KE Holdings Sees 20% GTV Uptick in 2023 and Announces Special Dividend as It Outperforms Chinese Market

March 20, 2024
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The Chinese brokerage and real estate marketplace operator KE Holdings (aka Beike) saw gross transaction value (GTV) increase 20% in 2023 as revenues ticked up 28%. Other notable points from the company's report on its activities for the fourth quarter of 2023 include:

  • Net income for 2023 was RMB5,890 million (US$830 million), compared to net loss of RMB1,397 million in 2022.
  • Mobile monthly active users averaged 43.2 million in the fourth quarter, up 18% on 2022's figure.
  • The number of active agents on the company's network increased 8.5%.

China's real estate market is slowly recovering after the disastrous cumulative effects of covid restrictions, the drying demand for investment-class real estate, the end of cheap capital and the impact of the Evergrande crisis.

Although the new homes market experienced weak demand and there continues to be a lot of uncertainty around the Chinese market as a whole, Beike's CFO, Mr. Tao Xu was optimistic in comments accompanying a company press release:

“In 2023, the Chinese real estate market deepened its transformation, with the existing and new home market showing differentiated performance. Facing an evolving environment, our performance in 2023 demonstrated remarkable resilience. Our series of measures to reduce costs, enhance efficiency, and mitigate risks have brought us significant operating leverage.

We believe that our excellent financial management capabilities will safeguard the healthy growth of our Company, helping us navigate through cyclical fluctuations and achieve more organic and efficient growth.”

The GTV for Beike's new homes business was RMB1,003.0 billion (US$141.3 billion) in 2023, an increase of 6.7% year-over-year. The company's existing homes segment saw growth of 28% for the year with a GTV of $286 billion. Encouragingly, both segments saw historically high contribution margins bringing Beike's net revenue for the year to $830 million (2022 was a loss of $203 million).

KE Holdings owns and operates one of the largest real estate marketplaces in the country, one of China's largest brokerage businesses (Lianjia), one of the world's largest virtual tour providers (Realsee) as well as a burgeoning renovations business fuelled by the $1.2 billion acquisition of Shengdu Renovation Co in 2021.

Unlike several competitors, KE Holdings' has a strong financial position with more cash than debt and a business that is outperforming the market. In a shareholder call, company executives laid out plans to go deeper into rentals as the market waits for stability in the new build sector.

Beike's leadership also announced a special dividend with an aggregate amount of approximately US$0.4 billion to be paid in April.

March 20, 2024
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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