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KE Holdings, Inc. Class A (HK:2423)
:2423
Hong Kong Market

KE Holdings, Inc. Class A (2423) AI Stock Analysis

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HK

KE Holdings, Inc. Class A

(2423)

Rating:73Outperform
Price Target:
HK$56.00
▲(13.02%Upside)
KE Holdings' strong revenue growth and effective use of AI are major strengths, contributing positively to the stock score. However, financial risks due to increased leverage and valuation concerns weigh down the score. The mixed technical analysis and challenges highlighted in the earnings call, such as declining gross margins and cash outflows, indicate areas needing attention.
Positive Factors
Analyst Recommendation
Analyst reiterates a BUY recommendation for KE Holdings, recognizing its solid market positioning as a key beneficiary of market stabilization in China.
Financial Health
KE Holdings has RMB54.6bn in net cash on hand, making it one of the most direct proxies to ride on rising upgrader demand and upcoming wave of policy support.
Market Positioning
KE Holdings is the unparalleled leader in both first and second home transaction markets, with continually increasing market share.
Negative Factors
Earnings Adjustments
Earnings for FY25-26 have been adjusted downward by 2-6% due to changes in GTV and cost assumptions.
Earnings Guidance
Latest 2Q25 and full-year guidance fell short; revenue expectations in-line but margin outlook came in more reserved than expected.
Revenue and Margin Outlook
Latest guidance fell short with revenue expectations in-line but margin outlook more reserved.

KE Holdings, Inc. Class A (2423) vs. iShares MSCI Hong Kong ETF (EWH)

KE Holdings, Inc. Class A Business Overview & Revenue Model

Company DescriptionKE Holdings, Inc. Class A (2423) is a leading integrated online and offline platform for housing transactions and services in China. The company operates under the Beike brand, providing a comprehensive range of services for housing transactions and related services. Its core offerings include facilitating home sales, rentals, and renovation services, leveraging a technology-driven platform to connect consumers with real estate agents and other service providers.
How the Company Makes MoneyKE Holdings, Inc. generates revenue primarily through commission fees from real estate transactions facilitated on its platform. These transactions include the buying and selling of homes, as well as rental agreements. The company also earns income from value-added services related to housing transactions, such as home renovation and furnishing, financial services, and marketing services for developers and real estate agents. KE Holdings, Inc. has established partnerships with real estate agents and developers, who list their properties on the platform, thereby attracting a wide range of consumers and expanding its market reach.

KE Holdings, Inc. Class A Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q1-2025)
|
% Change Since: -6.77%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong performance with significant revenue growth and successful expansion of active stores and agents. The company is leveraging AI for efficiency gains and has seen notable growth in its home renovation business. However, there are concerns about declining gross margins, a sequential decline in new home transaction revenue, and ongoing challenges in the existing home market. The cash outflow is another area of concern.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Net revenue reached RMB23.3 billion, up 42.4% year-over-year.
Increase in GTV
Total GTV was RMB844.2 billion, representing a year-over-year increase of 34%.
Expansion of Active Stores and Agents
The number of active stores surpassed 55,200, a record high, increasing over 12,600 from the same period one year ago. The number of active agents grew by 23% year-over-year.
AI Implementation
AI tools were deployed for home transaction business and agent services, leading to efficiency improvements, such as a 30% increase in conversion rate from leads to formal client mandates.
Home Renovation Business Growth
Revenue reached RMB2.9 billion, increasing by 22.3% year-over-year, with a 32.6% contribution margin, up 2 percentage points year-over-year.
Negative Updates
Decline in Gross Margin
Gross margin declined by 4.5 percentage points year-over-year to 28.7%.
Sequential Revenue Decline in New Home Transactions
Revenue from new home transactions dropped by 38.2% from the previous quarter.
Challenges in Existing Home Market
Conversion from home viewing to transaction has slowed due to short-term uncertainties affecting buyer expectations, including geopolitical tensions.
Cash Outflow
Net operating cash outflow was RMB4 billion in Q1.
Company Guidance
During the first quarter of 2025, KE Holdings Inc. reported a 34% year-over-year increase in platform GTV, reaching RMB844.2 billion, and a 42.4% rise in net revenue to RMB23.3 billion. The company's GAAP net income surged by 97.9% to RMB855 million, while non-GAAP net income remained stable at RMB1.39 billion. The existing home transaction business experienced a GTV increase of 28% year-over-year, and new home transactions saw a 53% GTV growth, outperforming the industry which reported a slight decline. The number of active stores grew to over 55,200, with a 23% increase in active agents. The contribution margin for new home transactions increased by 1.1 percentage points year-over-year to 23.4%, despite a sequential decline due to seasonality. KE Holdings also emphasized the role of AI in improving efficiency, with tools like the AI-powered home seeking assistant and agent assistant enhancing customer service and operational productivity. The company remains cautiously optimistic about the market outlook, focusing on efficiency and AI-driven growth while continuing its active shareholder returns strategy.

KE Holdings, Inc. Class A Financial Statement Overview

Summary
KE Holdings demonstrates strong revenue growth and effective cash flow management, though profitability margins and equity returns have weakened. The increased leverage reflects a more aggressive financing approach, potentially elevating financial risk. The company remains financially stable, but strategies to improve profitability and manage leverage will be crucial for future growth.
Income Statement
75
Positive
KE Holdings has shown a strong revenue growth from 2023 to 2024, with a Revenue Growth Rate of approximately 20.14%. The Gross Profit Margin for 2024 stands at 24.55%, reflecting efficient cost management. However, the Net Profit Margin decreased to 4.35% from 7.56% in 2023, indicating declining profitability. The EBIT Margin decreased from 6.17% in 2023 to 4.03% in 2024. Despite positive revenue growth, the reduced profitability margins highlight potential challenges.
Balance Sheet
70
Positive
The company's Debt-to-Equity Ratio increased from 0.25 in 2023 to 0.32 in 2024, indicating higher leverage. The Equity Ratio decreased from 59.92% to 53.57%, suggesting a reduced proportion of equity financing. ROE dropped from 8.16% in 2023 to 5.70% in 2024, pointing to decreased efficiency in generating returns on equity. The balance sheet reflects stability but with increased leverage and reduced returns.
Cash Flow
80
Positive
KE Holdings experienced a significant decline in Operating Cash Flow, down from 11.16 billion in 2023 to 9.45 billion in 2024. The Free Cash Flow remains stable with a minimal decrease from 10.28 billion to 9.45 billion. The Operating Cash Flow to Net Income ratio is strong at 2.32, indicating good cash generation relative to profits. Despite slight declines, the overall cash flow position is robust, supporting operations effectively.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
93.46B77.78B70.55B97.32B79.20B
Gross Profit
22.94B21.72B16.03B19.07B18.95B
EBIT
3.76B4.80B-796.40M-732.96M3.46B
EBITDA
4.90B9.31B817.87M762.60M4.25B
Net Income Common Stockholders
4.06B5.88B-1.61B-631.69M2.78B
Balance SheetCash, Cash Equivalents and Short-Term Investments
52.76B53.89B68.58B68.67B77.33B
Total Assets
133.15B120.33B122.77B122.72B123.66B
Total Debt
22.65B17.99B13.69B9.19B9.47B
Net Debt
11.21B-1.65B-15.05B-23.51B-49.26B
Total Liabilities
61.70B48.13B45.24B40.69B44.47B
Stockholders Equity
71.32B72.10B77.38B81.93B79.16B
Cash FlowFree Cash Flow
8.41B10.28B8.92B2.61B9.52B
Operating Cash Flow
9.45B11.16B9.84B4.33B10.52B
Investing Cash Flow
-9.38B-3.98B-9.85B-29.99B-17.11B
Financing Cash Flow
-5.79B-6.96B-1.34B-1.29B28.82B

KE Holdings, Inc. Class A Technical Analysis

Technical Analysis Sentiment
Positive
Last Price49.55
Price Trends
50DMA
50.73
Negative
100DMA
50.97
Negative
200DMA
49.26
Positive
Market Momentum
MACD
-0.63
Negative
RSI
48.52
Neutral
STOCH
68.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2423, the sentiment is Positive. The current price of 49.55 is above the 20-day moving average (MA) of 49.35, below the 50-day MA of 50.73, and above the 200-day MA of 49.26, indicating a neutral trend. The MACD of -0.63 indicates Negative momentum. The RSI at 48.52 is Neutral, neither overbought nor oversold. The STOCH value of 68.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
HK$178.53B36.036.53%1.88%34.42%28.35%
70
Neutral
$186.12B6.719.66%6.59%9.97%-19.80%
61
Neutral
$2.83B10.910.42%8438.90%5.74%-20.95%
33
Underperform
HK$15.11B-49.73%-52.23%-42.48%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:2423
KE Holdings, Inc. Class A
49.55
8.65
21.15%
HK:1918
Sunac China Holdings
1.41
0.16
12.80%
HK:1109
China Resources Land
26.10
-1.10
-4.03%

KE Holdings, Inc. Class A Corporate Events

KE Holdings Inc. Postpones Annual General Meeting to June 27, 2025
Jun 3, 2025

KE Holdings Inc. has announced the postponement of its Annual General Meeting (AGM) originally scheduled for June 13, 2025, to June 27, 2025, due to the need for work arrangements coordination and actual conditions of the company. The venue remains unchanged, and shareholders are encouraged to submit their proxy forms or voting instructions by the specified deadlines to ensure their participation in the decision-making process.

The most recent analyst rating on (HK:2423) stock is a Buy with a HK$50.00 price target. To see the full list of analyst forecasts on KE Holdings, Inc. Class A stock, see the HK:2423 Stock Forecast page.

KE Holdings Inc. Reports Robust Q1 2025 Financial Results
May 15, 2025

KE Holdings Inc. reported a strong financial performance for the first quarter of 2025, with a 34% year-over-year increase in gross transaction value and a 42.4% rise in net revenues. The company’s net income nearly doubled, and it saw substantial growth in the number of stores and agents, reflecting the effectiveness of its growth strategy. The company also highlighted advancements in AI applications to enhance customer experience and service efficiency, positioning itself strongly in the housing transaction services market.

The most recent analyst rating on (HK:2423) stock is a Buy with a HK$50.00 price target. To see the full list of analyst forecasts on KE Holdings, Inc. Class A stock, see the HK:2423 Stock Forecast page.

KE Holdings Inc. Schedules Board Meeting and Earnings Call for Q1 2025 Results
Apr 30, 2025

KE Holdings Inc. has announced a board meeting scheduled for May 15, 2025, to review and approve the company’s unaudited financial results for the first quarter of 2025. The company will also host an earnings conference call on the same day, providing stakeholders with insights into its financial performance and strategic direction.

KE Holdings Inc. Files Annual Report for Fiscal Year 2024
Apr 17, 2025

KE Holdings Inc. has announced the filing of its annual report on Form 20-F for the fiscal year ending December 31, 2024, with the U.S. Securities and Exchange Commission. This filing is a regulatory requirement and provides stakeholders with detailed financial and operational information about the company’s performance over the past year, which could impact its market positioning and investor relations.

KE Holdings CEO Donates Shares for Social Initiatives
Apr 17, 2025

KE Holdings Inc. announced that its chairman and CEO, Mr. Yongdong Peng, plans to donate 9,000,000 Class A ordinary shares. The proceeds will support healthcare benefits for service providers in the housing industry and rental support for tenant groups, including fresh graduates. This move underscores the company’s commitment to social responsibility while maintaining Mr. Peng’s position as a controlling shareholder.

KE Holdings Inc. Announces 2025 Annual General Meeting
Apr 17, 2025

KE Holdings Inc. has announced its upcoming Annual General Meeting (AGM) scheduled for June 13, 2025, in Beijing. The meeting will address several key resolutions, including the adoption of the company’s audited financial statements for 2024, the re-election of directors, and the authorization for the board to issue additional Class A ordinary shares. These resolutions aim to strengthen the company’s governance and financial flexibility, potentially impacting its market positioning and stakeholder interests.

KE Holdings Inc. Grants RSUs to Employees Under 2020 Share Incentive Plan
Mar 31, 2025

KE Holdings Inc. announced the grant of 3,646,308 restricted share units (RSUs) to 53 employees as part of its 2020 Share Incentive Plan. This move aims to align the interests of employees with shareholders and incentivize performance, with a mixed vesting schedule over 48 months. The grant does not require shareholder approval and includes immediate vesting for a portion of the RSUs to quickly motivate employees, potentially impacting the company’s operational efficiency and employee engagement positively.

KE Holdings Grants RSUs to Independent Director
Mar 26, 2025

KE Holdings, Inc., a company incorporated in the Cayman Islands, has announced the grant of 11,622 Restricted Share Units (RSUs) to Mr. Jun Wu, an independent non-executive director, under its 2020 Share Incentive Plan. This grant is part of Mr. Wu’s remuneration package and aligns with corporate governance best practices, as it does not include performance targets to maintain the director’s objectivity and independence. The RSUs will fully vest on the first anniversary of the grant date, and clawback mechanisms are in place should Mr. Wu’s service be terminated for cause.

KE Holdings Reports 2024 Financial Results with Increased Revenue and Operational Growth
Mar 18, 2025

KE Holdings Inc. reported its unaudited financial results for the year ended December 31, 2024, showing a 6.6% increase in gross transaction value to RMB3,349.4 billion. Despite a rise in net revenues by 20.2% to RMB93.5 billion, the company’s net income decreased to RMB4,078 million from RMB5,890 million in 2023. The company also saw significant growth in its operational metrics, with a 17.7% increase in the number of stores and a 16.9% increase in the number of agents. The announcement highlights the company’s robust performance in existing home transactions and home renovation services, while new home transactions saw a slight decline.

KE Holdings Inc. Declares Final Cash Dividend for 2024
Mar 18, 2025

KE Holdings Inc. has announced a final cash dividend of USD 0.12 per share for the financial year ending December 31, 2024. The dividend will be paid on April 22, 2025, with the record date set for April 9, 2025. This announcement reflects the company’s financial stability and commitment to returning value to its shareholders, potentially enhancing its attractiveness to investors.

KE Holdings Reports Growth in Transactions and Platform Activity for FY 2024
Mar 18, 2025

KE Holdings Inc. announced its unaudited financial results for the fourth quarter and fiscal year 2024, reporting a 6.6% year-over-year increase in gross transaction value (GTV) to RMB3,349.4 billion. Despite a decrease in net income by 30.8% year-over-year, the company saw significant growth in its platform’s activity, with a 17.7% increase in the number of stores and a 16.9% rise in the number of agents. The announcement also included a final cash dividend, reflecting the company’s commitment to returning value to shareholders.

KE Holdings Expands Market Reach with Stock Connect Inclusion
Mar 10, 2025

KE Holdings Inc., a company incorporated in the Cayman Islands, has announced the inclusion of its Class A ordinary shares in the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs. This development, effective March 10, 2025, allows eligible investors in Mainland China to directly trade the company’s shares, potentially expanding its investor base and improving trading liquidity. The move is expected to enhance the company’s market presence in Mainland China and share its growth prospects with a broader range of investors.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.