has been established, and customer satisfaction and recommendation rates have significantly improved after three days of stay.
As the industry enters a new stage of development, Beike will also experience new challenges and growth in the process of "climbing the second mountain". In 2024, Beike will continue to strengthen its basic capabilities, improve service quality, leverage the advantages of refined operation and scientific management, and strive to provide more consumers and service providers with a peaceful and prosperous life. (CIS)