Performance Stays Steady New Business Engines

BEIJING AND HONG KONG MAY 23RD, 2024/NEWSMAGE/ -- A TECHNOLOGY-DRIVEN ONE-STOP NEW RESIDENCE SERVICE PLATFORMShell Holdings Limited(NYSE Code:BEKEAND HKEX CODE:2423，“Shell”or“Company”) Announced the results for the first quarter ended March 31, 2024, with net revenue of RMB 164 billion (RMB below), exceeding market expectations and adjusted net profit of RMB 13.92 billion. Among them, the success of the new strategic business of “Three Wings” was significant, with net income from furnished homes of $24 billion, up 71.1 percent year-on-year, and rental service revenue of $26 billion, a significant increase of 189.3 percent year-on-year. Shell's non-property transaction services business grew rapidly in the first quarter, with revenues growing by 112.9% year-on-year, up 21.7 percentage points to 35%, the second growth curve showed.

During the reporting period, Shell continued to increase shareholder returns, optimised its capital structure and improved capital operating efficiency. Since this year, Shell has invested more than $3.4 billion in share repurchases, accounting for nearly 2% of the company's total share capital issued at the time of the repurchase program at the company's shareholders' meeting. Since the launch of Shell's share repurchase in September 2022, Shell has repurchased approximately US$12.54 million in shares representing approximately 6.77% of the total share capital. Shell recently completed its final 2023 cash dividend, with a total dividend paid of approximately $4 billion.

During the period, the stock housing market was stable, with the introduction of optimisation policies throughout the city, and the needy groups actively entered the market following the reduction in mortgage rates and price adjustments. The demand for new housing shifted to the second-hand market, and those wishing to invest more tend to live in second-hand homes. Shell's first-quarter inventory room business traded at $4,532 billion, net revenue reached $57.3 billion, and inventory room contributed 44.5%, which remained stable on a quarterly basis. In terms of new housing business, Shell continues to refine new home operations to effectively control risks. New home business transactions reached $1,518 billion and net revenue was $49.2 billion.

To respond to new opportunities for market transformation, Shell understands changing customer needs and continuously focuses on service quality and efficiency, and enhances the capacity of its real estate transaction services business. By the end of the quarter, Shell had established a larger nationwide property MCN matrix with nearly 3 million followers, accumulated support for more than 1.2 million stores, and brokers converted customers on new media platforms through short videos and live broadcasts, helping service providers better understand customer needs and help customers to make online room selection more efficient and enhancement of the experience.

At the store operating level, the platform has 42,593 active stores, an increase of nearly 3,000 stores compared to the same period last year. In terms of operating performance, the quality and efficiency of the new connected stores exceeded expectations. In the second half of last year, the efficiency of the new signing stores increased to more than 90% of the capacity of the platform stock door in the second half of last year.

At the same time, Shell is trying multi-level store innovations based on brokers and stores in the Zagane community, gradually building a one-stop residential service entrance, offering not only housing transactions, but bringing new services around the concept of “home”, opening up more possibilities. In Shanghai, chains in the form of “mini-service points” reach deeply into the community and discover customer needs. Shell is promoting a one-stop service model across the country. For example, in the Shell Signing Service Center, owners can complete loan approvals, tax payments, mortgage registration, transfer registration, etc. in one stop shop, and print and receive real estate certificates on the spot, so they can be more secure.

Since last year, Shell has continued to promote the “One Three Wing” strategy, insisting on a stable expansion of the user group under the premise of ensuring the quality of delivery, and the home furnishing and rental business has made significant progress. Contracts for furnished homes reached $34 billion in the first quarter, an increase of 26.1% year-on-year. At the same time, the furniture business was more diverse, including new retail contracts worth $9.4 billion, including custom furniture and soft furnishings, contributing approximately 27.8%, up 5.1 percentage points year-on-year.

Shell has always focused on quality of living, and the scale and importance of its rental services business continues to grow. Revenues from home rental services grew rapidly in the first quarter, mainly driven by the rapid increase in pipeline size. As of end-March, the distributed rental housing management operating service “Thrifty Rent” exceeded 24 million units in pipeline housing and more than 1.1 million units of centralized long-term rental apartments in pipe size.

Shell Co-Founder, Chairman of the Board, CEO Peng Yongdong said: “With the stock market playing a more important role, China's real estate industry is accelerating its transformation into a new era. With quality and efficiency at our core, we are trying new things in multiple business areas. We actively connect industry quality stores, and also innovate the community mini-online store model in Shanghai chains, significantly strengthening the community roots and service capabilities, gradually building an infrastructure of one-stop residential services. We deeply explore customer needs and have made many new attempts to improve online and offline service capabilities in real estate transactions and new businesses. Against the backdrop of changing times, we embrace greater new possibilities to positively address customer experience at the core.”

Shell Executive Director and Chief Financial Officer Xu Tao said: “The property market declined year-on-year in the quarter, mainly due to the impact of high underlying data releases concentrated in demand suppressed by the pandemic at the beginning of last year. However, compared to the normalized quarterly market performance, the second-hand market in the first quarter of this year was more stable. We are actively promoting the “One-stop Tri-Wing” strategy, and the “One-Stop New Residence Service Platform” model will become even more apparent. “This year, we will strengthen our strategic fundamentals, leverage our outstanding financial management capabilities, manage risk, help our business achieve long-term growth, and continue to enhance shareholder returns to deliver long-term shareholder value to investors.”