On June 26th of this year, Beijing announced the implementation of the "517" policy, which includes multiple optimization measures such as reducing down payments and interest rates, and has stimulated market warming. According to the latest data from the official website of the Beijing Municipal Commission of Housing and Urban-Rural Development (BJCHUD), the number of second-hand housing transactions in Beijing in August was 14,363 sets, a decrease of 7.8% compared to the previous month but an increase of 31% compared to the same period last year. Especially in July, the number of second-hand housing transactions in Beijing reached 15,575 sets, an increase of 3.92% compared to the previous month and a significant increase of about 60% compared to the same period last year. This is also the first time since March of last year that the monthly number of second-hand housing transactions in Beijing exceeded 150,000 sets, reaching a record high in nearly 16 months. Many industry insiders believe that with the gradual release of policy effects and the arrival of the market transaction cycle, it is expected that in September and October, market activity will rebound slightly in the short term and transaction volume will also experience more significant increments.
Recently, KE Holdings, a technology-driven one-stop new housing service platform (NYSE:BEKE;HKEX:2423), released its second-quarter financial results for 2024. Under the guidance of the "one body and three wings" strategy, during the reporting period, KE Holdings achieved a total transaction volume (GTV) of 839 billion yuan (RMB), with a net income of 23.4 billion yuan, a year-on-year increase of 19.9%. The gross margin was 27.9%, and the net profit reached 1.9 billion yuan, a year-on-year increase of 46.2%. The adjusted net profit reached 2.69 billion yuan, a year-on-year increase of 13.9%.
As the market as a whole shows a gradual recovery trend, the volume of transactions in the second-hand housing market has significantly increased, and KE Holdings' existing housing inventory has achieved results beyond expectations. In the second quarter, KE Holdings' GTV for existing housing reached 570.7 billion yuan, a year-on-year increase of 25%, and its net income was 7.3 billion yuan, a year-on-year increase of 14.3%. The profit margin contributed by existing housing was 47.5%, an increase of 1.9 percentage points compared to the same period last year.
As of the end of the second quarter, KE Holdings had a total of 44,423 active branches, an increase of 8.1% compared to the same period last year, with a total of 411,478 active agents. For new networked branches, KE Holdings provides fee discounts or installment support to the corresponding brands to stimulate the potential of new connected branches. In the first half of the year, the retention rate of new branches after 6 months reached 93%.
In terms of new homes, the adjustment range of the new housing market has narrowed compared to the same period last year, and KE Holdings' performance has significantly outperformed the industry average.
During the reporting period, the GTV of KE Holdings' new home business reached 235.3 billion yuan, and the amount of new home signings and transactions in June achieved a year-on-year increase of 12%, outperforming the industry. The net income was 7.9 billion yuan, only a decrease of 8.8% compared to the same period last year.
In terms of channel cooperation, KE Holdings continues to deepen its strategic cooperation with core state-owned enterprises and high-quality leading real estate companies. The "Fast Commission" project accounts for 49% of the business, and the turnover days of accounts receivable for new homes is 45 days. In terms of sales clearance, KE Holdings shortens the clearance cycle through technological product tools and refined operations, focusing on precise matching of tenants and accelerating the clearance process.
With the validation of KE Holdings' home decoration and rental business capabilities and models in the market, during the reporting period, the company's non-real estate transaction service revenue increased by 85.3% year-on-year, accounting for approximately 35%, a significant increase of 12.2 percentage points compared to the same period last year.
In the second quarter, the home improvement and home furnishing business achieved a contract amount of 4.2 billion yuan, a year-on-year growth of 22.3%. The net income was 4 billion yuan, a year-on-year growth of 53.9%. The profit contribution rate of the home improvement and home furnishing business reached 31.3%. In terms of delivery capability optimization, Ke Holdings shortened the construction period by improving the efficiency of dispatching orders and refining the construction process. In the second quarter, the base construction period plus the main material construction period was about 100 days, compared to about 111 days in the same period last year.
While the home improvement business maintains steady growth, Ke Holdings' house rental & leasing services business has continued to grow rapidly thanks to the rapid increase in the number of properties under management. It achieved a net income of 3.2 billion yuan, a year-on-year growth of 167.1%.
As of the end of the second quarter, Ke Holdings' worry-free rental services have surpassed 0.3 million properties under management, and there are more than 0.014 million properties under management in centrally-managed long-term rental apartments. Despite various cost pre-accounting measures, Beijing achieved a balanced profit and loss for the first half of the year, which has brought valuable confidence to the business development.
Xu Tao, Executive Director and Chief Financial Officer of Ke Holdings, said: "Our performance in the second quarter once again demonstrated our strong execution capability and market outperformance in a relatively stable market environment. The monetization capability of new home transactions has been further enhanced, the profit contribution rate of existing home transactions has significantly increased, and the non-property transaction services business has grown rapidly. With the support of refined operation, profitability has also been significantly improved."