The Zhitong Finance App learned that BEKE.US (BEKE.US) recently held a performance exchange meeting for the first quarter of 2024. At the meeting, the company said that although second-hand housing prices are still being adjusted, the overall transaction volume is relatively stable, and performance in some cities has exceeded expectations. Let's be relatively optimistic about the volume of second-hand housing transactions in the future. The new housing market is still showing weak supply and demand. In January-April, the sales volume of Kerry's top 100 real estate companies was -47%, which is at an all-time low.

Referring to the One Track business market, Shell said that the main line of the One Track business this year is the growth of quality and efficiency, and actively establish connections with more high-quality brand stores and agents. The company began actively promoting store networking in September of last year. At the end of Q1, the number of active stores increased 1.4% month-on-month, and the number of newly contracted stores in Q1 reached more than 1,000, including stores under construction. The retention rate of the newly connected stores remained high at about 98% within 90 days of being connected, which indicates that the company's market penetration rate continues to increase, especially in cities such as Ningbo and Yantai.

Q&A

Q: Recent market activity and trends? How to determine the volume trend in the second half of the year?

A: Although second-hand housing prices are still being adjusted, the overall transaction volume is relatively stable, and performance in some cities has exceeded expectations. Let's be relatively optimistic about the volume of second-hand housing transactions in the future. At the same time, we see that the new housing market is indeed facing more challenges, and with the determination of policy directions such as inventory removal, we expect that new supply-side liquidity will improve in the future, and market confidence will be further boosted.

On the policy side, policies can be divided into three categories: 1) further releasing and attracting purchasing power. Cities such as Hangzhou, Chengdu, and Shenzhen abolish or optimize purchase restriction policies and recently abolish lower mortgage interest rate limits; 2) absorb stock through trade-ins or government acquisitions; 3) optimize the supply of new housing, such as limiting the supply of residential land in some high-inventory areas.

The introduction of the policy has had a certain supporting effect on the second-hand housing market. Although GTV in the second-hand housing market since the beginning of 2023 falls short of the high base figure brought about by last year's Q1 due to the release of backlog demand, the month-on-month trend has been relatively stable. From the trading recovery in Xiaoyangchun in March and the normal seasonal correction trend in April, there was no rapid decline in the number of second-hand orders on the platform in April during the same period last year, with a year-on-year increase of 14%. The increase was relatively clear in cities such as Shanghai, Shenzhen, Nanjing, Hangzhou, Changsha, Wuhan, and Xiamen.

Judging from recent trends, the number of weekly trading orders did not continue to decline month-on-month. The number of second-hand orders on the platform increased by more than 20% year-on-year in the first three weeks of May, and the transaction volume increased by more than 10% year-on-year, which is higher than the level of decline from a high level in the same period last year. On the other hand, second-hand housing prices are still being adjusted in depth, and the market is in a state where price is exchanged for volume. The absolute value of viewing in April was higher than last year's average, and customers are still seeking to enter the market. Since this year, the 50 key cities have been stable month-on-month, and there has been no surge after policy relaxation last year, which indicates that everyone is becoming more rational in their mentality.

Judging from the transaction structure, the share of new home buyers increased from 30% to 35%. After the housing price adjustment+ policy was implemented, the entry threshold for customers who needed to enroll and settle in was lowered; at the same time, due to insufficient effective supply of new homes and the trend of luxury homes, some first-time buyers were pushed out of the new housing market.

The new housing market is still showing weak supply and demand. In January-April, the sales volume of Kerry's top 100 real estate companies was -47%, which is at an all-time low. Demand for new housing continues to show improvements and characteristics of large customer groups. The Central Index shows that the proportion of four-bedroom or more units in key cities has increased from 21% to 25%, and demand for other types has been diverted to the second-hand market. On the supply side, developers have adopted a procyclical strategy to acquire land and reduce sales, so the new housing market is insufficient to add effective supply, and at the same time, inventories are high. According to Kerry data, as of 24Q1, the new home removal cycle was extended to 24.4 months.

Q: What is the strategy for diversifying online customer acquisition channels?

A: One of the key directions we are exploring this year is building infrastructure and business opportunity traffic for online clients. We have launched new online roles for service providers, including live streaming house selectors, etc., to help them build personal IPs and attract users. One of our initiatives is to establish the Galaxy Project to create and nurture store owners on the platform to become new media experts, and help everyone create personal live broadcasts to gain customers on external platforms. Currently, the Galaxy Project has covered 63 cities across the country, empowered more than 12,000 people, and the celebrity fan matrix has exceeded 10 million. Among them, more than 600 agents have more than 10,000 fans. In Q1 2024, the total number of orders sold by Galaxy Talent through new media exceeded 2,000, an increase of 103% over last year's Q1.

Q: What are the key investment priorities of the track business and how to measure the impact of the investment? The company focuses on improving the scope of networking. Will the increase in new online stores affect the company's efficiency?

A: The main line of the One Track business this year is the growth of quality and efficiency, and actively connecting with more high-quality brand stores and agents. We began actively promoting store networking in September of last year. At the end of Q1, the number of active stores increased 1.4% month-on-month, and the number of newly signed stores in Q1 reached more than 1,000, including stores under construction. The retention rate of new online stores remained high at around 98% within 90 days of being connected, which shows that our market penetration rate continues to increase, particularly in cities such as Ningbo and Yantai.

In terms of measuring effectiveness, although the average number of new online stores is lower than that of inventory stores, they have maintained a steady increase and efficiency is climbing rapidly. Starting in September of last year, the cash revenue of new online stores increased by about 100% during the half-year operation period up to March of this year. Furthermore, at the end of March this year, this batch of new online stores reached more than 90% of the human efficiency of the platform's inventory stores. At the same time, among new online stores, some small-scale stores, such as small stores for couples with about 2 people, are about 16% more efficient than the average manpower efficiency of new online stores during the same period due to their deep cultivation of the community. These highly competitive small stores inspire us to further connect various types of stores, enhance the platform's ability to serve them, and carry out hierarchical management and operation of stores in a more refined manner. Our overall investment in store expansion also paid off quite well. From a platform perspective, the ROI of newly signed stores in 2023Q4 was positive until March of this year.

In terms of investment strategies to support scale growth, we are also very cautious. It is based more on industry support, such as providing entrance decoration business development, etc., rather than simply increasing the form of employees to ensure investment flexibility and business streamlining.

Q: What are the prospects for the new housing business?

A: Despite pressure on the overall new housing market, the 24Q1 GTV for new homes reached 151.8 billion yuan, down 45% year on year, but better than the market average; new housing revenue was 4.92 billion yuan, down 41.5% year on year, a relatively small drop, showing our ability to monetize during the market downturn.

Channel coverage capacity results: The number of developers that have signed up for total strategic cooperation by New Housing Corporation increased by 20% over the same period last year, and the quality of cooperation continues to improve. Strategic cooperation has been reached with the core large central enterprises and 6 of the top 10 top 100 housing enterprises, which has helped to actively expand our regional business.

Breakthrough in terms of cooperation: It includes not only the strategic approach of the past, but also a guarantee clause that guarantees repayment coverage, which guarantees better cash payments in the new housing business. Channel coverage and elimination capacity: Q1 Our cooperative project coverage rate reached 55%, an increase of 25% over the same period last year, which provided us with a more stable supply of new homes.

In terms of channel elimination capabilities, we are exploring innovative product service models for selling old and buying new products by linking a second-hand business. At the same time, starting from customer needs, we have launched a safe and secure provincial hardcover service, linking developers, banks and other resources to promote new home sales and solve customer home buying problems.

In terms of operation, we strictly abide by the bottom line of risk management and control. The turnaround time of accounts receivable for new homes in Q1 was 69 days. The proportion of projects participating in quick commission remained high at 46%, and the share of revenue from central enterprise developers was about 50%.

Q: What is the impact of the trade-in policy on seashells? How can companies get involved?

A: At present, we see that relevant supporting policies are still being formed. For example, the central bank will provide 300 billion yuan in reloans to support local purchases of some commercial housing for affordable housing. The scope and effects of the implementation of the policy need to be observed. More than 60 cities have introduced housing trade-in policies. Overall, it can be divided into an intermediary priority housing sales model and a government-led model. The latter includes the provision of subsidies or the purchase of old houses through state-owned enterprise platforms or developers.

The intermediary priority housing sales model is where the housing enterprise signs an agreement with the buyer, the intermediary promotes the old house, and the buyer locks in the intended new home. As early as 2022, we pioneered this trade-in model by partnering with local developers and platform stores in Qingdao, and brought innovative practices to the local government for active transactions. Other industry associations are also inspired by, and referred to, and promoted by the Qingdao model. In 23 years, we completed close to 200 orders under the trade-in model in Qingdao, and these potentially silent customers were activated under this innovative model. Currently, this model is called “worry-free exchange” and has been implemented in 12 cities across the country.

Q: What are the highlights and latest developments in the home improvement business?

A: The home improvement business achieved a contract amount of 3.39 billion yuan in Q1, +26% year over year, revenue of 2.41 billion yuan, and +71% year over year, of which the total contract amount in March was 2 billion yuan, +53%; the contract amount in Beijing reached a record high; the proportion of Q1 track agents contributed to the contract amount reached a record high. Thanks to increased capacity and stronger back-end delivery capacity. The core driving force is the integration of the first and second tracks. The organizational structure was aligned in 23 years. Each home improvement division has a track store docking and cooperation, so customers can obtain decoration plans before the housing transaction. In terms of delivery capacity development, the company's managed delivery cycle reached about 104 days in the first quarter, a decrease of about 18 days compared to the same period last year. This year, we will focus on improving quality on the basis of ensuring steady growth in the scale of our business. Through one-stop butler service and online butler quality control, we plan to prevent problems in advance, reduce the frequency of problems, and improve customer satisfaction.

The Q1 revenue from housing rental services was 2.63 billion yuan, +189.3%. Thanks to the increase in the scale of management, the number of affordable rental units managed exceeded 240,000 units (more than 90,000 units in the same period last year), and long-term rental companies managed more than 11,000 units (7,000 units in the same period last year). The occupancy rate of the worry-free rental model was 96.5%, +2.7 percentage points compared to the same period last year; the occupancy rate for self-operated apartments for less than 6 months increased by about 3.8 percentage points to 94.8% over the same period last year. By increasing the coverage of low-risk and worry-free rental models and centralizing a number of long-term vacant properties, we have drastically reduced the risk of vacancies.