Chinese Leader KE Holdings Sees Net Losses Widen to $203m in 2022 As It Goes "from high-speed to high quality growth"

March 16, 2023
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Leading Chinese real estate brokerage and portal company KE Holdings (aka Beike) has released a report on its performance for Q4 of the 2022 financial year. Interesting points from the report include:

  • GTV (gross transaction value) was down by almost a third on 2021's numbers at $378.4 billion. New home GTV was down 41% and existing home GTV was down 23%.
  • The company's renovation business grew impressively. GTV for the segment was $0.8 billion in 2022.
  • Net loss widened by 62% in 2022 to $203 million.
  • Revenue was down 25% in 2022 at $8.8 billion.

In comments to shareholders, Chairman and CEO Stanley Yongdong Peng said that despite the losses, Beike had outperformed the market in 2022.

“Amid the challenging housing market in 2022, we underwent a strategic transformation from high-speed to high quality growth, which not only enabled us to continue outperforming the market in GTV growth and cultivate new growth engines, such as home renovation and furnishing but also delivered contribution margin expansion in both our existing and new home transaction services in 2022.”

As is the case for most real estate marketplace businesses in China, the primary market has traditionally brought in the bulk of Beike's revenue. With COVID restrictions and "soft market sentiment" playing havoc with the sector over the course of 2022 the company saw much of its core business wiped out.

The number of agents on Beike's system along with the number of physical storefronts it operates has dropped markedly since the onset of the pandemic along with primary housing sales.

The report included some better news for company shareholders in some of Beike's operational and financial metrics. As the number of agents dropped commission payouts were down significantly and costs were down across the board while the company chose to maintain 2021's levels of investment in marketing activities.

"we reported notable improvements in multiple financial metrics, including contribution margin for both existing and new home transaction services, gross margin and adjusted net income, as well as a stronger free cash flow, demonstrating our successful shift of focus from high-speed to high-quality growth," said company CFO, Tao Xu

The company's stated long-term goal is to be a part of every transaction that occurs in Chinese homes and Beike has high hopes for its home renovations business which was supercharged by the $1.2 billion acquisition of Shengdu Home Renovation Co in 2021.

The renovations business generated net revenues of $731 million in 2022 at a positive contribution margin and was another segment which the company claims outpaced the industry over the year. The business's growth is accelerating with over $300 million of the revenue generated in the fourth quarter alone aided by increasing synergies and adverting across the company's network.


Having been founded as a Beijing-based brokerage business (Lianjia) in 2001, KE Holdings has gone on to be the largest specialist real estate portal operating company in the world by gross transaction volume and revenue.

The company works with agents on an exclusive basis with all participants graded on a points system and liable to be sanctioned for any deviation from protocol. Details of the "stringent ecosystem governance" which were mentioned by Yongdong Peng in comments accompanying the release, were shared with attendees of the Property Portal Watch conference in Bangkok two weeks ago by former KE Holdings employee Brett Hartley-Wilson.

March 16, 2023
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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