Griffin Chan

Griffin Chen inquired about how KE Holdings' leasing service business transitioned from losses last year to operating profit by Q3 2025, and what further opportunities exist for improvement.

Answer

CFO Tao Xu attributed the profitability to economies of scale from rapid growth in units and revenue, the higher margin 'Carefully Rent' light access model, and improved operational efficiency. He highlighted future improvements through diversifying rental channels, reducing labor costs by increasing units managed per property manager, and expanding value-added services.

Griffin Chen from City Property Team asked how KE Holdings' leasing service business transitioned from losses to operating profit by Q3 2025 and what further opportunities exist for improvement.

Answer

Tao Xu, CFO of KE Holdings, attributed the improved profitability to economies of scale from rapid growth, the higher margin light access model of Carefree Rent, and enhanced operational efficiency. He highlighted increased units managed per property manager and reduced default costs, projecting continued improvement through diversified channels and further AI investment.

Griffin Chan from Citigroup questioned how the new property development model, which promotes quality and moving-ready homes, creates new opportunities for Beike in areas like demand forecasting and quality assessment.

Answer

Executive Director and CFO Tao Xu explained that this new model highlights Beike's value to developers. He noted that while new standard products may initially have lower brokerage penetration, they boost agent confidence and drive upgrades in cooperation models. Xu emphasized Beike's capabilities in pricing forecasts, unit mix forecasting, and customer insights, which help developers position products accurately and enhance competitiveness, extending Beike's value from brokerage to the product source.

Griffin Chan questioned the results of the company's aggressive agent and store network expansion in 2024 and inquired about the strategy for 2025, asking if Beike would continue this growth path or pivot to focus more on AI-driven efficiency.

Answer

Tao Xu, Executive Director and CFO, confirmed that the 2024 strategy focused on growth, resulting in a 20% increase in active non-Lianjia stores and an 11% rise in agents, with a strong ROI demonstrated by a six-month payback period for new stores. For 2025, Xu stated that while growth and ecosystem development remain key, there will be an increasing focus on enhancing efficiency through digital tools and promoting the 'large store model' to drive productivity gains.

Griffin Chan questioned management on the perceived effect of government-led home replacement ('old-for-new') policies on overall housing demand and asked how KE Holdings intends to participate and leverage its market leadership position.

Answer

CFO Tao Xu described the 'destocking' policies as a positive measure to rebalance market dynamics. He explained that KE Holdings is an active participant, having pioneered an 'old-for-new' model in Qingdao in 2022. This model, which has since expanded to 12 cities, helps developers attract incremental buyers and provides a more efficient experience for clients, completing nearly 200 such transactions in Qingdao in 2023.