The Chinese brokerage and real estate marketplace operator KE Holdings saw revenue shoot up in its adjacent business segments as new home transaction volumes dropped off in Q3. Highlights from the company's report on its activities for the three months ended September 30th include:
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.
In comments to shareholders Mr. Stanley Yongdong Peng, Chairman of the Board and CEO said:
“During the third quarter of 2023, China’s real estate market saw meaningful monthly rebound supported by a wave of government favorable policies, such as lowering down payment ratio. We achieved resilient topline performance, which is a powerful testament to our across-the board efforts for business growth and efficiency improvement.”
Despite a steep drop off in the primary real estate sector compared to the comparison quarter in 2022, KE Holdings (aka Beike) managed to turn a profit for the fifth quarter in a row and even allowed for share repurchases and a dividend payment in the quarter.
The period saw a decrease in GTV served by the company's Lianjia brokerage brand but this was offset by increased transaction volumes going through Beike's ACN platform.
KE Holdings' revenue from its burgeoning renovations and furnishings business grew by 72% year-on-year in the third quarter to RMB3.2 billion ($400 million). The business was turbocharged by the $1.2 billion acquisition of Shengdu Home Renovation Co in 2021 and from then has been going from strength to strength with the latest company report attributing growth to organic factors.
There was also an uptick in the company's 'Emerging and other services' segment in Q3 as revenues shot up 203% on the comparison period. The company said this was mainly down to an increased demand for rental property management services.
Peng said that the company would continue to pursue growth in the new business sectors and look to connect a broader range of industry participants to fuel it.