BEKE(BEKE)2024-05-24 00:08Financial Data and Key Metrics Changes - In Q1 2024, revenue reached RMB 16.4 billion, down from RMB 20.3 billion in the same period last year, representing a year-over-year decline of 19.2% [18] - Gross margin decreased to 25.2% from 31.3% year-over-year [18] - GAAP net income was RMB 432 million, a significant drop from RMB 2.75 billion in Q1 2023 [28] - Non-GAAP net income also fell to RMB 1.39 billion from RMB 3.56 billion year-over-year [28] Business Line Data and Key Metrics Changes - Revenue from existing home transactions was RMB 5.7 billion, down 37.6% year-over-year, with GTV at RMB 453.2 billion, down 31.8% [19] - New home transaction revenue was RMB 4.9 billion, a decline of 41.5% year-over-year, with GTV at RMB 151.8 billion, down 45.4% [21] - Home renovation and furniture business revenue grew by 71.1% year-over-year to RMB 2.4 billion, with contracted sales reaching RMB 3.4 billion, up 26.1% [22] - Home rental services revenue surged by 189.3% year-over-year to RMB 2.6 billion, with over 250,000 units managed [25][63] Market Data and Key Metrics Changes - The overall housing market saw a year-over-year decline in Q1, but some cities experienced transaction volume increases compared to the same period last year [17] - The new home market remains sluggish, with sales from the top 100 developers down nearly 50% year-over-year [21] - Existing home transaction volume on the platform increased by 14% year-over-year in April, indicating a recovery trend [35] Company Strategy and Development Direction - The company is focusing on enhancing the quality and efficiency of its housing transaction business, actively connecting with high-quality brands and agents [46] - A strategic expansion of connected stores is underway, with over 1,000 new stores added, maintaining a high retention rate [46] - The company aims to improve customer acquisition through innovative online content and service models, including live streaming and short videos [40][42] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the existing home market, while acknowledging the ongoing challenges in the new home market [33] - Positive government policies aimed at stimulating demand and reducing inventory are expected to support market recovery [34][56] - The company anticipates improved liquidity in the new home market and a gradual recovery in market confidence [33] Other Important Information - The company has allocated USD 220 million towards share repurchase in Q1 2024, with total cash liquidity reaching RMB 75.6 billion [29] - The company is committed to enhancing shareholder returns and optimizing capital operations despite challenging market conditions [30] Q&A Session Summary Question: Views on recent policies and market outlook - Management noted that despite price adjustments, transaction volumes in the existing home market remain stable, with some cities exceeding expectations [33] - The new home market is sluggish, but policies aimed at inventory reduction are expected to improve liquidity and market sentiment [34] Question: Customer acquisition channels and online traffic efficiency - The company is focusing on building online infrastructure and enhancing customer connection methods through live streaming and short videos [40] - New service models are being developed to better understand and meet customer needs [40] Question: Investments in core home transition business - The company is focused on growth with enhanced quality and efficiency, connecting with more high-quality brands and agents [46] - The number of active stores increased by 1.4% compared to the previous quarter, with a high retention rate for newly connected stores [46] Question: Outlook for new home sales - The new home market remains tough, but the company believes it will show resilience due to improved channel service capabilities and strategic partnerships with developers [50][51] Question: Home replacement policies and overall housing demand - Management views the government’s destocking policies as positive for market sentiment and liquidity, with Beike actively promoting old-for-new models [56][58] Question: Progress in decoration and window home services - The home renovation and furniture business achieved strong growth, with significant improvements in customer acquisition and delivery capabilities [60][62]