KE (BEKE) 31 May 222022 Q1 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by for KE Holdings, Inc.'s First Quarter 2022 Earnings Conference Call. [Operator Instructions] 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

published Good website, Inc. good XXXX or company's on results Call. operator. today release to are and Earnings everyone. KE The posted were operating and Holdings, Beike's company's financial the evening, you, press morning, earlier IR and the Welcome Conference in investors.ke.com. Thank First Quarter

Officer. provide today's we have Executive and overview and Officer; Executive Xu, strategy call, developments Mr. our Chairman and will details For and will Mr. and our Director Mr. of our Financial Mr. Chief Chief results. financial an provide Stanley Peng, Peng on Tao business our additional Xu

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you, Hello, earnings you everyone. call. for Thank conference joining Thank Matthew. XXXX Beike's first quarter

we with challenges, tremendous quarter, confronted mostly short-term were the first uncertainties. from Looking back on arising

market. in shaken not this Now out have these uncertainties

center and we goal providers, everything outlook, believe the care We We helping prospect are paths now more our customer at do. customers of is take care long-term than convinced and service of the of take the positive of ever of achieving the market together.

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wins, take completed integration total renovation need that and home rapid make furnishing and and home our development especially services we Our thing primary root now with have acquisition. and Shengdu its rental to

results out initial the body the that that at win already of to growth our strategy. furnishing of our executing against by headed the strengthens big and direction services we and right trends our rental home the further services home renovation in belief market delivering are year. powerful last strategy realized pleased of strong our have are announced We The synergies, we one end

Let's quarter fourth in housing transaction move progress of the with services the our details XXXX. our to of

services time. undergoing housing is challenging still Our transaction a

bottom strategy protecting our efficiency improving agents, has against our home We most collections, professional private by a exists. the and the During retention sign their and customer optimize to services their rate strength strengths relating more concentrate quarter, sluggish interrupted higher, recovery impacts low remain market issues, governments developers fundamental of of due experience and in and Meanwhile, receivable consumer first them to the making out market We including on the uncertainties accelerating from to existing the by new policies risks the data by operations of leveraging due and crisis, discretionary home our reducing our were confidence. the us environment. the Experience boost with overly and The the in competitive. our By our faced the understanding outbreaks market efficiency planning. our impacted tells to also the services of regions this on organizational developers various users. stay to the and industry their focus the but Omicron we massive end of quarter, external quick first and action market, business that review aim enhancing end across turbulence investments, streamlining must correction Last focused. profitability. strong take and toward the changed of everywhere our

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development. stores customer take refine further will and the At first quarter, of X% We end to time and Beike’s actual stores XX,XXX, quarter-over-quarter. were strengths upon our connected passions the number number experience alone down XX,XXX, sustainable declined The were capabilities to and the the of achieve providers' of over the build service XX% quarter-over-quarter.

result approximately number continue agent from platform in market quarter by line its agents and the the number quarter-over-quarter. stores of of and first of number a resurgence a our on respective number of few fall added continues of we and in fund active decreased on our further which is to dropped with agencies stores mid-XXXX, the X% our was quarter, XX%, while and rapidly. existing The platform the our the penetrations, At ‘XX of on platform. stores industry both strengthened XXX,XXX XXX,XXX, new second number the respectively, As XX% product, mergers. to may actual stores end agents practitioners The in decline and the level recording peak was in of

to stores and Lianjia and we true of This million, continue rates. the at quarter-over-quarter. reached our will agents agent steady a productivity will first stores reduce on In per drive Lianjia, quarter, the and program the store same loss-making to big X% the plus optimize app Beike’s to MAUs execute time, up of notable productivity increase addition and play fastly the agent total In approximately serving low in the number mini model. also XX.X

We grow the expected online market recovers. as traffic to

Regarding existing sales transaction to home market. existing the Beike's volumes series of we Research were of existing XXX.X The according home quarter, of business. are resurging our adhering COVID-XX home existing dropped XX%, year-over-year uncertainties was were with XX% some starting RMB GTV cities declined down sources, in GTV and home interrupted market for mid-March. home the first Confronted outperforming in fourth the bottom overall external to year-over-year, XX% of existing transaction a existing efficiency nationwide Beike Institute, the sales the which by of and platform out key rebound transaction to quarter, the first principle in home in in billion,

our through First, metrics to units We more grade a refining and key efficiency we such indicators. will optimize aim agents as the of and based and reduce of stores managing operating collaboration the size management. manage better

will in focus the transaction, existing enhance with on tools. a customer capabilities home and our Second, home including home critical leads listings, sales we the notes in

best Big home -- capabilities Beike's pit outmost best and our call that showing leverage do maintenance, technical the of will and our listings. to we find sales We Data and listing to

boosted VR business of best a the VR with the on and the rich our Shanghai sales experienced This homebuyers' technical has is pile shared and during weakly due limits between videos. the enhancement. in sales distribution achievements, ability consultants increased or reconstruct streams virtual view the efficient providing and supported sales broad-view photos, to compared productivity tools in pandemic of generated and and our a in our efficiency tool, and to also do since home a immersive a lockdown spearhead application our intuitive From screen of operations Technology, peers leads have. will our and is and and COVID-XX and resurgence. XXX%. improve coverage more year, interaction We agents XX% via customers to and It these after which time -- expense quality throughout Lianjia tools more leads offline by online space. texts transcends point -- will with real-time with mid-March conversion. not the The substitute home than via by Behind possible

and First, head improve agents' efficiently oriented per productivity. we be will

In low-performing each Senior into stores. and walk must discontinue and operations. will store addition, personally management level optimize engage we in store

“Anxin” and commitments will service fulfillments. customers, For emphasize our we

the at insisted time, Most strategic this Shanghai. choices uphold, suspended philosophy we our business as will in will reduce consider those to been the waver to mean which We returns outreach and always, action, is are we efficiency-oriented not diluting full and capabilities for more period we choices what into due friendly” pay to choice in agents” right caring Putting Our base we not months within need. what Shanghai do devote in Faced that more future. many “admirable return we of and and importantly, beliefs. brace on our guaranteeing services, this with in do through believe and the low have bring investment. community essential for two welfare the high turnover, pandemic. than is Transactions difficult ourselves engagement, will our in for agent agents for an did the “community

times, community More prevention from than the our community bond among provided These a such outbreaks and infinitely our into Beijing pandemic reflects Beginning the more communities Lianjia In actively and on touch served on our that communities. X,XXX points the volunteered integrate community frequent necessities agents X,XXX work COVID-XX during brands team the March, services We cities community. to with in become since volunteers. other the X,XXX more agents from and and and agents in truly voluntary services alone strong prevention, volunteers Suzhou, in helping XX,XXX Lianjia will key of combat XXrd, volunteers’ control frontlines have our believe the to fuel During pandemic as COVID-XX than as times. agents services communities April allow connected lockdown. Shanghai testing, participated stores future, services. delivery, Lianjia

belief we into how practical actions. of more is of our this importantly, More care customers" "taking turn

the decreasing made to of and Beike’s further lead platform The XX% no the from has to new market The to of residential GTV home overall in transaction real the the largest home fell sales Bureau top of of quarter, second trend sales home developers’ quarter, was CRIC’s that continued condition. Turning deterioration new decline faced XX.X% in that risk-averse, increasingly the of developers on GTV since ongoing to of a decline this buyers sales estate delivering the by year-over-year. market. by first crisis signs XXX home first the of with recovery year-over-year, GTV billion, Against slow home National new marking RMBXXX.X new market down Statistics, debt services, developers year-over-year. according existing XXXX. XX% backdrop, home the was Meanwhile, liquidity single-quarter

other and the land In increased market On and consistently. will management. strike a state-owned developers percentage risk fell, the prices of scale hand, we period auction balance current of the correction, expansion between

agents motivated collaborations through sell cycle. the of in focus projects, project we and Advance” the reduce high-risk “Commission virtuous business and collection of short on advancing low-risk projects fostering receivables, the to together term, accelerate First, to ensure a high-quality all while model in

we opportunities. developers addition, In Collaboration refined state-owned good and to with high-quality developers sales Corporate-to-Corporate explore our incremental

standardization unique capabilities and with we comprehensive our sales and top customer to to our our their and of with ecosystem. research, our boost the products endeavor sales the we As to healthy a conversion. value partners, services that, assessment jointly management housing extending to and refined industry of leveraging are chain, On data, residential build scientific reach more project help effectively developers develop we enhance advantage front-end

first our services progress headwinds, wings” “two and our business. quarter. achieved remarkable market the renovation to furnishing for moving growth and our home the in plans Next, Despite

industry of in home a delivery, X,XXX services, management. at building operational sharing, synergies the in in completed on addition acquisition the China the the supply to home according would XXX year, also strategy the overall models, to the forma output these Propelled Beike increased Building to home one-stop traffic on This Decoration revenue in driven and sales chain, value quarter. renovation have furnishing increase year-over-year renovation reflected by Shengdu in contract growth basis, Association. retail first focused XX% our and are stark The furnishing, leverage declined XX% Shengdu between XX% RMB million. contrast, for home we continue X% for innovate from a year-over-year, new to improvements Shengdu place significant increase and solution sales. decoration remains by of improvements, would in by build first We contracts, furnishing created close to quarter, clearly a pro XX% the number assuming April. XX% and to in of in of the an first by housing directed end better the traffic fully and quarter a average In as and was consolidated, reached price, which Contracted total year-over-year in transaction show

Our the core our first support services. to services top line. and almost provided quarter, for incrementally business contributed strong core roughly home sales, business our In all customers home furnishing transaction XX% of and from contracted add renovation furnishing’s will referral renovation

over We this expect half contracted XX% of for Shanghai respectively. its XX% year. and of to sales, ratio such and a referrals the In all reach in Beijing, the second remarkable XX% accounted

supply of our by to cycle respect With Shengdu’s same boosted Wuhan, products, XX us comprehensive bulk project level the and project and XXX sales XXX%, of to further consistently measures. and Meanwhile, management and beginning of to leverage cycle in exciting. enhanced approximately XXX%, days achieving furnishing and shortened delivery, strive reached year we at higher construction aim short-run, by offline from in will enhance the compensation year. chain tool, especially ensuring progress drive with customer we days of diversity shorten services. quality the to with contract reduce major tie-ins, system Shengdu, end first the satisfaction quarter. our home smart overall satisfaction our in XXX% scientific renovation first SKUs scale craftsmanship sales customer consistently and average the and time the the procurement while management up more sales in X% management, margins ‘construction respectively. and SaaS service’, industry-leading our and Moreover, and Beijing management of customized and cycle respectively, site, is has delivery our quarter. and at and first in costs further quarter, Our XX% of categories in thanks XX% contracted accounted contracted the delivery price. through an rich furniture, future, the XXX%, in conjunction continue Beiwoo’s We [barter] also increased and Home appliances Contracted other chain sales the XXX year-over-year, supply. Shanghai, the the supply furnishing for massive of procurement XX% our flagship of quarter, days expand Hangzhou and by through price cities In In increased has the will customer gross Through to been management. to as our year-over-year, we scale, higher home a online improved our SaaS and average systematic to Shengdu delivery made in we Home assisting SKUs product back-end sales store. Home In revenue under NPS at growing. system contract construction deliver total first the to utilizing Beiwoo’s

more X target Hangzhou in its rapid monthly the of XXX sometime contracted each, have exceed to and a RMB year. entered sales With billion, our furnishing the phase. sales contracted services and second development and monthly the home the Beijing, surpass full Shanghai of Shengdu, integration million renovation to half in We

approach During quarter, the home clear. became our first services Beike to rental increasingly development

lite X,XXX management quarter. units with Our Carefree acquired rental first over the achieved in property ground-breaking Rent services, progress

the protect rights apartment a today. service as rate of as transform both and has to believe reached increase of units, model. quarter, and by have In end reach launched Xuhui to total first we occupancy project units home district has of our properties. During youth thoroughly management our The respect in such accomplished. and be XX,XXX. its year, program and first institutionalized market can Shanghai, from personal to first a Twilight By in X,XXX long-term tenants Youth rental managed, nearly the monthly the we under apartment system more commenced “light” to quarter, deployments that XX% in rental we first launched to March, units the cities. operations to Rent disperse owners. expanded custodial using professionally a Beike most compensations, that quarter. issues the Meanwhile, high-quality, cities, X rental participated truly have and guarantee RMBX,XXX, than in property cities interests apartments, the more commission, Shengdu, covers allowing the and The under our services the loss with XX% operations low our rental rent, as safety, in and quality approach, model concerning aim X In management Twilight provides worry-free Carefree We XX,XXX Rent our centralized quarter-over-quarter Shanghai, by project into Carefree followed and and in properties reliable, this in Apartment, New

in customer steadfast in a the information providing services against of our capabilities through service training, choice the providers’ fought qualities. the reducing sureness. network, agent optimization investors uncertainty for next XXth. Finally, way the thank our listed their on on of I to of face our main has the This all centered uncertainty and would uncertainty combatted our Kong of reflects introduction authentic and cooperation all by faced. We right of to business through the on uncertainty the our to was in efforts with challenges successfully and Lianjia for the represented in like the for against Hong certification, business now us against uncertainty horns Beike, We Exchange commitment have uncertainty uncertainty the always through listings, industry Stock to journey forward, support. our and products. board Beike reduced May From through substantial destination. service we our empowered The cooperation of been sound examination, with value and

market grows greater, who and change about at as do this accelerate on be, we future. serve when Our more are and challenges the to recent may same a unprecedented year There the time multiple though has our doubt strengthen confident are we Therefore, organization that they being are the united an set to changes, more our is faith the direction. spirit, tested not even in it organization, no fronts.

belief with costs. while its must foundation, we to we lower must for development streamline overcome transaction our that, organization the turn and solid taking leaner housing that pass, many in are to strong review services sides! our We our a solidify will while get for as stronger, Tao, our structural our to capabilities operations, all The next our vitality. a today Decisive our Our I and whole like service would new closer the and value we for over emerge are and obstacles, maintaining customers, collaborate. not first will challenges must brave the actions CFO, for quarter on steps Fear these build uphold shareholders. costs wings two iron-clad creation our capabilities our call With providers and concrete of financials. the empower sustain decade Xu underlying

for you, us. thank and everyone you Thank joining Stanley,

Before our XXXX discussing details results, of brief update a to more the of market. provide I recent about would financial first housing like quarter

existing quarter, XXXX. signs QX, on a developers curbs brought Beike frequency intensity XX% narrowed During challenges. compared and eased chill home Institute, ailing to transactions and purchases. home According down QoQ that the to sector XXXX demand and and second purchases GTV payments, as of remain liquidity boost in new the property the deep of for a facing home are QX, home have QX support have XX% rules to in to while easing rates policies, many the mortgage decline steps Research in measures smaller subsidies, of to soft, still more of respectively, variety first include the sales XX% into unprecedented some in relaxed The recovery. cities reductions more the of and Those half after with pushed market,

in been quarter in which areas mounting local-level including also been mobility variants saw our other With COVID-XX have those Shanghai, transactions local have our went cities infections have closed resurgence and first disrupted. lockdown. temporarily and of in in restrictions place, under which a operations The control many city-wide the adversely stores in China, affected, measures into been varying

and consumers to as After living of periods outbreak the conditions. more of subsequent the are a we policies increasingly even To market The with sentiment optimizing will of policies recovery be experienced home rebounded. lift be further and demanding the demand we demand Politburo Therefore, and for summarize, COVID-XX, At to pent-up standards lay We the regulations. the of in revive developers’ demand, muted become the that to economy. believe disrupted with in first were overall transaction of released end in temporarily those execution, positioned economy local to utilize has expressed higher we sales funding However, XXXX, will be work the gradually half the the April, volume, refining the signaled able foreseeable opportunity presales although future. market of China’s should optimize QX the and and market meeting loosening better housing in leaders by top support was our recovery. re-opening supportive the buying COVID-XX fragmented further ground for still in stronger. property believe bid

in to details financial our Turning QX.

Our RMBXXX.X XXXX. decrease home compared GTV RMBX,XXX.X in RMBXX.X of same RMBXX.X net of decrease the billion a continuing of QX due XXXX, billion revenues XXXX, from home transactions services the existing billion consensus. were from of RMBX.X GTV restrictive our to year. with existing GTV QX, certain XX.X% of in of by downtrend XX.X% in emergence QX, period COVID-XX decreased in high in the in total relatively of RMBXXX.X XXXX, to the XX.X% in of our period RMBXX.X to from transactions measures a and the and of the In transaction net new billion from second RMBXXX.X to to same of base and due billion primarily same decline of XXXX, the existing in period home last to the market regions in same the same half QX in was particular, in street transactions guidance high-end to for billion exceeding primarily in QX attributable The the and period the of of billion period in line billion corresponding the revenues since the the home

new from by of to in home revenues XXXX, QX RMBX.X from same in period the XX.X% in GTV RMBX.X the XX.X% new transaction which billion the decrease services to QX net of RMBXXX.X of primarily Our was increase commission in due home decreased billion same period from moderate in billion XXXX, rate partially billion by transactions. home new transactions to offset the a RMBXXX.X of a of

RMBX,XXX personnel compared were same million Sales of due marketing one, XXXX. XXXX. development relatively XXXX, of in to advertising of increase and QX, million from lower in was million costs. personnel in period RMBX,XXX million X.X% a expenses from QX same of store XXXX, to the compared Our billion decrease decrease in higher RMBX.X in RMBXXX to The of in credit of to two, decreased costs QX, of for relatively renovation net XX.X% RMBXX.X RMBXXX the compared from in RMBX.X and home Research period the related margin General of of of operations in XXXX. margin a billion RMBXX.X in due from to QX, billion Cost the the the activities. to QX, decrease Operating XXXX, to by margin as marketing a revenues of by provision of in in revenues decrease RMBX.X partially compared Loss XXXX. period primarily to expenses and fixed emerging the and expenses gross resulted net same the result in and revenues RMBX.X was same to in XXXX. the the same total margin; the of in of the net and revenues Lianjia services, result million compensation RMBX,XXX contribution to billion net of losses compared and were services was Operating a same mainly the expenses in attributable RMBXXX QX, QX, period billion same were the QX compared to net other from mainly in billion due as RMBX,XXX gross due home XX.X% were mainly costs. in period RMBXXX in administrative period same the in same to costs net decrease the expenses QX a RMBX.X decrease promotional revenues was QX, the percentage of million to operating to profit which period existing brand period by in same from million of of lower compared same billion revenues of of an in billion of compared compared to to two, from margin XXXX. QX, decreased RMBX.X period net increased higher in of period operations of in for percentage of revenues period XX.X% was was profit one, agents; and relatively primarily XXXX, QX X.X% income compared the negative of period to transactions financial XXXX. the same revenues the of Gross a to: of percentage due to XXXX, of million offset of increase of services. XX.X% Gross mainly

RMBXXX X.X% items, to was from from in QX, non-GAAP in Excluding operations to million our the negative compared the Adjusted X.X% in loss period operations operating XXXX. in adjusted adjusted QX, compared of income same of million was RMBX,XXX margin net million in same of period was was RMBX,XXX to RMBXXX QX, Net compared million QX, of of income compared RMBX,XXX same period XXXX. to same in EBITDA in XXXX. million loss million period of the the XXXX. in RMBXXX Adjusted

shareholders of to KE QX, income attributable million million in attributable the QX, to to million to the Excluding in Holdings RMBX,XXX loss same RMBX,XXX attributable same of same to compared RMBXX Holdings KE compared million Inc.’s RMXX non-GAAP loss net ordinary QX, XXXX. RMBX,XXX XXXX. KE Holdings in adjusted XXXX. in million Adjusted in was compared net items, was to Inc. period of shareholders the period million RMBXXX Net income was in net Inc.’s of ordinary period

of RMBX.XX, attributable shareholders to to attributable KE Holdings of Inc.’s XXXX. For per ordinary income XXXX, KE shareholders per Inc.’s period attributable ordinary the to compared net of income was ADS the in RMBX.XX compared diluted first Holdings was RMBX.XX XXXX. RMBX.XX to Inc.’s diluted ADS same per KE to shareholders ordinary same Adjusted of the quarter loss period ADS net Holdings net diluted in

Next, our updates focus about financials. markets capital as operation initiatives, will I talk regarding and as corporate our well on recent near-term

delists shareholders’ Company capital the two later. York by new a way XX. adopted Stock years by Exchange typical the firms, didn’t which Stock unlike Exchange secondary New listing The successfully Meanwhile, many status the IPO, additional unlike of we of the from if procedures. a Beike on our Main introduction, most issue and us Hong on protect enabling threshold to primary -- our shares avoid cases, raise to our also or home-coming been has full stakeholders. listing, way stricter even under of primary a listed to interests. Chinese by the allows is dilution interest Firstly, us to of the introduction The on dual-primary Board HKEX requires listing of best from May the extreme external Kong dual higher other maintain tackle our solution uncertainties responsibility and to a U.S.-listed risks, and listing us It with

model expected into services, rapidly furnishing Beike’s this industry. financial we will future. Secondly, statements home be empower consolidated May us With our ‘two Shengdu both furnishing which year. since wings’ in more grow sides, services further Shengdu rapidly of strong gaining and replicate our respective to the combination revenues are renovation advantages from late from allow home of of traction at resources completed the and to for more Shengdu renovation in support, and our leverage the acquisition will scale to The one will business, our April. of successfully

in certain restructuring million change the a associated Thirdly, cities, and the executed market the This early for in made in this personnel we the to choice of to we We dynamics. order core of we out carry COVID-XX our on ensure COVID-XX deep service we sufficient the based of that and during liquidity really uncertain million from focused around further we By cycles back of in better market. expect be and the the back initiatives our in believe incurring able home our believe QX RMBXXX predictions XXXX QX. the capability on market, recently financial on provisions personnel and severance carried in severance the may development a housing incurred Company was be uncertainties impact the doing adjustment, cash to It recovery middle we’ll preemptive in be can with be and the approximately our market due fallout business will Fourthly, and one-off slow a and relatively our outbreaks our business, that through optimized outbreaks difficult tough will navigate on on cope and mid-term business the reemergence of with generation from May, offices. more provisions the focus time, for manner, period. similar new strong with we made RMBXXX market. recovery structure

long-term RMBXX.X As of and were including cash or to March The equivalents, cash amounted mainly cash, restricted RMBXX.X XXXX, short-term billion, long-term XX, investments, of billion. $X.X balance cash $X.X our billion. or investments items, billion, our

a to confidence move The Company. from up we In growth general meeting which share our a be that addition, XX-month repurchase we a billion the ADSs of announced subject the in $X of our business. a of also may we convened long-term under program period, our over mandate at today to propose underscores and by to obtaining repurchase to fundamentals general our establish shareholders

measures, second the for as effect well potential the remain at the measures, sales XXXX, market developing we XXXX, current business of like more the on and home GTV XX.X% expect the of stage over billion, of these to which approximately turbulence, to all a high COVID-XX the certain forecast total investing restrictive view capabilities, devoting new business, from might are all base if we to which to it negative and XX.X% the period preliminary as affect fall net regions, situation early effort real while home expect the in decrease considerations, according transaction QX, XXXX. potential corresponding our impact of achieve above time the regions and short-term the RMBXX of considers QX, and of investments. continue same market is the in Research our same decrease over Based considering QX estate-related even and of Company’s representing in of and the to reiterate uncertain period containment This weathering overall we revenues measures consistent take beliefs, market focus be we policies COVID-XX and RMBXX.X returns and XX% and Turning to GTV to to year-over-year condition, change. overall the of to recent still in are quarter transactions to impact Beike subject the billion of to recovery, emergence XX% guidance may the certain Institute. financial existing looking adversely I’d in in housing XXXX: of to the our between of long-term on forward Today, on on year-over-year market

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create never remarks. call self-motivated, ahead. be That our concludes We always will long-pursued the our to questions. the now your open we to will would industries. prepared go Operator, like driven We end, indispensable for goal to stop. To that value by please

[Operator Steven Instructions] Morgan Stanley. Our is question first from Tsai with

trends both platform outlook. regarding with and [Foreign Thank impact management just share the conditions to for the and and on Could us market current the market, quarter employment new to not Language] the taking you, your the sales your and property impacting question but management My my view the on has questions. in is only for date? homes Also, homes consensus essential existing year call, brought pandemic of the also context, In the that to earnings expecting are Thank to first wondering XX% year the In the recovery? and the existing over that expectation? post-lockdown trajectory home think in changes of you were to if about X% just XX%, we and the I'm you new decline should market year on decline that there sentiment. how the full quarter timing mentioned to home any XXXX. the you. market overall

the year, address to has rate, consecutive and which been the mortgage Restrictive days XX also for LPR around XX like city the but months. significant I easing cycle the determination restriction, home once. beginning I cities, XXXX. April, days issuance reached relatively These showcase. instituted boost government's continuously including below include have for at on have were the cities, imposed nine rate up. me reducing Nationwide in this promoting all in from our setting lowered measures first lengthy fact X of observation this and let the policies. [Indiscernible], The in relaxing continue tier to two means making created demonstrates policy Steven, the policies since In your runs released ratio the Since years market measures [Indiscernible] at be X.XX%. March, the policies public rate released to would the down, all to April, the past as signals From the shortest to fallen Suzhou, since X been purchasing the stabilize mortgage Chengdu mortgage you, dropped the approval take purchase Mortgage the top have The payment market question. Thank especially in level the first down from policies have mortgage subsidies. different limited. at easing steps have to of etc, XXXX. restrictive cycle lowest implemented The partly home origination easing purchases believe been market. section, That has major levelling its level. peak home

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began dropped the second-tier quarter the Specifically, by GTV over home but by According market GTV quarter, in quarter, first Beike's cities. further fell home in as the to China city new in new third-tier tier sales after pandemic. out broadened existing Chinese price year first quarter. year level, year interrupted up and XX% in over first the of Beike transactions and the to and the XX.X% in The home Research shows year QX. was steadily rising by recovery evaporating Year pick divergence the at market sales New market subsequent in cities Institute, over the XX% trend cities and

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sales transactions XX% operate areas in conservative market the of the was in XXX Shanghai X.X nearly pace neighboring In Delta, being home one Shanghai expected than are new standstill restrictions. were pandemic he approximately X In at be are to least XX% a on-site least the which nearly the at is closed closed. will tools. the the Beijing QX. its suspended are throughout months estimates, under to impacted lockdowns in transaction and in temporarily our stores of about delayed. stores were More in such, recovery affected transaction our store QX. for are of month According to and of and of XX% than we May, River expected or In pandemic come QX. XXX in half of temporary QX the As by be in XXX% cities are Yangtze April, transactions closed in project Shanghai communities more where to

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home well As Thank is Steve. sufficient you, factors. the and buyer's other income

from comes with question Sachs. Goldman next Our Timothy Zhau

now is Your open. line

terms and result. and on regarding policy rate Also, need Thank going increase the receivables, in management in is SOEs decrease in first you, of any impact the new private home account GTV impact on Language] of [Foreign provide Thank very between any we the the the actually G&A with home related developers management model to management transaction is concentration base and on the new terms SOE's provisions your is difference what question solid of My business breakdown commission a rate has Could congrats business. the book its in does also cost quarter. see along provision as business, see change how and on you. [Indiscernible] the to that. to versus further

Thank you, Timothy.

address your Let me question.

developers state Regarding auction sales, quarter, government perspective the first representing in government increasing, year owned all in land. and over the year the the has developers top central XX%, in accounted land increase Research From developers' increase developers' terms ratio XX and developers representing is to bought city of first an XX%, state according been for auctioned owned XX% And central of the this owned Institute, year. city over concentration question, quarter year. Beike the owned GTV for actual. and X% top X% the sales, X% QX, accounted an quarter of of of Of XXX developers over

could The new increase state owned to regardless, owned state platform, QX, X% concentration central and that government about over quarter two or central year-over-year is of around the whether increase. the of percentage impact factors there XX% increased the quarter and of From due XX% developers, the the has impact of only emphasize more increased Beike are than representing On developer Beike. to the private, has and as state a owned X.X% want the GTV central that developer’s we the owned into increased developer and Beike early sales bigger in state [Indiscernible], to of the percentage a year-over-year the well. from home as

and developer better face the same The strong emphasize in the acquisition second relative factors run, commission on sales remain penetration offset trend private, have this, same owned brokerage and one is whether will or rate customer state rate another. of the pinpoints two to unchanged. the I is regardless the is risk, largely first service the these want increasing of the The channels. in that long dependency of

at the The every the developer key is continuous new level year. rate in service not data, the the rate As Beike the change. such, also the service service determining penetration and the the and of project the on certain the are differing penetration home of rate increase and the commission it same factors [Indiscernible] will Beike's state-owned penetration of is and both rise private Beike’s rate separation. Based

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the as your profit we effort. always, the Regarding timely accounting all receivables for agent and position prudent question, book and effect second very perform in treatment we, also intellectual

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collateral For to XX% provision increased XX% RMBXXX the bad million from remaining without debt QX. in we

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Our next question CICC. from comes Peilin with Zhou

Peilin. You're with now, us

taking Covid considering April updates Thanks. and second the in integration please Language] tightened certain contribution the on share in started is year management, there than previous year's cities Shengdu this [Foreign quarter. Since expectations, any question. in my could to consolidate Thanks, the process control revenue for this you earlier

well wings, couple you of [Foreign we the give philosophies the in new a of will and of there lot the on I the has thinking results based operational business, give truly that, and I you mentioned truly our results and let body believe more quickly well business between metrics Language] all business Yes, as the We actually this of kinds me synergies those as is prepared two details question. more during address been Stanley your details. a are transaction thinkings to want one the fundamental of believe kind especially as later terms that. is just my those sharing. I between update behind housing remarks

services. as transaction as For bigger had potential very we actually housing the a continue business, well decoration example, and in strong the referral provide into homes other to customer potential a

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for surpass overall RMBX at example, we data. contract per look as Such revenue month, one the the could So, billion.

how for more believe other effort, future, of that, goal. to beyond foreseeable those we look to not into from in for you, substitutes of we kind are well In at we industry. That's as long-term, business. online my in the kind the can as difference technical the by team, But reach to using the customer and well you growth So, worried your about all the ways those at can myself continue we satisfaction we look the as question. do all summary, the the we Thank bring the Operator. Back answer. as

for I will over today, of to closing host turn are the speaker now remarks. approaching Zhao, We conference end Matthew the Mr the call your call. now

Thank us you joining you, today. again once for Operator. Thank

look If you to and provided contact Beike's team have to website. through call, again next Investor forward further you questions, today's information you our free quarter. and with Relations Thank we This speaking on contact concludes feel goodbye. the please

today's concludes you Thank for conference This participating. call.

may You now disconnect.