20240524-招银国际-Eyeing_on_the_pace_of_fundamental_recovery_post_sentiment_rebound_8页_1mb

Beike Group (BEKE US) reported 1Q24 financial results, with revenue declining 19% YoY to RMB16.4bn, though still outperforming analyst and Bloomberg consensus estimates due to strong performance in new businesses. Non-GAAP net income reached RMB1.4bn, exceeding forecasts by the bank's research team. The bank anticipates existing home GTV to bottom out in 2Q24E, supported by policy relief, with a projected revenue recovery in both old and new businesses post-sentiment rebound. New business segments, particularly home renovation, showed promising growth (+71% YoY revenue) and are expected to reach breakeven by 2025E. The adjusted SOTP target is set at US$22.0, reflecting cautious growth outlook amid persistent industry headwinds from population decline and inventory levels.

The bank highlights Beike's strong ACN ecosystem enhancing its market share and the rapid expansion of home rental and renovation services, contributing to long-term growth prospects. Policy support is expected to positively influence fundamentals starting from 2Q24, though overall market recovery remains subject to persistent economic headwinds and challenges in reversing the downward housing price trend. Analyst certification and important disclaimers regarding risks, transactional securities, and disclosures for respective regions are provided.