KE Holdings Inc. (“Beike” or the “Company”) (NYSE:
BEKE and HKEX: 2423), a leading integrated online and offline
platform for housing transactions and services, today announced its
unaudited financial results for the first quarter ended March 31,
2023.
Business and Financial Highlights for the First Quarter
2023
- Gross transaction value (GTV)1 was RMB971.5 billion
(US$141.5 billion), an increase of 65.8% year-over-year. GTV of
existing home transactions was RMB664.3 billion (US$96.7
billion), an increase of 77.6% year-over-year. GTV of new home
transactions was RMB277.9 billion (US$40.5 billion), an
increase of 44.2% year-over-year. GTV of home renovation and
furnishing was RMB2.7 billion (US$0.4 billion), compared to
RMB0.2 billion in the same period of 2022. GTV of emerging and
other services was RMB26.7 billion (US$3.9 billion), an
increase of 40.6% year-over-year.
- Net revenues were RMB20.3 billion (US$3.0 billion), an
increase of 61.6% year-over-year.
- Net income was RMB2,750 million (US$400 million).
Adjusted net income2 was RMB3,561 million (US$519
million).
- Number of stores was 41,275 as of March 31, 2023, a 9.8%
decrease from one year ago. Number of active stores3 was
39,622 as of March 31, 2023, a 7.8% decrease from one year
ago.
- Number of agents was 435,780 as of March 31, 2023, a
2.0% increase from one year ago. Number of active agents4
was 411,526 as of March 31, 2023, a 7.8% increase from one year
ago.
- Mobile monthly active users (MAU)5 averaged 45.4 million
in the first quarter of 2023, compared to 39.7 million in the same
period of 2022.
Mr. Stanley Yongdong Peng, Chairman of the Board and Chief
Executive Officer of Beike, commented, “We are pleased to see a
strong rebound emerging in the real estate market in China along
with improving macroeconomic conditions. During the market’s
recovery in the first quarter of 2023, we significantly outpaced
the industry in GTV growth of both existing and new home
transactions. Our outstanding performance was empowered by our
hallmark advantages in ACN and our persistent support to service
providers in good and tough times, as well as our efforts to
transform to high-quality growth.”
“Looking to the future, we will unremittingly seek development
and growth, fueled by our mission of ‘Admirable Service, Joyful
Living,’ and driven by the unfilled needs of consumers in the
residential services sector that we aspire to meet. Today, many
consumers still yearn for higher quality homes and housing-related
products and services. These needs are the mountain we set out to
climb over the coming decade. We will continue to improve our
capabilities to achieve development. We will strengthen our ACN to
enhance collaboration and service quality and provide increased
coverage of housing services. We will cultivate stronger brands
while aiming to enhance the efficiency of our stores and service
providers through better platform operations and technology
advancement. Most importantly, we will never lose sight of our
enduring commitment to doing the right thing and taking care of
customers, which has rewarded us with positive feedback and will
continue to inspire us to unceasingly move forward,” concluded Mr.
Peng.
Mr. Tao Xu, Executive Director and Chief Financial Officer of
Beike, added, “For the first quarter of this year, China’s real
estate market has staged a notable recovery, bolstered by favorable
government policies coupled with the intensive release of pent-up
housing demand from the pandemic. Benefiting from our better
preservation of quality stores and agents during the market’s
profound downturn and the effective promotion of refined
operations, we proactively capitalized on market recovery tailwinds
and the seasonal boom at the beginning of the year. As a result,
our GTV growth significantly outperformed the market and our net
revenues reached RMB20.3 billion, a 61.6% increase year-over-year.
Moreover, our more streamlined cost and expense structure has led
to a significant increase in single-quarter profitability, bringing
about the highest gross margin and operating margin since our
listing at The New York Stock Exchange. Our net income reached
RMB2,750 million for the first quarter, compared to net loss of
RMB620 million in the same period in 2022, while non-GAAP net
income jumped to RMB3,561 million in the first quarter, compared
with RMB28 million in the same period in 2022, and an increase of
137% compared to the first quarter of 2021 with a similar revenue
scale. As we look ahead, on the basis of optimized costs and
expenses structure, we will reap profits from efficiency and
continue to foster high-quality growth. In the long-run, we will be
more proactive with our initiatives that contribute to long-term
growth and greater vision. In the vast market of residential
services, we will fortify our foundation with quality at our core,
and make relentless efforts to improve the working environment of
service providers and bring a better housing service experience to
consumers.”
First Quarter 2023 Financial Results
Net Revenues
Net revenues increased by 61.6% to RMB20.3 billion
(US$3.0 billion) in the first quarter of 2023 from RMB12.5 billion
in the same period of 2022. The increase was primarily attributable
to the increase in total GTV. Total GTV grew by 65.8% to RMB971.5
billion (US$141.5 billion) in the first quarter of 2023 from
RMB586.0 billion in the same period of 2022, which was primarily
attributable to the release of pent-up housing demand after the
pandemic situation eased and the improved housing market
expectations against the backdrop of the macroeconomic recovery and
the successive introduction of supportive policies, as well as the
expansion of the Company’s home renovation and furnishing
business.
- Net revenues from existing home transaction services
increased by 49.3% to RMB9.2 billion (US$1.3 billion) in the first
quarter of 2023, compared to RMB6.2 billion in the same period of
2022, primarily attributable to the increase of the GTV of existing
home transactions by 77.6% to RMB664.3 billion (US$96.7 billion) in
the first quarter of 2023 from RMB374.1 billion in the same period
of 2022. Among that, (i) commission revenue increased by
41.6% to RMB7.7 billion (US$1.1 billion) in the first quarter of
2023 from RMB5.5 billion in the same period of 2022, primarily due
to an increase in GTV of existing home transactions served by
Lianjia stores of 43.2% to RMB288.8 billion (US$42.0 billion) in
the first quarter of 2023 from RMB201.7 billion in the same period
of 2022; and (ii) revenues derived from platform service,
franchise service and other value-added services, which are
mostly charged to connected stores and agents on the Company’s
platform, increased by 111.0% to RMB1.4 billion (US$0.2 billion) in
the first quarter of 2023, from RMB0.7 billion in the same period
of 2022, mainly due to a 117.9% increase of GTV of existing home
transactions served by connected agents on the Company’s platform
to RMB375.5 billion (US$54.7 billion) in the first quarter of 2023
from RMB172.4 billion in the same period of 2022.
- Net revenues from new home transaction services
increased by 42.2% to RMB8.4 billion (US$1.2 billion) in the first
quarter of 2023 from RMB5.9 billion in the same period of 2022,
primarily due to the increase of GTV of new home transactions of
44.2% to RMB277.9 billion (US$40.5 billion) in the first quarter of
2023 from RMB192.7 billion in the same period of 2022. Among that,
the GTV of new home transactions completed on Beike platform
through connected agents, dedicated sales team with the expertise
on new home transaction services and other sales channels increased
by 43.0% to RMB227.0 billion (US$33.1 billion) in the first quarter
of 2023 from RMB158.8 billion in the same period of 2022, while the
GTV of new home transactions served by Lianjia brand increased by
49.9% to RMB50.9 billion (US$7.4 billion) in the first quarter of
2023 from RMB33.9 billion in the same period of 2022.
- Net revenues from home renovation and furnishing were
RMB1.4 billion (US$0.2 billion) in the first quarter of 2023,
compared to RMB88 million in the same period of 2022, primarily
because the Company completed the acquisition (“Shengdu
Acquisition”) of Shengdu Home Renovation Co., Ltd.
(“Shengdu”), a full-service home renovation service provider
in China, and began to consolidate its financial results during the
second quarter of 2022, as well as the organic growth of the GTV
for home renovation and furnishing business.
- Net revenues from emerging and other services increased
by 222.1% to RMB1.3 billion (US$0.2 billion) in the first quarter
of 2023 from RMB0.4 billion in the same period of 2022, primarily
attributable to the increase of net revenues from rental property
management services and financial services.
Cost of Revenues
Total cost of revenues increased by 34.9% to RMB13.9
billion (US$2.0 billion) in the first quarter of 2023 from RMB10.3
billion in the same period of 2022.
- Commission - split. The Company’s cost of revenues for
commissions to connected agents and other sales channels was RMB6.5
billion (US$0.9 billion) in the first quarter of 2023, compared to
RMB4.1 billion in the same period of 2022, primarily due to the
increase in GTV of new home transactions completed through
connected agents and other sales channels in the first quarter of
2023 compared with the same period of 2022.
- Commission and compensation - internal. The Company’s
cost of revenues for internal commission and compensation was
RMB5.4 billion (US$0.8 billion) in the first quarter of 2023,
compared to RMB4.7 billion in the same period of 2022, primarily
due to the increase in variable commission as a result of the
increased GTV of existing home transactions and new home
transactions completed through Lianjia agents, which was partially
offset by the decrease in the fixed compensation costs of Lianjia
agents, dedicated sales team with the expertise on new home
transaction services and other front-line operational staff.
- Cost of home renovation and furnishing. The Company’s
cost of revenues for home renovation and furnishing was RMB1.0
billion (US$0.1 billion) in the first quarter of 2023, compared to
RMB67 million in the same period of 2022, which was primarily
attributable to the Shengdu Acquisition and the organic increase of
net revenues from home renovation and furnishing.
- Cost related to stores. The Company’s cost related to
stores decreased by 22.4% to RMB0.7 billion (US$0.1 billion) in the
first quarter of 2023 compared to RMB0.9 billion in the same period
of 2022, mainly due to the decrease in the number of Lianjia stores
in the first quarter of 2023 compared to the same period of
2022.
- Other costs. The Company’s other costs decreased to
RMB424 million (US$62 million) in the first quarter of 2023 from
RMB516 million in the same period of 2022, mainly due to a decrease
in human resources related costs.
Gross Profit
Gross profit increased by 186.1% to RMB6.3 billion
(US$0.9 billion) in the first quarter of 2023 from RMB2.2 billion
in the same period of 2022. Gross margin was 31.3% in the first
quarter of 2023, compared to 17.7% in the same period of 2022. The
increase in gross margin was primarily due to: a) a higher
contribution margin for existing home transaction services led by
the increased net revenues from existing home transaction services
and the decreased fixed compensation costs for Lianjia agents; b) a
higher contribution margin for new home transaction services as a
result of an increased number of projects with higher margins, and
a relatively lower percentage of fixed compensation costs of net
revenues from new home transaction services; c) a higher
contribution margin for home renovation and furnishing business led
by an increased contribution from products and services with higher
margins; and d) a relatively lower percentage of costs related to
stores and other costs of net revenues in the first quarter of 2023
compared to the same period of 2022.
Income (Loss) from
Operations
Total operating expenses increased by 7.5% to RMB3.4
billion (US$0.5 billion) in the first quarter of 2023 from RMB3.1
billion in the same period of 2022, mainly due to the increase of
sales and marketing expenses along with the expansion of home
renovation and furnishing business, which was partially offset by
the decrease of research and development expenses.
- General and administrative expenses increased by 6.1% to
RMB1,621 million (US$236 million) in the first quarter of 2023 from
RMB1,528 million in the same period of 2022, mainly due to the
increase of share-based compensation, which was partially offset by
the decrease of personnel costs and overheads along with the
reduction of the headcount in the first quarter of 2023 compared to
the same period of 2022.
- Sales and marketing expenses increased by 50.3% to
RMB1,294 million (US$188 million) in the first quarter of 2023 from
RMB861 million in the same period of 2022, mainly due to the
increase in sales and marketing expenses for home renovation and
furnishing services as the financial results of Shengdu were
consolidated since the second quarter of 2022 and the organic
growth of home renovation and furnishing business.
- Research and development expenses decreased by 39.0% to
RMB457 million (US$67 million) in the first quarter of 2023 from
RMB749 million in the same period of 2022, mainly due to the
decreases in personnel costs and share-based compensation as a
result of decreased headcount in research and development personnel
in the first quarter of 2023 compared to the same period of
2022.
Income from operations was RMB2,978 million (US$434
million) in the first quarter of 2023, compared to loss from
operations of RMB918 million in the same period of 2022.
Operating margin was 14.7% in the first quarter of 2023,
compared to negative 7.3% in the same period of 2022, primarily due
to: a) a relatively higher gross profit margin, and b) improved
operating leverage as a result of personnel optimization and
optimized resource utilization in the first quarter of 2023,
compared to the same period of 2022.
Adjusted income from operations6 was RMB3,830 million
(US$558 million) in the first quarter of 2023, compared to adjusted
loss from operations of RMB450 million in the same period of 2022.
Adjusted operating margin7 was 18.9% in the first quarter of
2023, compared to negative 3.6% in the same period of 2022.
Adjusted EBITDA8 was RMB4,625 million (US$673 million) in
the first quarter of 2023, compared to RMB341 million in the same
period of 2022.
Net Income (Loss)
Net income was RMB2,750 million (US$400 million) in the
first quarter of 2023, compared to net loss of RMB620 million in
the same period of 2022.
Adjusted net income was RMB3,561 million (US$519 million)
in the first quarter of 2023, compared to RMB28 million in the same
period of 2022.
Net Income (Loss) attributable to KE
Holdings Inc.’s ordinary shareholders
Net income attributable to KE Holdings Inc.’s ordinary
shareholders was RMB2,747 million (US$400 million) in the first
quarter of 2023, compared to net loss attributable to KE Holdings
Inc.’s ordinary shareholders of RMB618 million in the same period
of 2022.
Adjusted net income attributable to KE Holdings Inc.’s
ordinary shareholders9 was RMB3,558 million (US$518 million) in
the first quarter of 2023, compared to RMB29 million in the same
period of 2022.
Net Income (Loss) per
ADS
Basic and diluted net income per ADS attributable to KE
Holdings Inc.’s ordinary shareholders10 were RMB2.32 (US$0.34)
and RMB2.26 (US$0.33) in the first quarter of 2023, respectively,
compared to RMB0.52 for both basic and diluted net loss per ADS
attributable to KE Holdings Inc.’s ordinary shareholders in the
same period of 2022.
Adjusted basic and diluted net income per ADS attributable to
KE Holdings Inc.’s ordinary shareholders11 were RMB3.01
(US$0.44) and RMB2.92 (US$0.43) in the first quarter of 2023,
respectively, compared to RMB0.02 for both adjusted basic and
diluted net income per ADS attributable to KE Holdings Inc.’s
ordinary shareholders in the same period of 2022.
Cash, Cash Equivalents, Restricted Cash
and Short-Term Investments
As of March 31, 2023, the combined balance of the Company’s
cash, cash equivalents, restricted cash and short-term investments
amounted to RMB66.6 billion (US$9.7 billion).
Business Outlook
For the second quarter of 2023, the Company expects total net
revenues to be between RMB18.5 billion (US$2.7 billion) and RMB19.0
billion (US$2.8 billion), representing an increase of approximately
34.3% to 37.9% from the same quarter of 2022. This forecast
considers the potential impact of the recent real estate related
policies and measures, all of which remain uncertain and may
continue to affect the Company’s operations. Therefore, the
Company’s ongoing and preliminary view are contingent on the
business situation and market condition.
Share Repurchase Program
As previously disclosed, the Company established a share
repurchase program under which the Company may purchase up to US$1
billion of its Class A ordinary shares and/or ADSs over a 12-month
period. From the launch of the share repurchase program on
September 1, 2022 to March 31, 2023, the Company in aggregate
purchased approximately 16.2 million ADSs in the open market at a
total consideration of approximately US$228.6 million pursuant to
the share repurchase program, certain of which were settled in
early April 2023.
Conference Call Information
The Company will hold an earnings conference call at 8:00 A.M.
U.S. Eastern Time on Thursday, May 18, 2023 (8:00 P.M. Beijing/Hong
Kong Time on Thursday, May 18, 2023) to discuss the financial
results.
For participants who wish to join the conference call using
dial-in numbers, please complete online registration using the link
provided below at least 20 minutes prior to the scheduled call
start time. Dial-in numbers, passcode and unique access PIN would
be provided upon registering.
Participant Online
Registration:https://s1.c-conf.com/diamondpass/10030661-ps8hfv.html
A replay of the conference call will be accessible through May
25, 2023, by dialing the following numbers:
United States:
+1-855-883-1031
Mainland, China:
400-1209-216
Hong Kong, China:
800-930-639
International:
+61-7-3107-6325
Replay PIN:
10030661
A live and archived webcast of the conference call will also be
available at the Company’s investor relations website at
https://investors.ke.com.
Exchange Rate
This press release contains translations of certain RMB amounts
into U.S. dollars (“US$”) at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to US$ were made at the rate of RMB6.8676 to
US$1.00, the noon buying rate in effect on March 31, 2023, in the
H.10 statistical release of the Federal Reserve Board. The Company
makes no representation that the RMB or US$ amounts referred could
be converted into US$ or RMB, as the case may be, at any particular
rate or at all. For analytical presentation, all percentages are
calculated using the numbers presented in the financial statements
contained in this earnings release.
Non-GAAP Financial Measures
The Company uses adjusted income (loss) from operations,
adjusted net income (loss), adjusted net income (loss) attributable
to KE Holdings Inc.’s ordinary shareholders, adjusted operating
margin, adjusted EBITDA and adjusted net income (loss) per ADS
attributable to KE Holdings Inc.’s ordinary shareholders, each a
non-GAAP financial measure, in evaluating its operating results and
for financial and operational decision-making purposes. Beike
believes that these non-GAAP financial measures help identify
underlying trends in the Company’s business that could otherwise be
distorted by the effect of certain expenses that the Company
includes in its net income (loss). Beike also believes that these
non-GAAP financial measures provide useful information about its
results of operations, enhance the overall understanding of its
past performance and future prospects and allow for greater
visibility with respect to key metrics used by its management in
its financial and operational decision-making. A limitation of
using these non-GAAP financial measures is that these non-GAAP
financial measures exclude share-based compensation expenses that
have been, and will continue to be for the foreseeable future, a
significant recurring expense in the Company’s business.
The presentation of these non-GAAP financial measures should not
be considered in isolation or construed as an alternative to gross
profit, net income (loss) or any other measure of performance or as
an indicator of its operating performance. Investors are encouraged
to review these non-GAAP financial measures and the reconciliation
to the most directly comparable GAAP measures. The non-GAAP
financial measures presented here may not be comparable to
similarly titled measures presented by other companies. Other
companies may calculate similarly titled measures differently,
limiting their usefulness as comparative measures to the Company’s
data. Beike encourages investors and others to review its financial
information in its entirety and not rely on a single financial
measure. Adjusted income (loss) from operations is defined
as income (loss) from operations, excluding (i) share-based
compensation expenses, and (ii) amortization of intangible assets
resulting from acquisitions and business cooperation agreement.
Adjusted operating margin is defined as adjusted income
(loss) from operations as a percentage of net revenues. Adjusted
net income (loss) is defined as net income (loss), excluding
(i) share-based compensation expenses, (ii) amortization of
intangible assets resulting from acquisitions and business
cooperation agreement, (iii) changes in fair value from long term
investments, loan receivables measured at fair value and contingent
consideration, (iv) impairment of investments, and (v) tax effects
of the above non-GAAP adjustments. Adjusted net income (loss)
attributable to KE Holdings Inc.’s ordinary shareholders is
defined as net income (loss) attributable to KE Holdings Inc.’s
ordinary shareholders, excluding (i) share-based compensation
expenses, (ii) amortization of intangible assets resulting from
acquisitions and business cooperation agreement, (iii) changes in
fair value from long term investments, loan receivables measured at
fair value and contingent consideration, (iv) impairment of
investments, (v) tax effects of the above non-GAAP adjustments, and
(vi) effects of non-GAAP adjustments on net income (loss)
attributable to non-controlling interests shareholders. Adjusted
EBITDA is defined as net income (loss), excluding (i) income
tax expense (benefit), (ii) share-based compensation expenses,
(iii) amortization of intangible assets, (iv) depreciation of
property, plant and equipment, (v) interest income, net, (vi)
changes in fair value from long term investments, loan receivables
measured at fair value and contingent consideration, and (vii)
impairment of investments. Adjusted net income (loss) per ADS
attributable to KE Holdings Inc.’s ordinary shareholders is
defined as adjusted net income (loss) attributable to KE Holdings
Inc.’s ordinary shareholders divided by weighted average number of
ADS outstanding during the periods used in calculating adjusted net
income (loss) per ADS, basic and diluted.
Please see the “Unaudited reconciliation of GAAP and non-GAAP
results” included in this press release for a full
reconciliation of each non-GAAP measure to its respective
comparable GAAP measure.
About KE Holdings Inc.
KE Holdings Inc. is a leading integrated online and offline
platform for housing transactions and services. The Company is a
pioneer in building infrastructure and standards to reinvent how
service providers and customers efficiently navigate and complete
housing transactions and services in China, ranging from existing
and new home sales, home rentals, to home renovation and
furnishing, and other services. The Company owns and operates
Lianjia, China’s leading real estate brokerage brand and an
integral part of its Beike platform. With more than 21 years of
operating experience through Lianjia since its inception in 2001,
the Company believes the success and proven track record of Lianjia
pave the way for it to build its infrastructure and standards and
drive the rapid and sustainable growth of Beike.
Safe Harbor Statement
This press release contains statements that may constitute
“forward-looking” statements pursuant to the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “aims,”
“future,” “intends,” “plans,” “believes,” “estimates,” “likely to,”
and similar statements. Among other things, the business outlook
and quotations from management in this press release, as well as
Beike’s strategic and operational plans, contain forward-looking
statements. Beike may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission (the “SEC”) and The Stock Exchange of
Hong Kong Limited (the “Hong Kong Stock Exchange”), in its
annual report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about KE Holdings Inc.’s beliefs,
plans, and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: Beike’s
goals and strategies; Beike’s future business development,
financial condition and results of operations; expected changes in
the Company’s revenues, costs or expenditures; Beike’s ability to
empower services and facilitate transactions on Beike platform;
competition in the industry in which Beike operates; relevant
government policies and regulations relating to the industry;
Beike’s ability to protect the Company’s systems and
infrastructures from cyber-attacks; Beike’s dependence on the
integrity of brokerage brands, stores and agents on the Company’s
platform; general economic and business conditions in China and
globally; and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks is
included in KE Holdings Inc.’s filings with the SEC and the Hong
Kong Stock Exchange. All information provided in this press release
is as of the date of this press release, and KE Holdings Inc. does
not undertake any obligation to update any forward-looking
statement, except as required under applicable law.
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands,
except for share, per share data)
As of December
31,
As of March 31,
2022
2023
RMB
RMB
US$
ASSETS
Current assets
Cash and cash equivalents
19,413,202
30,594,718
4,454,936
Restricted cash
6,181,057
7,859,637
1,144,452
Short-term investments
35,485,908
28,140,032
4,097,506
Short-term financing receivables, net of
allowance for credit losses of RMB139,427 and RMB141,625 as of
December 31, 2022 and March 31, 2023, respectively
667,224
907,698
132,171
Accounts receivable and contract assets,
net of allowance for credit losses of RMB2,088,478 and RMB1,888,844
as of December 31, 2022 and March 31, 2023, respectively
4,163,022
4,545,050
661,811
Amounts due from and prepayments to
related parties
405,956
403,584
58,766
Loan receivables from related parties
50,463
60,540
8,815
Prepayments, receivables and other
assets
4,057,843
4,244,548
618,054
Total current assets
70,424,675
76,755,807
11,176,511
Non-current assets
Property, plant and equipment, net
2,036,553
1,951,125
284,106
Right-of-use assets
11,284,070
12,293,826
1,790,120
Long-term investments, net
17,925,653
19,409,414
2,826,230
Intangible assets, net
1,686,976
1,523,967
221,907
Goodwill
4,934,235
4,939,798
719,290
Long-term loan receivables from related
parties
22,934
5,000
728
Other non-current assets
1,032,251
1,090,652
158,811
Total non-current assets
38,922,672
41,213,782
6,001,192
TOTAL ASSETS
109,347,347
117,969,589
17,177,703
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (Continued)
(All amounts in thousands,
except for share, per share data)
As of December
31,
As of March 31,
2022
2023
RMB
RMB
US$
LIABILITIES
Current liabilities
Accounts payable
5,843,321
6,255,985
910,942
Amounts due to related parties
425,685
436,924
63,621
Employee compensation and welfare
payable
9,365,512
8,720,871
1,269,857
Customer deposits payable
4,194,828
6,588,339
959,336
Income taxes payable
542,290
1,238,976
180,409
Short-term borrowings
619,000
504,410
73,448
Lease liabilities current portion
4,972,345
5,666,887
825,163
Contract liabilities
3,260,269
4,611,232
671,447
Accrued expenses and other current
liabilities
4,118,068
4,754,823
692,356
Total current liabilities
33,341,318
38,778,447
5,646,579
Non-current liabilities
Deferred tax liabilities
351,186
353,424
51,463
Lease liabilities non-current portion
6,599,930
6,867,758
1,000,023
Other non-current liabilities
475
389
57
Total non-current liabilities
6,951,591
7,221,571
1,051,543
TOTAL LIABILITIES
40,292,909
46,000,018
6,698,122
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (Continued)
(All amounts in thousands,
except for share, per share data)
As of December
31,
As of March 31,
2022
2023
RMB
RMB
US$
SHAREHOLDERS’ EQUITY
KE Holdings Inc. shareholders’
equity
Ordinary shares (US$0.00002 par value;
25,000,000,000 ordinary shares authorized, comprising of
24,114,698,720 Class A ordinary shares and 885,301,280 Class B
ordinary shares. 3,601,547,279 and 3,594,532,591 Class A ordinary
shares issued and outstanding as of December 31, 2022 and March
31,2023, respectively; 156,426,896 and 156,122,226 Class B ordinary
shares issued and outstanding as of December 31, 2022 and March 31,
2023, respectively)
487
488
71
Treasury shares
(225,329)
(189,313)
(27,566)
Additional paid-in capital
80,302,956
80,751,641
11,758,349
Statutory reserves
660,817
660,817
96,222
Accumulated other comprehensive loss
(412,721)
(737,796)
(107,431)
Accumulated deficit
(11,405,850)
(8,659,006)
(1,260,849)
Total KE Holdings Inc. shareholders'
equity
68,920,360
71,826,831
10,458,796
Non-controlling interests
134,078
142,740
20,785
TOTAL SHAREHOLDERS' EQUITY
69,054,438
71,969,571
10,479,581
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
109,347,347
117,969,589
17,177,703
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands,
except for share, per share data, ADS and per ADS data)
For the Three Months
Ended
March 31, 2022
March 31, 2023
March 31, 2023
RMB
RMB
US$
Net revenues
Existing home transaction services
6,151,456
9,181,199
1,336,886
New home transaction services
5,910,044
8,404,084
1,223,729
Home renovation and furnishing
87,506
1,407,931
205,011
Emerging and other services
398,961
1,284,866
187,091
Total net revenues
12,547,967
20,278,080
2,952,717
Cost of revenues
Commission-split
(4,133,778)
(6,470,733)
(942,212)
Commission and compensation-internal
(4,727,250)
(5,370,434)
(781,996)
Cost of home renovation and furnishing
(66,699)
(976,919)
(142,250)
Cost related to stores
(884,063)
(685,739)
(99,851)
Others
(516,433)
(424,457)
(61,805)
Total cost of revenues(1)
(10,328,223)
(13,928,282)
(2,028,114)
Gross profit
2,219,744
6,349,798
924,603
Operating expenses
Sales and marketing expenses(1)
(860,972)
(1,293,814)
(188,394)
General and administrative expenses(1)
(1,527,801)
(1,621,249)
(236,073)
Research and development expenses(1)
(748,945)
(456,740)
(66,506)
Total operating expenses
(3,137,718)
(3,371,803)
(490,973)
Income (loss) from operations
(917,974)
2,977,995
433,630
Interest income, net
113,358
263,491
38,367
Share of results of equity investees
60,390
5,670
826
Fair value changes in investments, net
(109,186)
43,165
6,285
Impairment loss for equity investments
accounted for using Measurement Alternative
(27,722)
(2,099)
(306)
Foreign currency exchange gain (loss)
(1,255)
34,707
5,054
Other income, net
450,702
554,973
80,810
Income (loss) before income tax
expense
(431,687)
3,877,902
564,666
Income tax expense
(187,945)
(1,128,156)
(164,272)
Net income (loss)
(619,632)
2,749,746
400,394
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(All amounts in thousands,
except for share, per share data, ADS and per ADS data)
For the Three Months
Ended
March 31, 2022
March 31, 2023
March 31, 2023
RMB
RMB
US$
Net loss (income) attributable to
non-controlling interests shareholders
1,655
(2,902)
(423)
Net income (loss) attributable to KE
Holdings Inc.
(617,977)
2,746,844
399,971
Net income (loss) attributable to KE
Holdings Inc.’s ordinary shareholders
(617,977)
2,746,844
399,971
Net income (loss)
(619,632)
2,749,746
400,394
Currency translation adjustments
(126,768)
(339,700)
(49,464)
Unrealized gains (losses) on
available-for-sale investments, net of reclassification
(166,064)
14,625
2,130
Total comprehensive income
(loss)
(912,464)
2,424,671
353,060
Comprehensive loss (income) attributable
to non-controlling interests shareholders
1,655
(2,902)
(423)
Comprehensive income (loss)
attributable to KE Holdings Inc.
(910,809)
2,421,769
352,637
Comprehensive income (loss)
attributable to KE Holdings Inc.’s ordinary shareholders
(910,809)
2,421,769
352,637
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(All amounts in thousands,
except for share, per share data, ADS and per ADS data)
For the Three Months Ended March 31, March
31, March 31,
2022
2023
2023
RMB RMB US$ Weighted average number
of ordinary shares used in computing net income (loss) per share,
basic and diluted —Basic
3,567,814,268
3,548,742,572
3,548,742,572
—Diluted
3,567,814,268
3,651,779,206
3,651,779,206
Weighted average number of ADS used in computing net
income (loss) per ADS, basic and diluted —Basic
1,189,271,423
1,182,914,191
1,182,914,191
—Diluted
1,189,271,423
1,217,259,735
1,217,259,735
Net income (loss) per share attributable to KE Holdings
Inc.'s ordinary shareholders —Basic
(0.17)
0.77
0.11
—Diluted
(0.17)
0.75
0.11
Net income (loss) per ADS attributable to KE Holdings
Inc.'s ordinary shareholders —Basic
(0.52)
2.32
0.34
—Diluted
(0.52)
2.26
0.33
(1) Includes share-based compensation expenses as
follows: Cost of revenues
85,525
93,996
13,687
Sales and marketing expenses
28,514
31,065
4,523
General and administrative expenses
139,889
533,343
77,661
Research and development expenses
98,347
43,351
6,312
KE Holdings Inc.
UNAUDITED RECONCILIATION OF
GAAP AND NON-GAAP RESULTS
(All amounts in thousands,
except for share, per share data, ADS and per ADS data)
For the Three Months
Ended
March 31, 2022
March 31, 2023
March 31, 2023
RMB
RMB
US$
Income (loss) from operations
(917,974)
2,977,995
433,630
Share-based compensation expenses
352,274
701,755
102,183
Amortization of intangible assets
resulting from acquisitions and business cooperation agreement
116,093
150,133
21,861
Adjusted income (loss) from
operations
(449,607)
3,829,883
557,674
Net income (loss)
(619,632)
2,749,746
400,394
Share-based compensation expenses
352,274
701,755
102,183
Amortization of intangible assets
resulting from acquisitions and business cooperation agreement
116,093
150,133
21,861
Changes in fair value from long term
investments, loan receivables measured at fair value and contingent
consideration
151,262
(35,910)
(5,229)
Impairment of investments
27,722
2,099
306
Tax effects on non-GAAP adjustments
(91)
(6,560)
(955)
Adjusted net income
27,628
3,561,263
518,560
Net income (loss)
(619,632)
2,749,746
400,394
Income tax expense
187,945
1,128,156
164,272
Share-based compensation expenses
352,274
701,755
102,183
Amortization of intangible assets
120,566
152,920
22,267
Depreciation of property, plant and
equipment
234,128
189,722
27,626
Interest income, net
(113,358)
(263,491)
(38,367)
Changes in fair value from long term
investments, loan receivables measured at fair value and contingent
consideration
151,262
(35,910)
(5,229)
Impairment of investments
27,722
2,099
306
Adjusted EBITDA
340,907
4,624,997
673,452
Net income (loss) attributable to KE
Holdings Inc.’s ordinary shareholders
(617,977)
2,746,844
399,971
Share-based compensation expenses
352,274
701,755
102,183
Amortization of intangible assets
resulting from acquisitions and business cooperation agreement
116,093
150,133
21,861
Changes in fair value from long term
investments, loan receivables measured at fair value and contingent
consideration
151,262
(35,910)
(5,229)
Impairment of investments
27,722
2,099
306
Tax effects on non-GAAP adjustments
(91)
(6,560)
(955)
Effects of non-GAAP adjustments on net
income attributable to non-controlling interests shareholders
(7)
(7)
(1)
Adjusted net income attributable to KE
Holdings Inc.’s ordinary shareholders
29,276
3,558,354
518,136
KE Holdings Inc.
UNAUDITED RECONCILIATION OF
GAAP AND NON-GAAP RESULTS (Continued)
(All amounts in thousands,
except for share, per share data, ADS and per ADS data)
For the Three Months
Ended
March 31, 2022
March 31, 2023
March 31, 2023
RMB
RMB
US$
Weighted average number of ADS used in
computing net income (loss) per ADS, basic and diluted
—Basic
1,189,271,423
1,182,914,191
1,182,914,191
—Diluted
1,189,271,423
1,217,259,735
1,217,259,735
Weighted average number of ADS used in
calculating adjusted net income (loss) per ADS, basic and
diluted
—Basic
1,189,271,423
1,182,914,191
1,182,914,191
—Diluted
1,189,271,423
1,217,259,735
1,217,259,735
Net income (loss) per ADS attributable
to KE Holdings Inc.'s ordinary shareholders
—Basic
(0.52)
2.32
0.34
—Diluted
(0.52)
2.26
0.33
Non-GAAP adjustments to net income
(loss) per ADS attributable to KE Holdings Inc.'s ordinary
shareholders
—Basic
0.54
0.69
0.10
—Diluted
0.54
0.66
0.10
Adjusted net income per ADS
attributable to KE Holdings Inc.'s ordinary shareholders
—Basic
0.02
3.01
0.44
—Diluted
0.02
2.92
0.43
KE Holdings Inc.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in
thousands)
For the Three Months
Ended
March 31, 2022
March 31, 2023
March 31, 2023
RMB
RMB
US$
Net cash provided by operating
activities
834,751
7,627,833
1,110,700
Net cash provided by (used in) investing
activities
(4,257,292)
5,577,918
812,207
Net cash provided by (used in) financing
activities
128,971
(331,643)
(48,292)
Effect of exchange rate change on cash,
cash equivalents and restricted cash
(28,363)
(14,012)
(2,040)
Net increase (decrease) in cash and
cash equivalents and restricted cash
(3,321,933)
12,860,096
1,872,575
Cash, cash equivalents and restricted cash
at the beginning of the period
26,732,209
25,594,259
3,726,813
Cash, cash equivalents and restricted
cash at the end of the period
23,410,276
38,454,355
5,599,388
KE Holdings Inc.
UNAUDITED SEGMENT CONTRIBUTION
MEASURE
(All amounts in
thousands)
For the Three Months
Ended
March 31, 2022
March 31, 2023
March 31, 2023
RMB
RMB
US$
Existing home transaction
services
Net revenues
6,151,456
9,181,199
1,336,886
Less: Commission and compensation
(3,827,787)
(4,679,479)
(681,385)
Contribution
2,323,669
4,501,720
655,501
New home transaction services
Net revenues
5,910,044
8,404,084
1,223,729
Less: Commission and compensation
(4,829,665)
(6,131,736)
(892,850)
Contribution
1,080,379
2,272,348
330,879
Home renovation and furnishing
Net revenues
87,506
1,407,931
205,011
Less: Material costs, commission and
compensation costs
(66,699)
(976,919)
(142,250)
Contribution
20,807
431,012
62,761
Emerging and other services
Net revenues
398,961
1,284,866
187,091
Less: Commission and compensation
(203,576)
(1,029,952)
(149,973)
Contribution
195,385
254,914
37,118
1
GTV for a given period is calculated as the total value of all
transactions which the Company facilitated on the Company’s
platform and evidenced by signed contracts as of the end of the
period, including the value of the existing home transactions, new
home transactions, home renovation and furnishing and emerging and
other services, and including transactions that are contracted but
pending closing at the end of the relevant period. For the
avoidance of doubt, for transactions that failed to close
afterwards, the corresponding GTV represented by these transactions
will be deducted accordingly.
2
Adjusted net income (loss) is a non-GAAP financial measure, which
is defined as net income (loss), excluding (i) share-based
compensation expenses, (ii) amortization of intangible assets
resulting from acquisitions and business cooperation agreement,
(iii) changes in fair value from long term investments, loan
receivables measured at fair value and contingent consideration,
(iv) impairment of investments, and (v) tax effects of the above
non-GAAP adjustments. Please refer to the section titled “Unaudited
reconciliation of GAAP and non-GAAP results” for details.
3
Based on our accumulated operational
experience, we have introduced the operating metrics of number of
active stores and number of active agents on our platform, which
can better reflect the operational activeness of stores and agents
on our platform. “Active stores” as of a given date is defined as
stores on our platform excluding the stores which (i) have not
facilitated any housing transaction during the preceding 60 days,
(ii) do not have any agent who has engaged in any critical steps in
housing transactions (including but not limited to introducing new
properties, attracting new customers and conducting property
showings) during the preceding seven days, or (iii) have not been
visited by any agent during the preceding 14 days. The number of
active stores was 42,994 as of March 31, 2022.
4
“Active agents” as of a given date is
defined as agents on our platform excluding the agents who (i)
delivered notice to leave but have not yet completed the exit
procedures, (ii) have not engaged in any critical steps in housing
transactions (including but not limited to introducing new
properties, attracting new customers and conducting property
showings) during the preceding 30 days, or (iii) have not
participated in facilitating any housing transaction during the
preceding three months. The number of active agents was 381,799 as
of March 31, 2022.
5
“Mobile monthly active users” or “mobile
MAU” are to the sum of (i) the number of accounts that have
accessed our platform through our Beike or Lianjia mobile app (with
duplication eliminated) at least once during a month, and (ii) the
number of Weixin users that have accessed our platform through our
Weixin Mini Programs at least once during a month. Average mobile
MAU for any period is calculated by dividing (i) the sum of the
Company’s mobile MAUs for each month of such period, by (ii) the
number of months in such period.
6
Adjusted income (loss) from operations is
a non-GAAP financial measure, which is defined as income (loss)
from operations, excluding (i) share-based compensation expenses,
and (ii) amortization of intangible assets resulting from
acquisitions and business cooperation agreement. Please refer to
the section titled “Unaudited reconciliation of GAAP and non-GAAP
results” for details.
7
Adjusted operating margin is adjusted
income (loss) from operations as a percentage of net revenues.
8
Adjusted EBITDA is a non-GAAP financial
measure, which is defined as net income (loss), excluding (i)
income tax expense (benefit), (ii) share-based compensation
expenses, (iii) amortization of intangible assets, (iv)
depreciation of property, plant and equipment, (v) interest income,
net, (vi) changes in fair value from long term investments, loan
receivables measured at fair value and contingent consideration,
and (vii) impairment of investments. Please refer to the section
titled “Unaudited reconciliation of GAAP and non-GAAP results” for
details.
9
Adjusted net income (loss) attributable to
KE Holdings Inc.’s ordinary shareholders is a non-GAAP financial
measure and defined as net income (loss) attributable to KE
Holdings Inc.’s ordinary shareholders, excluding (i) share-based
compensation expenses, (ii) amortization of intangible assets
resulting from acquisitions and business cooperation agreement,
(iii) changes in fair value from long term investments, loan
receivables measured at fair value and contingent consideration,
(iv) impairment of investments, (v) tax effects of the above
non-GAAP adjustments, and (vi) effects of non-GAAP adjustments on
net income (loss) attributable to non-controlling interests
shareholders. Please refer to the section titled “Unaudited
reconciliation of GAAP and non-GAAP results” for details.
10
ADS refers to American Depositary Share.
Each ADS represents three Class A ordinary shares of the Company.
Net income (loss) per ADS attributable to KE Holdings Inc.’s
ordinary shareholders is net income (loss) attributable to ordinary
shareholders divided by weighted average number of ADS outstanding
during the periods used in calculating net income (loss) per ADS,
basic and diluted.
11
Adjusted net income (loss) per ADS
attributable to KE Holdings Inc.’s ordinary shareholders is a
non-GAAP financial measure, which is defined as adjusted net income
(loss) attributable to KE Holdings Inc.’s ordinary shareholders
divided by weighted average number of ADS outstanding during the
periods used in calculating adjusted net income (loss) per ADS,
basic and diluted. Please refer to the section titled “Unaudited
reconciliation of GAAP and non-GAAP results” for details.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230517005882/en/
For investor and media inquiries:
In China: KE Holdings Inc. Investor Relations Siting Li E-mail:
ir@ke.com
The Piacente Group, Inc. Yang Song Tel: +86-10-6508-0677 E-mail:
ke@tpg-ir.com
In the United States: The Piacente Group, Inc. Brandi Piacente
Tel: +1-212-481-2050 E-mail: ke@tpg-ir.com
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