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KE Holdings, Inc. Class A (HK:2423)
:2423
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KE Holdings, Inc. Class A
(2423)
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Rating:54Neutral
Price Target:
HK$45.00
▲(10.08% Upside)
KE Holdings faces challenges with declining profitability and liquidity issues, as reflected in its financial performance score. The technical analysis indicates a bearish trend, further impacting the overall score. While there are positive aspects such as growth in certain segments and network expansion, the high P/E ratio suggests overvaluation concerns. The earnings call provided mixed results, with strong growth in some areas but significant declines in profitability.
Positive Factors
Strategic Partnership
The partnership with Linkhome AI to develop AI and 3D visualization technologies enhances KE Holdings' technological capabilities, potentially improving customer engagement and expanding market reach in the real estate sector.
Network Expansion
The expansion of the agent and store network strengthens KE Holdings' market presence, facilitating better service delivery and potentially driving future revenue growth.
Revenue Diversification
Diversification into non-housing transaction services reduces dependency on the volatile housing market, providing a more stable revenue base and enhancing long-term financial resilience.
Negative Factors
Declining Profitability
The decline in gross margin indicates pressure on profitability, which could affect KE Holdings' ability to invest in growth initiatives and maintain competitive pricing in the long term.
Liquidity Concerns
The significant reduction in free cash flow suggests potential liquidity issues, which may limit KE Holdings' operational flexibility and ability to fund new projects or weather economic downturns.
Net Income Decline
The decline in net income reflects challenges in maintaining profitability, which could impact KE Holdings' ability to return value to shareholders and invest in strategic initiatives.
KE Holdings, Inc. Class A (2423) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$150.16B
Dividend Yield2.28%
Average Volume (3M)7.58M
Price to Earnings (P/E)35.6
Beta (1Y)1.93
Revenue Growth32.25%
EPS Growth-2.34%
CountryHK
Employees135,072
SectorReal Estate
Sector Strength53
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.56
Shares Outstanding3,403,080,600
10 Day Avg. Volume7,095,048
30 Day Avg. Volume7,584,211
Financial Highlights & Ratios
PEG Ratio-1.30
Price to Book (P/B)2.13
Price to Sales (P/S)1.62
P/FCF Ratio18.05
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$57.82Price Target Upside41.44% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
KE Holdings, Inc. Class A Business Overview & Revenue Model
Company DescriptionKE Holdings Inc., through its subsidiaries, engages in operating an integrated online and offline platform for housing transactions and services in the People's Republic of China. It operates through four segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging and Other Services. The company provides Beike, an integrated online and offline platform for housing transactions and services; Agent Cooperation Network, an operating system that fosters reciprocity and bonding among various service providers; SaaS Systems; owns and operates Lianjia, a real estate brokerage branded store; owns Deyou brand for connected brokerage stores; and other brands. The company was founded in 2001 and is headquartered in Beijing, the People's Republic of China.
How the Company Makes MoneyKE Holdings generates revenue primarily through its real estate services, which include online listings, transaction services, and advertising. The company earns a significant portion of its income from commissions on property transactions facilitated through its platform. Additionally, KE Holdings offers value-added services to real estate agents, creating another revenue stream. The company has established partnerships with various real estate developers and agencies, which enhances its inventory and service offerings, contributing to its overall earnings. Moreover, by leveraging big data and AI technologies, KE Holdings is able to provide tailored services that improve customer engagement and retention, further boosting its revenue potential.
KE Holdings, Inc. Class A Earnings Call Summary
Earnings Call Date:Aug 26, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented mixed results. While there were strong performances in new home transactions and home rental services, significant declines in net income and gross margin were noted. The expansion of the agent and store network and the diversification of revenue streams were positive, but the overall financial performance was affected by external market conditions.Q2-2025 Updates
Positive Updates
Strong Growth in New Home Transactions
New home orders on our platform increased by 19%, outperforming the market, which declined by 6%, both year-over-year.
Home Rental Services Surge
Revenue from our home rental services business reached a record high of RMB5.7 billion in Q2, up 78% year-over-year.
Expansion of Agent and Store Network
The number of active stores on our platform increased by 30%, and the number of active agents leaped by 19.5% in the first half of the year, both year-over-year.
Revenue Growth and Diversification
Total revenues reached RMB26 billion, up 11.3% year-over-year, with non-housing transaction services accounting for 41% of total revenues in Q2.
Increase in Existing Home Sales Proportion
Existing home sales transactions on our platform rose by 26% year-over-year, outpacing the market’s growth rate of 19%.
Negative Updates
Decline in Gross Margin
Gross margin declined by 6 percentage points year-over-year to 21.9%.
Decrease in Net Income
GAAP net income was RMB1.31 billion, falling 31.2% year-over-year. Non-GAAP net income reached RMB1.82 billion, down 32.4% year-over-year.
Challenges in Existing Home Transaction Services
Revenue from existing home transactions reached RMB6.7 billion in Q2, down 8.4% year-over-year.
Softening Real Estate Market
The slowdown in the real estate market was largely due to international trade friction and the fading impact of earlier policy measures.
Company Guidance
In the second quarter of 2025, KE Holdings Inc. reported a total Gross Transaction Value (GTV) of RMB878.7 billion, marking a 4.7% year-over-year increase. Total revenues reached RMB26 billion, up 11.3% from the previous year. Despite these gains, the company's gross margin decreased by 6 percentage points to 21.9%, and GAAP net income fell by 31.2% year-over-year to RMB1.31 billion. Non-GAAP net income also declined by 32.4% to RMB1.82 billion. The company saw significant growth in its home rental services, with revenue reaching RMB5.7 billion, an increase of 78% year-over-year, and it managed over 590,000 rental units by the end of Q2. KE Holdings continued to expand its network, with a 30% increase in active stores and a 19.5% rise in active agents in the first half of 2025. The company's existing home sales transactions rose by 26%, surpassing the market’s estimated growth of 19%, while new home orders increased by 19%, outperforming the market's 6% decline. Despite the challenges, KE Holdings remains focused on operational efficiency and technological integration to enhance productivity and maintain its competitive edge.KE Holdings, Inc. Class A Financial Statement Overview
Summary
KE Holdings demonstrates stable revenue growth and a strong balance sheet with low leverage. However, declining profitability margins and significant reductions in free cash flow raise concerns about operational efficiency and liquidity.Income Statement
KE Holdings shows a modest revenue growth rate of 2.63% TTM, indicating stability in revenue generation. However, the gross profit margin has decreased from previous years, and net profit margin has also declined, reflecting pressure on profitability. The EBIT and EBITDA margins have similarly contracted, suggesting challenges in operational efficiency.65
Positive
Balance Sheet
The company's debt-to-equity ratio remains low at 0.32, indicating a conservative leverage position. However, the return on equity has decreased to 5.58% TTM, showing reduced profitability on shareholder investments. The equity ratio remains strong, suggesting a solid capital structure.70
Positive
Cash Flow
Free cash flow has significantly decreased by 68.57% TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is low, suggesting that cash generation from operations is not keeping pace with reported earnings. The free cash flow to net income ratio remains healthy, but the declining trend is concerning.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 103.05B | 93.46B | 77.78B | 60.67B | 80.75B | 70.48B |
| Gross Profit | 22.83B | 22.94B | 21.72B | 16.03B | 19.07B | 18.95B |
| EBITDA | 4.03B | 4.93B | 9.31B | 817.87M | 762.60M | 4.25B |
| Net Income | 3.90B | 4.06B | 5.88B | -1.39B | -524.13M | 2.78B |
Balance Sheet | ||||||
| Total Assets | 123.69B | 133.15B | 120.33B | 122.77B | 122.72B | 123.66B |
| Cash, Cash Equivalents and Short-Term Investments | 44.98B | 52.76B | 53.89B | 54.90B | 49.85B | 56.66B |
| Total Debt | 21.97B | 22.65B | 17.99B | 12.19B | 7.51B | 7.99B |
| Total Liabilities | 54.85B | 61.70B | 48.13B | 45.24B | 40.69B | 44.47B |
| Stockholders Equity | 68.71B | 71.32B | 72.10B | 68.92B | 66.97B | 66.77B |
Cash Flow | ||||||
| Free Cash Flow | 2.03B | 8.41B | 10.28B | 8.92B | 2.61B | 9.52B |
| Operating Cash Flow | 2.51B | 9.45B | 11.16B | 9.84B | 4.33B | 10.52B |
| Investing Cash Flow | 5.42B | -9.38B | -3.98B | -8.47B | -24.88B | -14.98B |
| Financing Cash Flow | -6.40B | -5.79B | -6.96B | -1.21B | -1.07B | 25.41B |
KE Holdings, Inc. Class A Technical Analysis
Negative
40.88
Price Trends
48.31
Negative
48.39
Negative
49.92
Negative
Market Momentum
-1.92
Positive
25.11
Positive
10.94
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2423, the sentiment is Negative. The current price of 40.88 is below the 20-day moving average (MA) of 45.84, below the 50-day MA of 48.31, and below the 200-day MA of 49.92, indicating a bearish trend. The MACD of -1.92 indicates Positive momentum. The RSI at 25.11 is Positive, neither overbought nor oversold. The STOCH value of 10.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2423.
KE Holdings, Inc. Class A Risk Analysis
KE Holdings, Inc. Class A disclosed 95 risk factors in its most recent earnings report. KE Holdings, Inc. Class A reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
KE Holdings, Inc. Class A Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | HK$90.30B | 22.30 | 23.11% | 3.21% | 10.31% | 8.93% | |
70 Outperform | HK$14.03B | 16.34 | 10.30% | 2.88% | -0.95% | 14.89% | |
68 Neutral | HK$19.08B | 11.58 | 15.94% | 4.23% | 6.54% | 3.26% | |
66 Neutral | $20.63B | 13.91 | 3.72% | 4.82% | 7.23% | ― | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | HK$26.21B | 20.66 | 7.08% | 1.46% | 5.75% | -31.63% | |
54 Neutral | HK$150.16B | 35.62 | 5.57% | 2.28% | 32.25% | -2.34% |
* Real Estate Sector Average
HK:2423
KE Holdings, Inc. Class A
40.88
-17.56
-30.05%
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KE Holdings, Inc. Class A Corporate Events
KE Holdings Inc. Schedules Board Meeting to Review Financial Results
Aug 14, 2025
KE Holdings Inc. has announced an upcoming board meeting scheduled for August 26, 2025, where the board will review and approve the company’s unaudited financial results for the second quarter and first half of the year. This announcement indicates the company’s commitment to transparency and regular financial reporting, which could impact its market positioning and stakeholder confidence positively.
The most recent analyst rating on (HK:2423) stock is a Buy with a HK$65.00 price target. To see the full list of analyst forecasts on KE Holdings, Inc. Class A stock, see the HK:2423 Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.