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

The real estate market has begun to recover, and with the smooth rollout of the “One Core and Three Wings” strategy, Beike has delivered steady and solid performance.

Recently, Beike released its 2025 Q1 earnings data, continuing the growth it achieved in the second half of last year. In Q1, it recorded total transaction value (GTV) of RMB 843.7 billion, up 34.0% year over year; net revenue of RMB 23.3 billion, up 42.4% year over year; and net profit of RMB 855 million.

Specifically, Beike’s operations show many highlights. First, the combined transaction amount of its second-hand housing and new housing businesses is significantly higher than the market average, demonstrating the competitiveness of leading companies. Second, the rapid growth of its housing rental and home renovation and furnishing businesses has become a new engine for growth.

High Growth in Brokerage Business; Non-Real-Estate Transaction Services Become the “Second Growth Curve”

The brokerage business is Beike’s core business, and since the second half of last year, it has been performing consistently above expectations.

Of the RMB 843.7 billion total transaction value in Q1, transaction value from existing homes was RMB 580.3 billion, up 28.1% year over year; transaction value from new homes was RMB 232.2 billion, up 53% year over year. It is worth noting that this figure was achieved amid volatility in real estate sales. According to data from CRIC, in Q1, the sales value of Top 100 developers fell by about 7% year over year.

A large part of Beike’s ability to withstand cyclical fluctuations comes from improved operational efficiency. On one hand, the company is increasing investment in AI technology and rolling out multiple application tools, covering both B-end and C-end users.

Among them, the AI home-finding assistant “Buding” is designed for users. Its AI deep reasoning capability, combined with real, verified listings data, can better understand users’ home-search needs, intelligently recommend suitable listings, and provide users with intelligent, efficient home-finding products. The customer lead-side assistant “Laike” is designed for real estate agents, improving customer communication efficiency and increasing deal conversion rates.

In addition, to improve efficiency from “lead to store,” Beike supports the transmission and circulation of listings in two ways. On one hand, it enhances internal fine-grained management through tools such as the store-operator workbench and AI intelligent listing promotion assistants, as well as offline listing focus meetings, to help listings move and circulate. On the other hand, it builds platform operating and incentive mechanisms, such as an incentive points-based benefits system and regional co-governance councils, to encourage store operators to grow upward and strengthen cross-store cooperation.

In Q1, the company’s GTV per store and GTV per employee both increased by 8% and 14% year over year, respectively. Both productivity per employee and store efficiency improved. At the same time, the loss rate of existing stores fell to 2.9%, down 6% quarter over quarter and down 38% year over year. Additionally, the 6-month retention rate of stores newly connected in the first half of 2024 reached 94%.

Now let’s look at the non-real-estate transaction services business. In Q1, net revenue increased 46.2% year over year, accounting for 35.9% of total net revenue, which has already made it a genuine second growth curve.

Among them, the home renovation and home furnishing business recorded net revenue of RMB 2.9 billion, up 22.3% year over year. Meanwhile, the business’s profit margin reached a record high of 32.6%, up 2 percentage points year over year.

For housing rental service revenue, net revenue reached RMB 5.1 billion in Q1, up 93.8% year over year. According to the company’s disclosed information, at the end of Q1, the scale of homes under management exceeded 500k units, including “Stress-Free Renting,” with more than 490k units under management.

In 2023, Beike established its “One Core and Three Wings” strategy, where “One Core” refers to new home and second-hand home transactions, and “Three Wings” refers to full-home renovation, rental, and Behaojia business. It is worth mentioning that since the home renovation business was launched in 2021, it achieved rapid growth immediately. The housing rental business has also shown strong growth potential. For Beike, the non-real-estate transaction services business has successfully opened a second growth curve beyond its main real-estate brokerage business, which helps increase the company’s earnings resilience.

The Era of Existing Homes Has Arrived; Improving Operating Quality Is Key

With improvements in operational efficiency, Beike’s profitability is also increasing. According to the company’s disclosure, in the first quarter of this year, operating expenses were RMB 4.2 billion, down 31.3% quarter over quarter, and adjusted net profit reached RMB 500k.

In fact, after several years of adjustments, Beike’s profit margins contributed by the second-hand and new home businesses have stabilized. Meanwhile, with the profit margin contribution improving from the home renovation business, and as the housing rental and Behaojia businesses develop, it is highly likely that its ability to improve operating quality will continue.

Beike’s executive director and Chief Financial Officer Xu Tao said, “While ensuring reasonable control of costs and expenses, we will continue to support the long-term development of our businesses, and fully back the strategic initiatives of the ‘One Core and Three Wings’ strategy.”

In Q1 this year, Beike’s cash on its balance sheet was RMB 490k, nearly 12% higher than at the beginning of the period. The total dividends paid to shareholders by the company in 2024 were about US$400 million. Meanwhile, the company spent a total of about US$716 million to repurchase shares. The number of shares repurchased represented about 3.9% of the total issued share capital at the end of 2023, and all repurchased shares were subsequently cancelled. Such a large-scale repurchase and cancellation reflects management’s confidence in future development, and is also the fulfillment of its commitment to return to shareholders.

From the perspective of the entire industry, since September 2024, a package of policies has driven the real estate market to recover, with both transaction volume and the number of home viewings rising noticeably. In 2025, “stabilization after a downturn” remains the main tone for the real estate industry.

As a leading real estate brokerage company in China, Beike is expected to benefit directly from the recovery in the real estate sector. More importantly, as the pace of urbanization slows, the real estate sales market has begun to enter the era of existing homes, which directly benefits Beike.

According to information from a research report by Founder Securities, in the past four years, the share of second-hand home transactions nationwide rose rapidly, reaching a historical high of 46% by the end of 2024, indicating that the second-hand home market is gradually becoming an important part of the real estate market. In addition, with increasing pressure on developers to reduce inventory, Beike will also have greater room to realize its own value.

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