The proportion of second-hand home transactions is rapidly increasing. Will Beike deliver more value?

The real estate market is recovering, and with the successful rollout of its “One Body, Three Wings” strategy, KE Holdings has delivered solid performance.

Recently, KE Holdings released its 2025 first-quarter earnings data, continuing the growth trend seen in the second half of last year. In the first quarter, it achieved total transaction value (GTV) of RMB 843.7 billion, up 34.0% year over year; net revenues of RMB 23.3 billion, up 42.4% year over year; and net profit of RMB 855M.

Specifically, KE Holdings’ operations show many highlights. First, the transaction value of its second-hand housing and new housing businesses is significantly higher than the market average, demonstrating the competitiveness of leading companies. Second, its property leasing and home renovation and furnishing businesses have grown rapidly, becoming a new growth engine.

Brokerage Business Delivers High Growth; Non-Property Transaction Services Become a “Second Growth Curve”

Brokerage is KE Holdings’ core business, and since the second half of last year it has continued to perform above expectations.

In the first quarter’s total transaction value of RMB 843.7 billion, transaction value from inventory properties was RMB 580.3 billion, up 28.1% year over year; and transaction value from new homes was RMB 232.2 billion, up 53% year over year. It is worth noting that this performance was achieved amid fluctuations in real estate sales. According to data from CREATR/China Index Academy (CRIC), in the first quarter, total sales revenue of Top 100 developers declined by about 7% year over year.

A large part of KE Holdings’ ability to withstand cyclical fluctuations comes from improved operating efficiency. On the one hand, the company increases its investment in AI technology and rolls out multiple application tools, covering both B-end and C-end users.

Among them, its AI home-finding assistant “Budding” is for users; its AI deep reasoning capabilities combined with real, verified property listing data can better understand users’ needs for finding a home, and intelligently recommend suitable listings, providing users with smart, efficient home-finding products. The customer-sourcing side assistant “Lai Ke” is for real estate agents, improving customer communication efficiency and increasing deal conversion rates.

In addition, to improve shop-to-client efficiency, KE Holdings, on the one hand, helps drive the transmission and circulation of property listings by enhancing internal fine-grained management—using tools such as the landlord workbench and an AI intelligent listing promotion assistant, as well as offline listing-focused meetings. On the other hand, it incentivizes landlords to grow upward and strengthen cross-shop cooperation through platform operational mechanisms, such as a points-based benefits system and a regional co-governance council.

In the first quarter, the company’s GTV per shop and GTV per capita increased by 8% and 14% year over year, respectively, indicating improvements in both productivity and shop efficiency. At the same time, the inventory shop churn rate fell to 2.9%, down 6% quarter over quarter and down 38% year over year. Meanwhile, the six-month retention rate of newly connected shops in the first half of 2024 reached 94%.

Next, looking at the non-property transaction services business: in the first quarter, net revenues increased 46.2% year over year, and its share of total net revenues reached 35.9%. It has already become a truly legitimate second growth curve.

Among them, its home renovation and home furnishing business generated net revenues of RMB 2.9 billion, up 22.3% year over year. At the same time, the business’s contribution profit margin reached a historical high of 32.6%, up 2 percentage points year over year.

For property leasing service revenues, in the first quarter net revenues reached RMB 5.1 billion, up 93.8%. According to the information disclosed by the company, as of the end of the first quarter, the number of managed listings exceeded 0.5 million units, of which “Sheng Xin Zu” accounted for more than 0.49 million units.

In 2023, KE Holdings established the “One Body, Three Wings” strategy: “One Body” refers to new home and second-hand home transactions; and “Three Wings” refers to full renovation/turnkey decoration, leasing, and Beihome (Be Hao Jia) business. Notably, since the home renovation business was launched in 2021, it achieved rapid growth immediately after launch, and the property leasing business has also shown strong growth potential. For KE Holdings, successfully opening up a second growth curve for non-property transaction services beyond its main real estate brokerage business helps increase the company’s earnings resilience.

The Inventory Housing Era Has Arrived; Improving Operating Quality Is Key

With improvements in operating efficiency, KE Holdings’ profitability is also increasing. According to the company’s disclosure, in the first quarter of this year, operating expenses were RMB 4.2 billion, down 31.3% quarter over quarter, and adjusted net profit reached RMB 1.39B.

In fact, after several years of adjustments, the contribution profit margins of KE Holdings’ second-hand and new housing businesses have become relatively stable. Meanwhile, as the contribution profit margin of its home renovation business rises, and as the property leasing business and Beihome business develop, improving operating quality is highly likely.

KE Holdings’ Executive Director and Chief Financial Officer Xu Tao said, “While ensuring that cost and expenses are reasonably managed and controlled, we will continue to support the long-term development of our business and fully back the ‘One Body, Three Wings’ strategic initiatives.”

In the first quarter of this year, KE Holdings’ cash on the balance sheet reached RMB 12.77B, up nearly 12% from the beginning of the period. In 2024, the total dividends paid to shareholders by the company were approximately USD 400 million. At the same time, it spent approximately USD 716 million in total on share repurchases, with the number of shares repurchased representing approximately 3.9% of the total issued share capital as of the end of 2023, and all were canceled. Large-scale repurchase and cancellation reflects management’s confidence in future development, and is also the fulfillment of its commitment to return value to shareholders.

From the industry as a whole, since September 2024, a package of policies has driven a recovery in the real estate market, and both transaction volume and the number of home viewings have increased noticeably. In 2025, the main theme for the real estate industry remains “stabilizing and turning around after falling.”

As a leading domestic real estate brokerage platform, KE Holdings is expected to benefit directly from the industry’s recovery. More importantly, as the pace of urbanization slows, the real estate sales market has started to enter the inventory era, which directly benefits KE Holdings.

According to research report information from Founder Securities (GF Securities), over the past four years, the share of second-hand home transactions nationwide has risen rapidly, reaching a historical peak of 46% by the end of 2024, indicating that the second-hand housing market is gradually becoming an important part of the real estate market. In addition, with increasing inventory disposal pressure on developers, KE Holdings will also have greater room to realize its value.

Regarding future development, Peng Yongdong, Co-founder, Chairman, and Chief Executive Officer of KE Holdings, said, “Looking ahead, we are full of confidence in the company’s long-term development under the ‘One Body, Three Wings’ strategy, and we will remain firmly committed to continued investment in AI applications.”

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Responsible editor: Wang Yong