KE (BEKE) 12 Aug 212021 Q2 Earnings call transcript

Hello, ladies and gentlemen, thank you for standing by for KE Holdings Inc Second Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Matthew Zhao, IR Director of the company. Matthew. ahead, go Please

press will good today's second Welcome call. quarter operating IR in financial and posted and Inc. our we on The of KE and Executive Tao Xu, or and Mr. strategies company's the published Mr. were Yongdong, Beike's XXXX www.investors.ke.com. Chief Officer. results earlier morning developments evening Xu have today Financial and and to Peng overview are company's our details On everyone. will website, Holdings company's Officer, release Co-Founder call, results. provide Good Mr. business earnings conference and provide Peng Executive our on and Director an financial Chief Mr. our the additional

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store, XX% year-over-year the XX% on platform Next, from XX [Indiscernible] XXXX. quarter-over-quarter. let's half total look current stores, a accounted respectively. Approximately new growth. at third party months two our The quarter RMBXX of total for and second connected number year a XX% our XX.X% stores our opens first increased the half of for the - second stores store number XX,XXX in XXXX, our a In solid of store progress of business and owners, in of an over of and with GTV of were trailing of stores representing XX.X%, XX% the the first quarter, million GTV increase to per

second platform walk improved agents the The initiatives number quarter second year-over-year retention our apps by programs XXX,XXX. in stores to XX.XX of to on fulfill our XXXX platform period are X.X% stores brand the as in which of X.X the up agent half XXXX. talent compared XX,XXX our spa number feel average dropped focus platform, and we satisfaction re-channel As and in compliance quarter, honors last rules according of to by safe connected the and we first than of increased peak from agents on to that grow XXXX, of attrition of in retention. recruiting our rate to shifted a we management store agent same on connected of with agent of agents with which assistant In to MAUs platform platform recognition. survey, season. the enhanced to XXXX the a first that improve the XX% including the XX.X% XX% for has year, quarter first our in more on quarter, implemented positions. meeting first The half from the to end In continue half agent and second XX% reached have the store MAU million we retention, In we

fast In by by XXXX market According and growing GTV market trillion A quality closing to the stage agent transactions and for our downturn, while Institute, XX% early the the XXXX, the comparison in Beike cities transaction however, service to to in home the first year-over-year, on enhances services. increased environment transaction GTV and customers our half half first more existing agent and growth provides the us XX.X% GTV decreased Beike's representing In reflecting downturn. to RMBX.XX June existing by of Research of year-over-year, transaction we rectifying to half of major on continue X% certain deals. enjoy of of connected we that platform specialization better during promote At a compared efficiency. our increased second process; stores in XXXX. management home ambience to of resilience focus during existing contracts home of nationwide year-over-year tends so rose market a can enhanced to of strategy. opened centers existing security Turning China XXX XX.X% transaction signing end home of market, XXXX, the in

stores of of XX% of specialized the In XX on in second over for all has XX.X% transactions implemented stores XXXX, platform agents cities strategy operate collaboratively in stores agents XX, are accounted June of covered quarter, agents. efficiency in. completed end not transactions by increased implementing this X.X% we the the an As quarter, our collaboratively Most total more with of 'XX indicated notably, specialization a by collaborations our among that the by are from Shengdu, And of transactions first strategy. average XX.X% in frequent installed second which specialization completed increase of among agents. strategy, our quarter specialized of comparing XX%

continue We agent also empower to platform. develop to to our products the new

face done but the XX% we promoted For large when at they Impact and pay name a example, application agents offline and agent [Basing in a and Basing information mutual quarter. agent we enhanced a a and building overall screen digital information presenting testing communicating on second which are have and interactive to Shanghai accelerating standardized customers the to significantly of face. interaction visualized piloted Associates, in Impact relying tool process operations trust Basing with between customers. Impact] glance are structure is interacts new customer

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on our quarter, each content of minimum have for new June, all for online By home the During for the new end platform homes. completed home we fields with we enrich continue a online enrich XXX description projects of new to listings. past content

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potential even renovation in We home trillion size, considerable approximately vast a belief stronger is have developed RMBX growth home China's renovation of total. an The industry market. of in

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a service XXX renovations renovations, home time, which home making than investment in and an to a streamline further And robust maintain same forward a difference being for At technology second digitalization. Beijing. priority. our increase tenfold of our more also in renovation quarter, continue for looking year-over-year. consumers make renovation They home and viable and were the house to Beiwoo key top completed process if new enhance the are home We industry. our growth to providers is minimum is and our we R&D as published upgrade product service

support For chain office example, supply end-to-end system, the the renovation in Home sales regulations for firmly not living, standardization a a launched delivering enhancing and second quarter, management, Beike supporting SaaS And modules our housing policy. home service. designed, we a and middle version X and further opening, local that speculation. is provides summary, digitalization China's for is for In of upholding being

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discuss financial year. like last the of performance been QX our and has to results what year. operation QX of first programs. first versus half Therefore, portion and the compare A reiterate in the to COVID-XX QX transaction negatively at in will we financial calls Before, our earnings. last seriously XXXX as operation I'd impacted mentioned to business better a look investors we QX the whole by performance been here. meaningful has XXXX Since last shipped both of reflect financial first discuss We I of our that half half of suggest and for few

trillion last high in XX% was and of of driven to increase QX period trillion from of RMBXX.X consensus. both billion period RMBX.X RMBX.XX XX.X% by end QX guidance increased The the RMBXX.X from the in by same year. growth the revenue billion year, last net Our our in GTV exceeding to total in same street the

services to XX.X% primarily year transaction the period by billion in RMBX.X the RMBXX.X driven XX.X% from our from to trillion in to RMBX.X RMBXXX X.X% net same GTV growth of billion period first RMBX.X period net RMBXX.X existing in of on GTV to of XX.X% increase the in billion X of same new construction last by from revenue increased revenue same billion in XXXX, same the home period in billion attributable last year, In home year. last the from last from RMBX.X QX total increased year. by QX particular, trillion half RMBXXX.X For of to billion in

transaction to driven our year, to a last the RMBXXX.X XX.X% services For home increase by in same billion XXXX, in of from existing period by period from the billion from existing transactions net billion of same GTV increased year. first half revenues XX.X% home of last RMBXX.X of in RMBX.X RMBXX.X trillion

the RMBXX.X attributable Our to QX new home the XX.X% same to services same billion home transaction from net from RMBXX.X billion of QX by of primarily XX.X% of from billion increase of billion last to revenues in period GTV increased transactions new year, in in an XXXX. in in period RMBXXX.X RMBXXX.X

For new RMBXXX.X RMBXX.X new year, XX.X% the year. home first same revenue from period of billion transaction of driven services in from last home in RMBXX net to same of billion increase last increased the half billion of the by transaction by XXXX, GTV in our to from period XX.X% billion RMBXXX.X

units financial transaction billion was from housing of services emerging primarily the services, and to by same period in the revenues of the billion increase renovation increase QX an through completed the from RMBX.X services to net RMBX.X increased in platform. increased home Company's Our XX.X% number in The of level Company's around penetration year. last attributable and the other

was one, QX of the same of had in was the other XX.X% from RMBX.X For period. year, last in transactions, emerging that decrease to by XXXX, period same market-cooling in RMBX.X especially same existing of of QX in was home RMBXX.X relatively margin existing home pandemic, the of to year from XXXX. due of in last existing XXXX revenues Two, to portion a to period and gross of of in and resulting margin by home COVID-XX the in transactions QX. in billion Gross Gross increased QX, RMBXX.X agents profit measures more increased a first net in other as to last gross billion same the the total compared transactions, of net a QX affected of significant period shifted the by a our last resulting a that to lower compared margin sales lower year. in by XX.X% contribution Three, in year. QX billion of market last to to of billion transactions XX.X% billion year-over-year proportion same high led QX QX sales same to new compared new mainly to increased base billion in lower revenues Cost revenues of period period series of of the in completed channels the last a contribution QX margin performance revenues from period year. half from RMBX.X of in market in RMBX.X of the period margin XXXX, was compared because, contribution XX.X% home connected year, XXXX. resulting total the in compared ordinary to same from company, home The services

profit same development Research compared were RMBX.X RMBX.X.X half year, in the QX year. personnel. expenses were the billion mainly to expenses. billion due and to in last in RMBX.X in administrative an and expenses. share-based due on million RMBX.X of QX personnel RMBXXX and to RMBXXX compensation year, expenses compared period to compared XXXX, compensation billion development share Sales Total expenses in same were For to the of expenses the QX due million branding in experienced in in and increase were offline of increased compared the last operation in increase compensation QX General of headcount in period compared the expenses mainly the the billion increase RMBX.X last RMBXXX.X same of to advertisement and to same million billion marketing billion same in the period period in QX the primarily QX of XX.X% quarter of last period last as higher of year online in campaigns compared in expenses gross QX offline travel the as share-based were And in headcount the that to last restrictions. RMBX.X was relatively to last in well XX.X% in the incurred second RMBXXX the billion billion Operating we the of X.X% discussed year. less based mainly last Income as million margin margin in business R&D RMBX.X of to increase from gross from XXXX, in increased year, of year. period year. to due was period RMBXX.X to period same none same of of Operating same by profit profit. events first period gross operating in to billion and compared RMBX.X and due

from billion XXXX, RMBX.X in of XX.X% last first the operations of year. billion increased the half by from For same RMBX.X period to income

of to Excluding the in operating XXXX. operations XX.X% EBITDA in non-GAAP items, same in QX period last our in adjusted same X.X% billion to was was to QX RMBX.X period billion Adjusted compared billion of RMBX.X year. in was in the the period RMBX.X margin income from QX same Adjusted compared billion of compared XXXX. RMBX.X

compared billion half billion RMBX.X from from of by period in increased operations in For the XX.X% last RMBX.X the period same was of XXXX, income adjusted billion RMBX.X Net billion in last QX same year. year. the income to first to RMBX.X of

last compared in the billion QX, Excluding period our was income of same RMBX.X non-GAAP in to items, billion year. net RMBX.X adjusted

to KE XXXX. of same billion in billion half to QX, ordinary billion QX of Inc. in XXXX. same increased XX.X% attributable RMBX.XX net adjusted last attributable by period billion Holdings first income was to from X.X% the KE net of to increased RMBX.X by in Inc. attributable the RMBX.X net period from income of RMBX.XX RMBX.X the period shareholders to KE same of compared income in Inc.'s adjusted Net XXXX, million year. to in the Adjusted For billion income Holdings RMBX.X Holdings billion

RMBX.XX billion net to to RMBX.XX in in increased in period same year. QX, For of Inc. by attributable attributable the net attributable Holdings to same RMBX.X ordinary Inc.'s XXXX, Holdings period income diluted the per Holdings first in per to in of RMBX.XX XX.X% net adjusted compared period was million from Inc.'s Diluted KE shareholders RMBX.XX shareholders RMBX.X income ADS year. same the QX, Adjusted of to compared half to income last the of ordinary KE was last XXXX. KE ADS

balance Additionally, term of of long-term billion. investments cash billion long items may June in XXXX, to XX as our the amounted US$X.X include RMBX.X or

second the order the severe price city-specific home market-cooling and rolled out During stabilize slew expectations. a policies market quarter, land and of effectively the measures price, to in were

one year the to in most We second expect half of this be of the decades. stringent periods past

side, In the lines developers of terms supply wire variety involved. the unprecedented regulatory home period policy practices street has as price launching, intensifying transaction - underwriters condition of concentrate lines and From both of such of supply new number mortgage and to [Indiscernible] from to approval for rail to extended transaction significantly new cycle. and a the auction state home impact into line institution, homeless the financial

to uphold in living while the formally losses short the and amount longing year. better to on abandonment the this of will this joy the We In for reference measures those down crackdown housing challenge, of and customers. consumer of the purchase the housing stabilize of and a rails price government's the is led insurance believe we a some a support face city policies result [Indiscernible] market. estate the form and in speculation the creates second and of of raised While house will market by moderately long bring sell way, expectations. matters Those cooling has cool of will stable down the of promote the as also or market real distribution half and bonds

Research the quarter. the root - Beike XX% According [Indiscernible] past year-over-year in also of decades. times home economy pass today. market several the experienced becomes over market Institute sales the company nationwide Nevertheless, is through cycles. stronger to GTV is always those have cause This better ups third and why two down well a with in so is in to We and fall

GTV strategy, to multiple agents marketing home quarter specialization effort using more to in to Meanwhile, business cycle nationwide the industry. owners five. an under is agents in support and smooth will incentivize curves new to homes the advance sale XX% are our disruptors with and of quiet the opportunities the written third a benefits agent, income, purchase because ensure out - introduce year-over-year available our We sectors transaction in to market

believe as growth We there expect net measures sector related sales demand and in billion stabilize looking although to half decrease whether the emerging of we and guidance our market on home based and and spirit team. new rounds the quarter opportunities forward agents, change. from many on the us have enriching we of develop key the to will ratio, well of season, space and believe the Based depends uphold out will third believe into Company's of new growth time. impact to of put potential which in really due we as on improving efforts will of social increasing of is space. - that to sector. preliminary us for through Nevertheless, we market Meanwhile, is from to continue to RMBXX.X circumstances, the our sales, more considers help XX.X% network through in and of XX.X% to change, second home still top traditional the and our whether this quality market. current of issued tend kind RMBXX.X under collaborative this down, second estate strong of year. what we mission the of that developer business about and real agency billion, line is the measures, this business market content condition, in the new infrastructure This we are our recent take and has external representing responsibility, prevail, foundation our to decades business. several professional sense been continuously call, well the to we invest downside the We same sufficient services This outperform on us year on to forecast will the view confident will of downturns due it drive the parking The a experience policies half in in as to sales the sub input XXXX, we slowing between approximately as situation subject the going online continue the market, our eventually revenue mentioned pursue difficult quarter of new be home of conduct of for to matters about believe peak professionalism and are XXXX. the Whether ability, face companies strong

industry We for to go them and will support them. in increase incubate out the our this time standing the agents grow difficult to through

performance up exploration also year. running cannot summary, will moment society total In home our believe momentum at speeding the investment structure, momentum allow in for we although recently and in of the furniture contribute the renovation we general to our away this prospectus. our market half We in business it and go new applying us oversee by will strongly people cities value housing against efforts new services second in welcome our new feel more set in into business our the drivers. the young Therefore, development

external factors on even to We to returns influence performance take efforts devote That financial We time focus market our those continued of matches on developing than term Beike, external the near to our might minimize believe our investment. key more we fundamental volatility. noise is it and success compare in though it financial value rather to investing will long term and in capabilities, circumstances. and achieve is

fact, like the to the more remarks. We That the it call now difficult for is likely Operator, become. ahead. let's that we our would concludes more is, the prepared likely case, questions. it open and In go the longer

[Operator Instructions] from CICC. First Liping question comes Zhao of

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line the from come Piyush Mubayi of from Goldman questions Sachs. Next

Thank you for question. taking my

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Stanley elaboration. our further color on to some Chairman, invite I for to give this So want

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