UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2024
Commission File Number: 001-39436
KE Holdings Inc.
(Registrant’s Name)
Oriental Electronic Technology Building,
No. 2 Chuangye Road, Haidian District,
Beijing 100086
People’s Republic of China
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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KE Holdings Inc. |
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By |
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/s/ XU Tao |
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Name |
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XU Tao |
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Title |
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Chief Financial Officer |
Date: August 13, 2024
Exhibit 99.1
KE Holdings Inc.
Announces Second Quarter 2024 Unaudited Financial Results and Upsizing and Extension of Share Repurchase Program
BEIJING,
China, August 12, 2024 - 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 second quarter ended June 30, 2024 and upsizing and extension of the share repurchase program.
Business and Financial Highlights
for the Second Quarter 2024
| · | Gross transaction value (GTV)1 was RMB839.0
billion (US$115.5 billion), an increase of 7.5% year-over-year. GTV of existing home transactions was RMB570.7
billion (US$78.5 billion), an increase of 25.0% year-over-year. GTV of new home transactions was RMB235.3 billion (US$32.4
billion), a decrease of 20.2% year-over-year. GTV of home renovation and furnishing was RMB4.2 billion (US$0.6
billion), an increase of 22.3% year-over-year. GTV of emerging and other services was RMB28.8 billion (US$4.0
billion), an increase of 12.2% year-over-year. |
| · | Net revenues were RMB23.4 billion (US$3.2 billion), an increase of 19.9% year-over-year. |
| · | Net income was RMB1,900 million (US$262 million). Adjusted net income2
was RMB2,693 million (US$371 million). |
| · | Number of stores was 45,948 as of June 30, 2024, a 6.9% increase from one year ago. Number
of active stores3 was 44,423 as of June 30, 2024,
an 8.1% increase from one year ago. |
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 (excluding home rental 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 goodwill, intangible
assets and other long-lived assets, (v) impairment of investments, and (vi) 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 41,076 as of June 30, 2023.
| · | Number of agents was 458,690 as of June 30, 2024, a 5.2% increase from one year ago. Number
of active agents4 was 411,478 as of June 30, 2024,
relatively flat compared with one year ago. |
| · | Mobile monthly active users (MAU)5
averaged 49.7 million in the second quarter of 2024, compared to 48.0 million in the same period of 2023. |
Mr. Stanley Yongdong Peng, Chairman of the
Board and Chief Executive Officer of Beike, commented, “In the second quarter of this year, our series of operational enhancements
and scientific management measures supported us in achieving high-quality results that notably exceeded the market performance. We further
expanded our broader and deeper connections with service providers and new home projects on the supply side in our housing transaction
services. Through a series of training programs and refined operational measures, we enhanced the operational efficiency of the supply
side, optimizing the platform ecosystem. This year, our home renovation and furnishing and home rental services focused on capability
building, achieving significant business growth and continuous operational improvement. We are also exploring ways to deepen our community
engagement by increasing the density of services and innovating the operational models of community stores and service providers, with
the aim of better understanding and meeting consumer needs.”
“The growth potential for our home transaction
services remains significant, and the business models and capabilities of our home renovation and furnishing and home rental services
have also been validated. Looking ahead, our core goal is to build an organization that can continuously progress from one success to
the next. Our next step is to achieve sustained growth by driving a positive cycle of scale, quality, and efficiency,” concluded
Mr. Peng.
Mr. Tao Xu, Executive Director and Chief
Financial Officer of Beike, added, “In the second quarter of 2024, a series of easing policies were implemented, leading to an improvement
in the transaction volume of the existing housing market, while the year-on-year decline in the new home market sequentially narrowed
each month although still remaining subdued overall. Amid gradually improving market sentiment, we continuously deepened our operations
and achieved excellent performance in the second quarter.
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 409,054 as of June 30, 2023.
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.
For the second quarter, our total net revenues
reached RMB23.4 billion, up 19.9% year-over-year. The contribution margin from existing home transaction services rose substantially both
year-over-year and quarter-over-quarter, and the monetization capability of our new home transaction services has been further strengthened.
Non-housing transaction services grew rapidly, with revenues from our home renovation and furnishing business and home rental services
reaching history highs. Our continuous improvement in operational efficiency generated a gross margin of 27.9%, ticking up from 27.4%
in the same period last year. Our net income in the second quarter saw a 46.2% year-over-year increase, reaching RMB1,900 million, and
our adjusted net income grew by 13.9% to RMB2,693 million, showcasing improved profitability.
With
our robust cash reserves, we continued with shareholder returns through active share buybacks. As of
the date of this press release, we have in aggregate repurchased shares with a total consideration of approximately US$480 million
in 2024, which accounted for approximately 2.75% of the Company's total issued shares at the end of 2023. We have also upsized and extended
the existing share repurchase program to August 31, 2025, with the repurchase authorization being increased from US$2 billion to
US$3 billion. Moving forward, we will continue to reward the shareholders who have been staying alongside our growth and share the value
created by the Company with them.”
Second Quarter
2024 Financial Results
Net Revenues
Net
revenues increased by 19.9% to RMB23.4 billion (US$3.2 billion) in the second quarter of 2024 from RMB19.5 billion in the same period
of 2023, primarily attributable to the increase of net revenues from existing home transaction services and the expansion of home renovation
and furnishing and home rental business, partially offset by the decrease of net revenues from new home transaction services. Total GTV
increased by 7.5% to RMB839.0 billion (US$115.5 billion) in the second quarter of 2024 from RMB780.6 billion in the same period of 2023,
primarily attributable to the recovery of existing home transaction market driven by the release of supportive policies in the second
quarter of 2024, partially offset by the sluggish new home transactions market due to weaknesses in both supply and demand in the second
quarter of 2024.
| · | Net revenues from existing home transaction services increased by 14.3% to RMB7.3 billion (US$1.0
billion) in the second quarter of 2024 from RMB6.4 billion in the same period of 2023, primarily attributable to the increase of the GTV
of existing home transactions of 25.0% to RMB570.7 billion (US$78.5 billion) in the second quarter of 2024 from RMB456.5 billion in the
same period of 2023. The higher growth rate of the GTV of existing home transactions than that of net revenues was primarily attributable
to a lower commission rate of existing home transactions charged by Lianjia stores in Beijing, partially offset by a higher contribution
from GTV of existing home transactions served by Lianjia agents, for which revenue is recorded on a gross commission basis, while
for GTV served by connected agents on the Company’s platform the revenue is recorded on a net basis from platform service, franchise
service and other value-added services. |
Among
that, (i) commission revenue increased by 17.1% to RMB6.0 billion (US$0.8 billion) in the second quarter of
2024 from RMB5.1 billion in the same period of 2023, primarily due to an increase in GTV of existing home transactions served by Lianjia
stores of 29.9% to RMB233.2 billion (US$32.1 billion) in the second quarter of 2024 from RMB179.4 billion in the same period of 2023,
partially offset by the decrease in commission rate of existing home transactions charged by Lianjia stores in Beijing; 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 were RMB1.4 billion (US$0.2 billion) in the second quarter of 2024 compared to RMB1.3 billion
in the same period of 2023, mainly due to an increase of GTV of existing home transactions served by connected agents on the Company’s
platform of 21.8% to RMB337.5 billion (US$46.4 billion) in the second quarter of 2024 from RMB277.1 billion in the same period of 2023,
partially offset by the decrease in certain value-added revenues such as training revenues which were not directly driven by GTV of existing
home transactions served by connected agents. |
| · | Net revenues from new home transaction services decreased by 8.8% to RMB7.9 billion (US$1.1 billion)
in the second quarter of 2024 from RMB8.7 billion in the same period of 2023, primarily due to the decrease of GTV of new home transactions
of 20.2% to RMB235.3 billion (US$32.4 billion) in the second quarter of 2024 from RMB295.0 billion in the same period of 2023, partially
offset by the improved monetization capability. Among that, the GTV of new home transactions facilitated on Beike platform through
connected agents, dedicated sales team with the expertise on new home transaction services and other sales channels decreased by 20.2%
to RMB192.5 billion (US$26.5 billion) in the second quarter of 2024 from RMB241.3 billion in the same period of 2023, and the GTV of new
home transactions served by Lianjia brand decreased by 20.3% to RMB42.8 billion (US$5.9 billion) in the second quarter of 2024
from RMB53.7 billion in the same period of 2023. |
| · | Net revenues from home renovation and furnishing increased by 53.9% to RMB4.0 billion (US$0.6 billion)
in the second quarter of 2024 from RMB2.6 billion in the same period of 2023, primarily attributable to a) the increase of orders driven
by the synergetic effects from customer acquisition and conversion between home transaction services and home renovation and furnishing
business, b) a larger contribution from furniture and home furnishing sales (in categories such as customized furniture, soft furnishings,
and electrical appliances), and c) shortened lead time driven by enhanced delivery capabilities. |
| · | Net revenues from home rental services increased by 167.1% to RMB3.2 billion (US$0.4 billion) in
the second quarter of 2024 from RMB1.2 billion in the same period of 2023, primarily attributable to the increase of the number of rental
units under the Carefree Rent model. |
| · | Net revenues from emerging and other services were RMB0.9 billion (US$0.1 billion) in the second
quarter of 2024, compared to RMB0.6 billion in the same period of 2023. |
Cost of
Revenues
Total
cost of revenues increased by 19.2% to RMB16.9 billion (US$2.3 billion) in the second quarter of 2024 from RMB14.1 billion
in the same period of 2023.
| · | Commission – split. The Company’s cost of revenues for commissions to connected agents
and other sales channels was RMB5.4 billion (US$0.7 billion) in the second quarter of 2024, compared to RMB5.8 billion in the same period
of 2023, primarily due to the decrease in net revenues from new home transactions services derived from transactions facilitated through
connected agents and other sales channels. |
| · | Commission and compensation – internal. The Company’s cost of revenues for internal
commission and compensation increased by 7.9% to RMB4.4 billion (US$0.6 billion) in the second quarter of 2024 from RMB4.1 billion in
the same period of 2023, primarily due to an increase in the GTV of existing home transactions facilitated through Lianjia agents. |
| · | Cost of home renovation and furnishing. The Company’s cost of revenues for home renovation
and furnishing increased by 50.2% to RMB2.8 billion (US$0.4 billion) in the second quarter of 2024 from RMB1.8 billion in the same period
of 2023, which was in line with the growth of net revenues from home renovation and furnishing. |
| · | Cost of home rental services. The Company’s cost of revenues for home rental services increased
by 138.2% to RMB3.0 billion (US$0.4 billion) in the second quarter of 2024 from RMB1.3 billion in the same period of 2023, primarily attributable
to the growth of net revenues from home rental services. |
| · | Cost related to stores. The Company’s cost related to stores was RMB681 million (US$94 million)
in the second quarter of 2024, compared with RMB730 million in the same period of 2023 primarily attributable to the decrease in the amortization
of the renovation costs for Lianjia stores. |
| · | Other costs. The Company’s other costs increased to RMB511 million (US$70 million) in the
second quarter of 2024 from RMB431 million in the same period of 2023, mainly due to the increased tax and surcharges in line with the
increased net revenues and the increased maintenance costs of home rental services. |
Gross Profit
Gross
profit increased by 22.0% to RMB6.5 billion (US$0.9 billion) in the second quarter of 2024 from RMB5.3 billion in the same
period of 2023. Gross margin was 27.9% in the second quarter of 2024, compared to 27.4% in the same period of 2023 primarily due to a)
a higher contribution margin for home renovation and furnishing primarily attributable to enhanced supply chain capabilities and continuous
refined management; b) a higher contribution margin for home rental services primarily due to improved operational efficiency; c) a lower
costs related to stores as percentage of net revenues; and d) partially offset by a lower contribution margin for new home transaction
services led by a higher commission-split as percentage of net revenues from new home transaction services paid to connected agents and
other channels.
Income
(Loss) from Operations
Total
operating expenses increased by 5.6% to RMB4.5 billion (US$0.6 billion) in the second quarter of 2024 from RMB4.3 billion in
the same period of 2023.
| · | General and administrative expenses were RMB2,079 million (US$286 million) in the second quarter
of 2024, relatively flat compared with RMB2,105 million in the same period of 2023. |
| · | Sales and marketing expenses increased by 14.1% to RMB1,882 million (US$259 million) in the second
quarter of 2024 from RMB1,649 million in the same period of 2023, mainly due to the increase in sales and marketing expenses for home
renovation and furnishing business in line with the growth of net revenues from home renovation and furnishing. |
| · | Research and development expenses increased by 6.3% to RMB505 million (US$69 million) in the second
quarter of 2024 from RMB475 million in the same period of 2023. |
Income
from operations was RMB2,015 million (US$277 million) in the second quarter of 2024, compared to income from operations of
RMB1,081 million in the same period of 2023. Operating margin increased to 8.6% in the second quarter of 2024 from 5.5% in the
same period of 2023, primarily due to a slight increase in gross margin and improved operating leverage in the second quarter of 2024,
compared to the same period of 2023.
Adjusted
income from operations6 was RMB2,813 million (US$387 million) in the second quarter of 2024, compared to RMB2,148
million in the same period of 2023. Adjusted operating margin7
was 12.0% in the second quarter of 2024, compared to 11.0% in the same period of 2023. Adjusted EBITDA8
was RMB3,372 million (US$464 million) in the second quarter of 2024, compared to RMB2,505 million in the same period of 2023.
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, and (iii) impairment of goodwill, intangible assets and other long-lived assets. 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, (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, (vii) impairment of goodwill, intangible assets and other long-lived assets, and (viii) impairment of investments.
Please refer to the section titled “Unaudited reconciliation of GAAP and non-GAAP results” for details.
Net Income
(Loss)
Net
income was RMB1,900 million (US$262 million) in the second quarter of 2024, compared to RMB1,300 million in the same period
of 2023.
Adjusted
net income was RMB2,693 million (US$371 million) in the second quarter of 2024, compared to RMB2,364 million in the same period
of 2023.
Net Income
(Loss) attributable to KE Holdings Inc.’s Ordinary Shareholders
Net
income attributable to KE Holdings Inc.’s ordinary shareholders was RMB1,892 million (US$260 million) in the second quarter
of 2024, compared to RMB1,309 million in the same period of 2023.
Adjusted
net income attributable to KE Holdings Inc.’s ordinary shareholders9 was RMB2,685 million (US$369 million)
in the second quarter of 2024, compared to RMB2,373 million in the same period of 2023.
Net
Income (Loss) per ADS
Basic
and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders10 were RMB1.67 (US$0.23)
and RMB1.61 (US$0.22) in the second quarter of 2024, respectively, compared to RMB1.10 and RMB1.08 in the same period of 2023, respectively.
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
goodwill, intangible assets and other long-lived assets, (v) impairment of investments, (vi) tax effects of the above non-GAAP
adjustments, and (vii) 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.
Adjusted
basic and diluted net income per ADS attributable to KE Holdings Inc.’s ordinary shareholders11 were RMB2.36
(US$0.32) and RMB2.28 (US$0.31) in the second quarter of 2024, respectively, compared to RMB2.00 and RMB1.96 in the same period of 2023,
respectively.
Cash, Cash
Equivalents, Restricted Cash and Short-Term Investments
As of June 30, 2024, the combined balance
of the Company’s cash, cash equivalents, restricted cash and short-term investments amounted to RMB59.7 billion (US$8.2 billion).
Upsizing
and Extension of Share Repurchase Program
As
previously disclosed, the Company established a share repurchase program in August 2022 and upsized and extended it in August 2023,
under which the Company may purchase up to US$2 billion of its Class A ordinary shares and/or ADSs until August 31, 2024
(the “Existing Share Repurchase Program”). As of the
date of this press release, the Company in aggregate has purchased approximately 95.0 million ADSs (representing approximately
285.0 million Class A ordinary shares) on the New York Stock Exchange with a total consideration of approximately US$1,389.8 million
under the Existing Share Repurchase Program since its launch.
On August 12, 2024, the Company’s
board of directors approved modifications to the Existing Share Repurchase Program, pursuant to which the repurchase authorization has
been further increased from US$2 billion to US$3 billion of its Class A ordinary shares and/or ADSs and extended until August 31,
2025 (the “Extended Share Repurchase Program”). In the annual general meeting (the “AGM”) held on
June 14, 2024, the shareholders of the Company have approved to grant the board of directors a general unconditional mandate to purchase
the Company’s own shares (the “2024 Share Repurchase Mandate”) which covers the repurchases to be made under
the Extended Share Repurchase Program until the conclusion of the next AGM of the Company. After the expiry of the 2024 Share Repurchase
Mandate, the Company will seek for another general unconditional mandate for repurchase from the shareholders of the Company at the next
AGM to continue its share repurchase under the Extended Share Repurchase Program.
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.
Conference
Call Information
The
Company will hold an earnings conference call at 8:00 A.M. U.S. Eastern Time on Monday, August 12, 2024 (8:00 P.M. Beijing/Hong
Kong Time on Monday, August 12, 2024) 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:
English
Line: https://s1.c-conf.com/diamondpass/10040170-jgu87y.html
Chinese
Simultaneous Interpretation Line (listen-only mode): https://s1.c-conf.com/diamondpass/10040172-lap9i8.html
A replay of the conference call will be accessible
through August 19, 2024, 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 (English line): |
10040170 |
| Replay PIN (Chinese simultaneous interpretation line): |
10040172 |
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 RMB7.2672 to
US$1.00, the noon buying rate in effect on June 28, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company
makes no representation that the RMB or US$ 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 formulating its business plan. 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 formulating its business plan. 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, (ii) amortization of intangible assets resulting from acquisitions and business
cooperation agreement, and (iii) impairment of goodwill, intangible assets and other long-lived assets. 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 goodwill, intangible assets and other long-lived assets, (v) impairment of
investments, and (vi) 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
goodwill, intangible assets and other long-lived assets, (v) impairment of investments, (vi) tax effects of the above non-GAAP
adjustments, and (vii) 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, (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, (vii) impairment
of goodwill, intangible assets and other long-lived assets, and (viii) 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 22 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 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.
For investor
and media inquiries, please contact:
In China:
KE Holdings
Inc.
Investor Relations
Siting Li
E-mail: ir@ke.com
Piacente Financial
Communications
Jenny Cai
Tel: +86-10-6508-0677
E-mail:
ke@tpg-ir.com
In the United
States:
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail:
ke@tpg-ir.com
Source: KE Holdings
Inc.
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share,
per share data)
| | |
As of
December 31, | | |
As of
June 30, | |
| | |
2023 | | |
2024 | |
| | |
RMB | | |
RMB | | |
US$ | |
| ASSETS | |
| | | |
| | | |
| | |
| Current assets | |
| | | |
| | | |
| | |
| Cash and cash equivalents | |
| 19,634,716 | | |
| 9,409,071 | | |
| 1,294,731 | |
| Restricted cash | |
| 6,222,745 | | |
| 8,117,582 | | |
| 1,117,016 | |
| Short-term investments | |
| 34,257,958 | | |
| 42,222,652 | | |
| 5,810,030 | |
| Short-term financing receivables, net of allowance for credit losses of RMB122,482 and RMB118,595 as of December 31, 2023 and June 30, 2024, respectively | |
| 1,347,759 | | |
| 1,460,169 | | |
| 200,926 | |
| Accounts receivable and contract assets, net of allowance for credit losses of RMB1,681,127 and RMB 1,687,261 as of December 31, 2023 and June 30, 2024, respectively | |
| 3,176,169 | | |
| 3,904,153 | | |
| 537,229 | |
| Amounts due from and prepayments to related parties | |
| 419,270 | | |
| 416,759 | | |
| 57,348 | |
| Loan receivables from related parties | |
| 28,030 | | |
| 27,770 | | |
| 3,821 | |
| Prepayments, receivables and other assets | |
| 4,666,976 | | |
| 5,098,886 | | |
| 701,631 | |
| Total current assets | |
| 69,753,623 | | |
| 70,657,042 | | |
| 9,722,732 | |
| Non-current assets | |
| | | |
| | | |
| | |
| Property, plant and equipment, net | |
| 1,965,098 | | |
| 2,065,608 | | |
| 284,237 | |
| Right-of-use assets | |
| 17,617,915 | | |
| 20,487,100 | | |
| 2,819,119 | |
| Long-term investments, net | |
| 23,570,988 | | |
| 22,132,865 | | |
| 3,045,584 | |
| Intangible assets, net | |
| 1,067,459 | | |
| 927,533 | | |
| 127,633 | |
| Goodwill | |
| 4,856,807 | | |
| 4,847,762 | | |
| 667,074 | |
| Long-term loan receivables from related parties | |
| 27,000 | | |
| 19,300 | | |
| 2,656 | |
| Other non-current assets | |
| 1,473,041 | | |
| 1,360,787 | | |
| 187,250 | |
| Total non-current assets | |
| 50,578,308 | | |
| 51,840,955 | | |
| 7,133,553 | |
| TOTAL ASSETS | |
| 120,331,931 | | |
| 122,497,997 | | |
| 16,856,285 | |
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
June 30, | |
| | |
2023 | | |
2024 | |
| | |
RMB | | |
RMB | | |
US$ | |
| LIABILITIES | |
| | | |
| | | |
| | |
| Current liabilities | |
| | | |
| | | |
| | |
| Accounts payable | |
| 6,328,516 | | |
| 6,684,706 | | |
| 919,846 | |
| Amounts due to related parties | |
| 430,350 | | |
| 398,473 | | |
| 54,832 | |
| Employee compensation and welfare payable | |
| 8,145,779 | | |
| 6,064,974 | | |
| 834,568 | |
| Customer deposits payable | |
| 3,900,564 | | |
| 5,794,761 | | |
| 797,386 | |
| Income taxes payable | |
| 698,568 | | |
| 747,112 | | |
| 102,806 | |
| Short-term borrowings | |
| 290,450 | | |
| 445,530 | | |
| 61,307 | |
| Lease liabilities current portion | |
| 9,368,607 | | |
| 11,632,047 | | |
| 1,600,623 | |
| Contract liability and deferred revenue | |
| 4,665,201 | | |
| 5,422,197 | | |
| 746,119 | |
| Accrued expenses and other current liabilities | |
| 5,695,948 | | |
| 6,186,560 | | |
| 851,299 | |
| Total current liabilities | |
| 39,523,983 | | |
| 43,376,360 | | |
| 5,968,786 | |
| Non-current liabilities | |
| | | |
| | | |
| | |
| Deferred tax liabilities | |
| 279,341 | | |
| 279,341 | | |
| 38,439 | |
| Lease liabilities non-current portion | |
| 8,327,113 | | |
| 8,136,397 | | |
| 1,119,605 | |
| Other non-current liabilities | |
| 389 | | |
| 2,791 | | |
| 384 | |
| Total non-current liabilities | |
| 8,606,843 | | |
| 8,418,529 | | |
| 1,158,428 | |
| TOTAL LIABILITIES | |
| 48,130,826 | | |
| 51,794,889 | | |
| 7,127,214 | |
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
June 30, | |
| | |
2023 | | |
2024 | |
| | |
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. 3,571,960,220 Class A ordinary shares issued and 3,443,860,844 Class A ordinary shares outstanding(1) as of December 31, 2023; 3,529,562,630 Class A ordinary shares issued and 3,395,696,348 Class A ordinary shares outstanding(1) as of June 30, 2024; and 151,354,549 and 147,500,681 Class B ordinary shares issued and outstanding as of December 31, 2023 and June 30, 2024, respectively) | |
| 475 | | |
| 467 | | |
| 64 | |
| Treasury shares | |
| (866,198 | ) | |
| (350,595 | ) | |
| (48,243 | ) |
| Additional paid-in capital | |
| 77,583,054 | | |
| 73,059,977 | | |
| 10,053,387 | |
| Statutory reserves | |
| 811,107 | | |
| 811,107 | | |
| 111,612 | |
| Accumulated other comprehensive income | |
| 244,302 | | |
| 397,365 | | |
| 54,679 | |
| Accumulated deficit | |
| (5,672,916 | ) | |
| (3,349,081 | ) | |
| (460,849 | ) |
| Total KE Holdings Inc. shareholders' equity | |
| 72,099,824 | | |
| 70,569,240 | | |
| 9,710,650 | |
| Non-controlling interests | |
| 101,281 | | |
| 133,868 | | |
| 18,421 | |
| TOTAL SHAREHOLDERS' EQUITY | |
| 72,201,105 | | |
| 70,703,108 | | |
| 9,729,071 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| 120,331,931 | | |
| 122,497,997 | | |
| 16,856,285 | |
| (1) | Excluding the Class A ordinary
shares registered in the name of the depositary bank for future issuance of ADSs upon the
exercise or vesting of awards granted under our share incentive plans and the Class A ordinary
shares repurchased but not cancelled in the form of ADSs. |
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS
(All amounts in thousands, except for share,
per share data, ADS and per ADS data)
| | |
For the Three Months Ended | |
For the Six Months Ended | |
| | |
June 30,
2023 | |
June 30,
2024 | |
June 30,
2024 | |
June 30,
2023 | |
June 30,
2024 | |
June 30,
2024 | |
| | |
RMB | |
RMB | |
US$ | |
RMB | |
RMB | |
US$ | |
| Net revenues | |
| |
| |
| |
| |
| |
| |
| Existing home transaction services | |
6,415,888 | |
7,334,889 | |
1,009,314 | |
15,597,087 | |
13,061,919 | |
1,797,380 | |
| New home transaction services | |
8,695,630 | |
7,933,805 | |
1,091,728 | |
17,099,714 | |
12,850,320 | |
1,768,263 | |
| Home renovation and furnishing | |
2,624,899 | |
4,040,224 | |
555,953 | |
4,032,830 | |
6,449,072 | |
887,422 | |
| Home rental services | |
1,193,534 | |
3,187,540 | |
438,620 | |
2,100,888 | |
5,812,743 | |
799,860 | |
| Emerging and other services | |
553,970 | |
873,972 | |
120,263 | |
931,482 | |
1,573,690 | |
216,547 | |
| Total net revenues | |
19,483,921 | |
23,370,430 | |
3,215,878 | |
39,762,001 | |
39,747,744 | |
5,469,472 | |
| Cost of revenues | |
| |
| |
| |
| |
| |
| |
| Commission-split | |
(5,753,173 | ) |
(5,439,667 | ) |
(748,523 | ) |
(11,363,560 | ) |
(8,857,846 | ) |
(1,218,880 | ) |
| Commission and compensation-internal | |
(4,118,839 | ) |
(4,444,340 | ) |
(611,562 | ) |
(9,360,775 | ) |
(8,065,289 | ) |
(1,109,821 | ) |
| Cost of home renovation and furnishing | |
(1,848,140 | ) |
(2,776,351 | ) |
(382,039 | ) |
(2,825,059 | ) |
(4,448,069 | ) |
(612,075 | ) |
| Cost of home rental services | |
(1,260,041 | ) |
(3,001,325 | ) |
(412,996 | ) |
(2,248,885 | ) |
(5,481,822 | ) |
(754,324 | ) |
| Cost related to stores | |
(729,912 | ) |
(680,930 | ) |
(93,699 | ) |
(1,415,651 | ) |
(1,365,977 | ) |
(187,965 | ) |
| Others | |
(430,626 | ) |
(510,767 | ) |
(70,284 | ) |
(855,083 | ) |
(889,605 | ) |
(122,413 | ) |
| Total cost of revenues(1) | |
(14,140,731 | ) |
(16,853,380 | ) |
(2,319,103 | ) |
(28,069,013 | ) |
(29,108,608 | ) |
(4,005,478 | ) |
| Gross profit | |
5,343,190 | |
6,517,050 | |
896,775 | |
11,692,988 | |
10,639,136 | |
1,463,994 | |
| Operating expenses | |
| |
| |
| |
| |
| |
| |
| Sales and marketing expenses(1) | |
(1,649,458 | ) |
(1,881,726 | ) |
(258,934 | ) |
(2,943,272 | ) |
(3,505,463 | ) |
(482,368 | ) |
| General and administrative expenses(1) | |
(2,105,234 | ) |
(2,079,299 | ) |
(286,121 | ) |
(3,726,483 | ) |
(4,098,494 | ) |
(563,972 | ) |
| Research and development expenses(1) | |
(474,789 | ) |
(504,509 | ) |
(69,423 | ) |
(931,529 | ) |
(971,809 | ) |
(133,725 | ) |
| Impairment of goodwill, intangible assets and other long-lived assets | |
(32,775 | ) |
(36,397 | ) |
(5,008 | ) |
(32,775 | ) |
(36,397 | ) |
(5,008 | ) |
| Total operating expenses | |
(4,262,256 | ) |
(4,501,931 | ) |
(619,486 | ) |
(7,634,059 | ) |
(8,612,163 | ) |
(1,185,073 | ) |
| Income from operations | |
1,080,934 | |
2,015,119 | |
277,289 | |
4,058,929 | |
2,026,973 | |
278,921 | |
| Interest income, net | |
338,735 | |
356,578 | |
49,067 | |
602,226 | |
666,253 | |
91,679 | |
| Share of results of equity investees | |
8,805 | |
351 | |
48 | |
14,475 | |
(3,735 | ) |
(514 | ) |
| Fair value changes in investments, net | |
29,841 | |
70,523 | |
9,704 | |
73,006 | |
78,288 | |
10,773 | |
| Impairment loss for equity investments accounted for using Measurement Alternative | |
(7,214 | ) |
(1,902 | ) |
(262 | ) |
(9,313 | ) |
(8,049 | ) |
(1,108 | ) |
| Foreign currency exchange loss | |
(50,540 | ) |
(55,277 | ) |
(7,606 | ) |
(15,833 | ) |
(73,025 | ) |
(10,049 | ) |
| Other income, net | |
172,310 | |
363,972 | |
50,084 | |
727,283 | |
901,610 | |
124,066 | |
| Income before income tax expense | |
1,572,871 | |
2,749,364 | |
378,324 | |
5,450,773 | |
3,588,315 | |
493,768 | |
| Income tax expense | |
(273,366 | ) |
(848,960 | ) |
(116,821 | ) |
(1,401,522 | ) |
(1,255,789 | ) |
(172,802 | ) |
| Net income | |
1,299,505 | |
1,900,404 | |
261,503 | |
4,049,251 | |
2,332,526 | |
320,966 | |
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (Continued)
(All amounts in thousands, except for share,
per share data, ADS and per ADS data)
| | |
For the Three Months Ended | |
For the Six Months Ended | |
| | |
June 30,
2023 | |
June 30,
2024 | |
June 30,
2024 | |
June 30,
2023 | |
June 30,
2024 | |
June 30,
2024 | |
| | |
RMB | |
RMB | |
US$ | |
RMB | |
RMB | |
US$ | |
| Net loss (income) attributable to non-controlling interests shareholders | |
9,228 | |
(8,343 | ) |
(1,148 | ) |
6,326 | |
(8,691 | ) |
(1,196 | ) |
| Net income attributable to KE Holdings Inc. | |
1,308,733 | |
1,892,061 | |
260,355 | |
4,055,577 | |
2,323,835 | |
319,770 | |
| Net income attributable to KE Holdings Inc.’s ordinary shareholders | |
1,308,733 | |
1,892,061 | |
260,355 | |
4,055,577 | |
2,323,835 | |
319,770 | |
| | |
| |
| |
| |
| |
| |
| |
| Net income | |
1,299,505 | |
1,900,404 | |
261,503 | |
4,049,251 | |
2,332,526 | |
320,966 | |
| Currency translation adjustments | |
1,233,419 | |
84,115 | |
11,575 | |
893,719 | |
120,450 | |
16,574 | |
| Unrealized gains (losses) on available-for-sale investments, net of reclassification | |
(15,649 | ) |
7,282 | |
1,002 | |
(1,024 | ) |
32,613 | |
4,488 | |
| | |
| |
| |
| |
| |
| |
| |
| Total comprehensive income | |
2,517,275 | |
1,991,801 | |
274,080 | |
4,941,946 | |
2,485,589 | |
342,028 | |
| Comprehensive loss (income) attributable to non-controlling interests shareholders | |
9,228 | |
(8,343 | ) |
(1,148 | ) |
6,326 | |
(8,691 | ) |
(1,196 | ) |
| Comprehensive income attributable to KE Holdings Inc. | |
2,526,503 | |
1,983,458 | |
272,932 | |
4,948,272 | |
2,476,898 | |
340,832 | |
| Comprehensive income attributable to KE Holdings Inc.’s ordinary shareholders | |
2,526,503 | |
1,983,458 | |
272,932 | |
4,948,272 | |
2,476,898 | |
340,832 | |
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (Continued)
(All amounts in thousands, except for share,
per share data, ADS and per ADS data)
| | |
For the Three Months Ended | |
For the Six Months Ended | |
| | |
June 30,
2023 | |
June 30,
2024 | |
June 30,
2024 | |
June 30,
2023 | |
June 30,
2024 | |
June 30,
2024 | |
| | |
RMB | |
RMB | |
US$ | |
RMB | |
RMB | |
US$ | |
| Weighted average number of ordinary shares used in
computing net income per share, basic and diluted | |
| |
| |
| |
| |
| |
| |
| | |
| |
| |
| |
| |
| |
| |
| —Basic | |
3,559,273,186 | |
3,406,250,235 | |
3,406,250,235 | |
3,555,127,466 | |
3,422,928,331 | |
3,422,928,331 | |
| | |
| |
| |
| |
| |
| |
| |
| —Diluted | |
3,632,443,288 | |
3,525,256,472 | |
3,525,256,472 | |
3,643,230,834 | |
3,533,558,988 | |
3,533,558,988 | |
| | |
| |
| |
| |
| |
| |
| |
| Weighted average number of ADS used in computing net income per ADS, basic and diluted | |
| |
| |
| |
| |
| |
| |
| | |
| |
| |
| |
| |
| |
| |
| —Basic | |
1,186,424,395 | |
1,135,416,745 | |
1,135,416,745 | |
1,185,042,489 | |
1,140,976,110 | |
1,140,976,110 | |
| | |
| |
| |
| |
| |
| |
| |
| —Diluted | |
1,210,814,429 | |
1,175,085,491 | |
1,175,085,491 | |
1,214,410,278 | |
1,177,852,996 | |
1,177,852,996 | |
| | |
| |
| |
| |
| |
| |
| |
| Net income per share attributable to KE Holdings Inc.'s ordinary shareholders | |
| |
| |
| |
| |
| |
| |
| | |
| |
| |
| |
| |
| |
| |
| —Basic | |
0.37 | |
0.56 | |
0.08 | |
1.14 | |
0.68 | |
0.09 | |
| | |
| |
| |
| |
| |
| |
| |
| —Diluted | |
0.36 | |
0.54 | |
0.07 | |
1.11 | |
0.66 | |
0.09 | |
| | |
| |
| |
| |
| |
| |
| |
| Net income per ADS attributable to KE Holdings Inc.'s
ordinary shareholders | |
| |
| |
| |
| |
| |
| |
| | |
| |
| |
| |
| |
| |
| |
| —Basic | |
1.10 | |
1.67 | |
0.23 | |
3.42 | |
2.04 | |
0.28 | |
| | |
| |
| |
| |
| |
| |
| |
| —Diluted | |
1.08 | |
1.61 | |
0.22 | |
3.34 | |
1.97 | |
0.27 | |
| | |
| |
| |
| |
| |
| |
| |
| (1) Includes share-based compensation expenses as follows: | |
| |
| |
| |
| |
| |
| |
| | |
| |
| |
| |
| |
| |
| |
| Cost of revenues | |
132,570 | |
125,401 | |
17,256 | |
226,566 | |
249,834 | |
34,379 | |
| | |
| |
| |
| |
| |
| |
| |
| Sales and marketing expenses | |
46,416 | |
43,458 | |
5,980 | |
77,481 | |
90,761 | |
12,489 | |
| General and administrative expenses | |
655,554 | |
513,776 | |
70,698 | |
1,188,897 | |
1,090,910 | |
150,114 | |
| Research and development expenses | |
46,687 | |
48,416 | |
6,662 | |
90,038 | |
92,926 | |
12,787 | |
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 |
|
|
For the Six Months Ended |
|
| |
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
| |
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
| Income from operations |
|
|
1,080,934 |
|
|
|
2,015,119 |
|
|
|
277,289 |
|
|
|
4,058,929 |
|
|
|
2,026,973 |
|
|
|
278,921 |
|
| Share-based compensation expenses |
|
|
881,227 |
|
|
|
731,051 |
|
|
|
100,596 |
|
|
|
1,582,982 |
|
|
|
1,524,431 |
|
|
|
209,769 |
|
| Amortization of intangible assets resulting from acquisitions and business cooperation agreement |
|
|
152,640 |
|
|
|
29,991 |
|
|
|
4,127 |
|
|
|
302,773 |
|
|
|
184,284 |
|
|
|
25,358 |
|
| Impairment of goodwill, intangible assets and other long-lived assets |
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
| Adjusted income from operations |
|
|
2,147,576 |
|
|
|
2,812,558 |
|
|
|
387,020 |
|
|
|
5,977,459 |
|
|
|
3,772,085 |
|
|
|
519,056 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
1,299,505 |
|
|
|
1,900,404 |
|
|
|
261,503 |
|
|
|
4,049,251 |
|
|
|
2,332,526 |
|
|
|
320,966 |
|
| Share-based compensation expenses |
|
|
881,227 |
|
|
|
731,051 |
|
|
|
100,596 |
|
|
|
1,582,982 |
|
|
|
1,524,431 |
|
|
|
209,769 |
|
| Amortization of intangible assets resulting from acquisitions and business cooperation agreement |
|
|
152,640 |
|
|
|
29,991 |
|
|
|
4,127 |
|
|
|
302,773 |
|
|
|
184,284 |
|
|
|
25,358 |
|
| Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration |
|
|
(2,671 |
) |
|
|
87 |
|
|
|
12 |
|
|
|
(38,581 |
) |
|
|
13,278 |
|
|
|
1,827 |
|
| Impairment of goodwill, intangible assets and other long-lived assets |
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
| Impairment of investments |
|
|
7,214 |
|
|
|
1,902 |
|
|
|
262 |
|
|
|
9,313 |
|
|
|
8,049 |
|
|
|
1,108 |
|
| Tax effects on non-GAAP adjustments |
|
|
(6,562 |
) |
|
|
(6,494 |
) |
|
|
(894 |
) |
|
|
(13,122 |
) |
|
|
(13,410 |
) |
|
|
(1,845 |
) |
| Adjusted net income |
|
|
2,364,128 |
|
|
|
2,693,338 |
|
|
|
370,614 |
|
|
|
5,925,391 |
|
|
|
4,085,555 |
|
|
|
562,191 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
1,299,505 |
|
|
|
1,900,404 |
|
|
|
261,503 |
|
|
|
4,049,251 |
|
|
|
2,332,526 |
|
|
|
320,966 |
|
| Income tax expense |
|
|
273,366 |
|
|
|
848,960 |
|
|
|
116,821 |
|
|
|
1,401,522 |
|
|
|
1,255,789 |
|
|
|
172,802 |
|
| Share-based compensation expenses |
|
|
881,227 |
|
|
|
731,051 |
|
|
|
100,596 |
|
|
|
1,582,982 |
|
|
|
1,524,431 |
|
|
|
209,769 |
|
| Amortization of intangible assets |
|
|
156,994 |
|
|
|
36,012 |
|
|
|
4,955 |
|
|
|
309,914 |
|
|
|
194,518 |
|
|
|
26,767 |
|
| Depreciation of property, plant and equipment |
|
|
195,093 |
|
|
|
173,690 |
|
|
|
23,901 |
|
|
|
384,815 |
|
|
|
338,859 |
|
|
|
46,629 |
|
| Interest income, net |
|
|
(338,735 |
) |
|
|
(356,578 |
) |
|
|
(49,067 |
) |
|
|
(602,226 |
) |
|
|
(666,253 |
) |
|
|
(91,679 |
) |
| Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration |
|
|
(2,671 |
) |
|
|
87 |
|
|
|
12 |
|
|
|
(38,581 |
) |
|
|
13,278 |
|
|
|
1,827 |
|
| Impairment of goodwill, intangible assets and other long-lived assets |
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
| Impairment of investments |
|
|
7,214 |
|
|
|
1,902 |
|
|
|
262 |
|
|
|
9,313 |
|
|
|
8,049 |
|
|
|
1,108 |
|
| Adjusted EBITDA |
|
|
2,504,768 |
|
|
|
3,371,925 |
|
|
|
463,991 |
|
|
|
7,129,765 |
|
|
|
5,037,594 |
|
|
|
693,197 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income attributable to KE Holdings Inc.’s ordinary shareholders |
|
|
1,308,733 |
|
|
|
1,892,061 |
|
|
|
260,355 |
|
|
|
4,055,577 |
|
|
|
2,323,835 |
|
|
|
319,770 |
|
| Share-based compensation expenses |
|
|
881,227 |
|
|
|
731,051 |
|
|
|
100,596 |
|
|
|
1,582,982 |
|
|
|
1,524,431 |
|
|
|
209,769 |
|
| Amortization of intangible assets resulting from acquisitions and business cooperation agreement |
|
|
152,640 |
|
|
|
29,991 |
|
|
|
4,127 |
|
|
|
302,773 |
|
|
|
184,284 |
|
|
|
25,358 |
|
| Changes in fair value from long-term investments, loan receivables measured at fair value and contingent consideration |
|
|
(2,671 |
) |
|
|
87 |
|
|
|
12 |
|
|
|
(38,581 |
) |
|
|
13,278 |
|
|
|
1,827 |
|
| Impairment of goodwill, intangible assets and other long-lived assets |
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
|
|
32,775 |
|
|
|
36,397 |
|
|
|
5,008 |
|
| Impairment of investments |
|
|
7,214 |
|
|
|
1,902 |
|
|
|
262 |
|
|
|
9,313 |
|
|
|
8,049 |
|
|
|
1,108 |
|
| Tax effects on non-GAAP adjustments |
|
|
(6,562 |
) |
|
|
(6,494 |
) |
|
|
(894 |
) |
|
|
(13,122 |
) |
|
|
(13,410 |
) |
|
|
(1,845 |
) |
| Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders |
|
|
(7 |
) |
|
|
(7 |
) |
|
|
(1 |
) |
|
|
(14 |
) |
|
|
(14 |
) |
|
|
(2 |
) |
| Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders |
|
|
2,373,349 |
|
|
|
2,684,988 |
|
|
|
369,465 |
|
|
|
5,931,703 |
|
|
|
4,076,850 |
|
|
|
560,993 |
|
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 |
|
|
For the Six Months Ended |
|
| |
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
| |
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
| Weighted average number of ADS used in computing net income per ADS, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Basic |
|
|
1,186,424,395 |
|
|
|
1,135,416,745 |
|
|
|
1,135,416,745 |
|
|
|
1,185,042,489 |
|
|
|
1,140,976,110 |
|
|
|
1,140,976,110 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Diluted |
|
|
1,210,814,429 |
|
|
|
1,175,085,491 |
|
|
|
1,175,085,491 |
|
|
|
1,214,410,278 |
|
|
|
1,177,852,996 |
|
|
|
1,177,852,996 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of ADS used in calculating adjusted net income per ADS, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Basic |
|
|
1,186,424,395 |
|
|
|
1,135,416,745 |
|
|
|
1,135,416,745 |
|
|
|
1,185,042,489 |
|
|
|
1,140,976,110 |
|
|
|
1,140,976,110 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Diluted |
|
|
1,210,814,429 |
|
|
|
1,175,085,491 |
|
|
|
1,175,085,491 |
|
|
|
1,214,410,278 |
|
|
|
1,177,852,996 |
|
|
|
1,177,852,996 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Basic |
|
|
1.10 |
|
|
|
1.67 |
|
|
|
0.23 |
|
|
|
3.42 |
|
|
|
2.04 |
|
|
|
0.28 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Diluted |
|
|
1.08 |
|
|
|
1.61 |
|
|
|
0.22 |
|
|
|
3.34 |
|
|
|
1.97 |
|
|
|
0.27 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP adjustments to net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Basic |
|
|
0.90 |
|
|
|
0.69 |
|
|
|
0.09 |
|
|
|
1.59 |
|
|
|
1.53 |
|
|
|
0.21 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Diluted |
|
|
0.88 |
|
|
|
0.67 |
|
|
|
0.09 |
|
|
|
1.54 |
|
|
|
1.49 |
|
|
|
0.21 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Basic |
|
|
2.00 |
|
|
|
2.36 |
|
|
|
0.32 |
|
|
|
5.01 |
|
|
|
3.57 |
|
|
|
0.49 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| —Diluted |
|
|
1.96 |
|
|
|
2.28 |
|
|
|
0.31 |
|
|
|
4.88 |
|
|
|
3.46 |
|
|
|
0.48 |
|
KE Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
(All amounts in thousands)
| |
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
| |
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
| |
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
| Net cash provided by (used in) operating activities |
|
|
(196,144 |
) |
|
|
4,772,954 |
|
|
|
656,778 |
|
|
|
7,431,689 |
|
|
|
3,857,678 |
|
|
|
530,836 |
|
| Net cash provided by (used in) investing activities |
|
|
2,055,696 |
|
|
|
(8,134,019 |
) |
|
|
(1,119,277 |
) |
|
|
7,633,614 |
|
|
|
(6,843,593 |
) |
|
|
(941,709 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash used in financing activities |
|
|
(2,537,964 |
) |
|
|
(3,931,260 |
) |
|
|
(540,959 |
) |
|
|
(2,869,607 |
) |
|
|
(5,377,054 |
) |
|
|
(739,907 |
) |
| Effect of exchange rate change on cash, cash equivalents and restricted cash |
|
|
36,149 |
|
|
|
35,666 |
|
|
|
4,908 |
|
|
|
22,137 |
|
|
|
32,161 |
|
|
|
4,422 |
|
| Net increase (decrease) in cash and cash equivalents and restricted cash |
|
|
(642,263 |
) |
|
|
(7,256,659 |
) |
|
|
(998,550 |
) |
|
|
12,217,833 |
|
|
|
(8,330,808 |
) |
|
|
(1,146,358 |
) |
| Cash, cash equivalents and restricted cash at the beginning of the period |
|
|
38,454,355 |
|
|
|
24,783,312 |
|
|
|
3,410,297 |
|
|
|
25,594,259 |
|
|
|
25,857,461 |
|
|
|
3,558,105 |
|
| Cash, cash equivalents and restricted cash at the end of the period |
|
|
37,812,092 |
|
|
|
17,526,653 |
|
|
|
2,411,747 |
|
|
|
37,812,092 |
|
|
|
17,526,653 |
|
|
|
2,411,747 |
|
KE Holdings Inc.
UNAUDITED SEGMENT CONTRIBUTION
MEASURE
(All amounts in thousands)
| |
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
| |
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
|
June 30,
2023 |
|
|
June 30,
2024 |
|
|
June 30,
2024 |
|
| |
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
| Existing home transaction services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
|
6,415,888 |
|
|
|
7,334,889 |
|
|
|
1,009,314 |
|
|
|
15,597,087 |
|
|
|
13,061,919 |
|
|
|
1,797,380 |
|
| Less: Commission and compensation |
|
|
(3,490,480 |
) |
|
|
(3,851,787 |
) |
|
|
(530,024 |
) |
|
|
(8,169,959 |
) |
|
|
(7,032,712 |
) |
|
|
(967,733 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contribution |
|
|
2,925,408 |
|
|
|
3,483,102 |
|
|
|
479,290 |
|
|
|
7,427,128 |
|
|
|
6,029,207 |
|
|
|
829,647 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| New home transaction services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
|
8,695,630 |
|
|
|
7,933,805 |
|
|
|
1,091,728 |
|
|
|
17,099,714 |
|
|
|
12,850,320 |
|
|
|
1,768,263 |
|
| Less: Commission and compensation |
|
|
(6,330,323 |
) |
|
|
(5,947,840 |
) |
|
|
(818,450 |
) |
|
|
(12,462,059 |
) |
|
|
(9,768,943 |
) |
|
|
(1,344,251 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contribution |
|
|
2,365,307 |
|
|
|
1,985,965 |
|
|
|
273,278 |
|
|
|
4,637,655 |
|
|
|
3,081,377 |
|
|
|
424,012 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Home renovation and furnishing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
|
2,624,899 |
|
|
|
4,040,224 |
|
|
|
555,953 |
|
|
|
4,032,830 |
|
|
|
6,449,072 |
|
|
|
887,422 |
|
| Less: Material costs, commission and compensation |
|
|
(1,848,140 |
) |
|
|
(2,776,351 |
) |
|
|
(382,039 |
) |
|
|
(2,825,059 |
) |
|
|
(4,448,069 |
) |
|
|
(612,075 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contribution |
|
|
776,759 |
|
|
|
1,263,873 |
|
|
|
173,914 |
|
|
|
1,207,771 |
|
|
|
2,001,003 |
|
|
|
275,347 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Home rental services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
|
1,193,534 |
|
|
|
3,187,540 |
|
|
|
438,620 |
|
|
|
2,100,888 |
|
|
|
5,812,743 |
|
|
|
799,860 |
|
| Less: Property leasing costs, commission and compensation |
|
|
(1,260,041 |
) |
|
|
(3,001,325 |
) |
|
|
(412,996 |
) |
|
|
(2,248,885 |
) |
|
|
(5,481,822 |
) |
|
|
(754,324 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Deficit)/Contribution |
|
|
(66,507 |
) |
|
|
186,215 |
|
|
|
25,624 |
|
|
|
(147,997 |
) |
|
|
330,921 |
|
|
|
45,536 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Emerging and other services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net revenues |
|
|
553,970 |
|
|
|
873,972 |
|
|
|
120,263 |
|
|
|
931,482 |
|
|
|
1,573,690 |
|
|
|
216,547 |
|
| Less: Commission and compensation |
|
|
(51,209 |
) |
|
|
(84,380 |
) |
|
|
(11,611 |
) |
|
|
(92,317 |
) |
|
|
(121,480 |
) |
|
|
(16,717 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contribution |
|
|
502,761 |
|
|
|
789,592 |
|
|
|
108,652 |
|
|
|
839,165 |
|
|
|
1,452,210 |
|
|
|
199,830 |
|
Exhibit 99.2
KE Holdings Inc. Announces Upsizing and Extension
of Share Repurchase Program
BEIJING, China, August 12, 2024 - 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 that its board of directors has approved the upsizing and extension of its share repurchase program.
As previously disclosed, the Company established
a share repurchase program in August 2022 and upsized and extended it in August 2023, under which the Company may purchase up
to US$2.0 billion of its Class A ordinary shares and/or American depositary shares (“ADSs”) until August 31,
2024 (the “Existing Share Repurchase Program”). As of
the date of this press release, the Company in aggregate has purchased approximately 95.0 million ADSs (representing approximately
285.0 million Class A ordinary shares) on the New York Stock Exchange with a total consideration of approximately US$1,389.8 million
under the Existing Share Repurchase Program since its launch.
On August 12, 2024, the Company’s
board of directors approved modifications to the Existing Share Repurchase Program, pursuant to which the repurchase authorization has
been further increased from US$2.0 billion to US$3.0 billion of its Class A ordinary shares and/or ADSs and extended until August 31,
2025 (the “Extended Share Repurchase Program”). In the annual general meeting (the “AGM”) held on
June 14, 2024, the shareholders of the Company have approved to grant the board of directors a general unconditional mandate to purchase
the Company’s own shares (the “2024 Share Repurchase Mandate”) which covers the repurchases under the Extended
Share Repurchase Program until the conclusion of the next AGM of the Company. After the expiry of the 2024 Share Repurchase Mandate, the
Company will seek for another general unconditional mandate for repurchase from the shareholders of the Company at the next AGM to continue
its share repurchase under the Extended Share Repurchase Program.
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 22 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. 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.
For investor
and media inquiries, please contact:
In China:
KE Holdings
Inc.
Investor Relations
Siting Li
E-mail: ir@ke.com
Piacente Financial
Communications
Jenny Cai
Tel: +86-10-6508-0677
E-mail: ke@tpg-ir.com
In the United
States:
Piacente Financial
Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: ke@tpg-ir.com
Source: KE Holdings
Inc.
Exhibit 99.3
Hong Kong Exchanges and Clearing Limited and
The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its
accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole
or any part of the contents of this announcement.
KE Holdings Inc.
貝殼控股有限公司
(A company controlled through weighted voting
rights and incorporated in the Cayman Islands with limited liability)
(Stock Code: 2423)
INTERIM RESULTS ANNOUNCEMENT FOR
THE SIX MONTHS ENDED JUNE 30, 2024
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 six months ended June 30, 2024 (the “Reporting Period”),
which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), which are different
from the IFRS Accounting Standards.
In this announcement, “we,” “us,”
and “our” refer to the Company and where the context otherwise requires, the Group (as defined under the “General Information”
section).
|
OPERATIONAL AND FINANCIAL HIGHLIGHTS FOR THE
SIX MONTHS ENDED JUNE 30, 2024
● Gross
transaction value (GTV)1 was RMB1,468.9 billion for the six months ended June 30, 2024, representing a decrease of
16.2% from RMB1,752.1 billion in the same period of 2023. GTV of existing home transactions was RMB1,023.8 billion for the six
months ended June 30, 2024, representing a decrease of 8.7% from RMB1,120.8 billion in the same period of 2023. GTV of new home
transactions was RMB387.1 billion for the six months ended June 30, 2024, representing a decrease of 32.4% from RMB572.9 billion
in the same period of 2023. GTV of home renovation and furnishing was RMB7.6 billion for the six months ended June 30, 2024,
representing an increase of 24.0% from RMB6.1 billion in the same period of 2023. GTV of emerging and other services was RMB50.3
billion for the six months ended June 30, 2024, representing a decrease of 3.9% from RMB52.3 billion in the same period of 2023.
● Net
revenues were RMB39.7 billion for the six months ended June 30, 2024, relatively flat compared with RMB39.8 billion in the same
period of 2023.
|
| 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 (excluding home rental 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. |
|
● Net
income was RMB2,333 million for the six months ended June 30, 2024, compared to RMB4,049 million in the same period of 2023.
Adjusted net income2 was RMB4,086 million for the six months ended June 30, 2024, compared to RMB5,925 million
in the same period of 2023.
● Number
of stores was 45,948 as of June 30, 2024, a 6.9% increase from 43,000 as of June 30, 2023. Number of active stores3
was 44,423 as of June 30, 2024, an 8.1% increase from 41,076 as of June 30, 2023.
● Number
of agents was 458,690 as of June 30, 2024, a 5.2% increase from 435,813 as of June 30, 2023. Number of active agents4
was 411,478 as of June 30, 2024, relatively stable compared with 409,054 as of June 30, 2023.
● Mobile
monthly active users (MAU)5 averaged 49.7 million for the three months ended June 30, 2024, compared to 48.0 million
for the three months ended June 30, 2023.
|
| 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 goodwill, intangible
assets and other long-lived assets, (v) impairment of investments, and (vi) 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 number of active agents and active stores 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.
| 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. |
| 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. |
BUSINESS REVIEW
AND OUTLOOK
Business Review for the Reporting Period
China’s real estate market was relatively
muted year-over-year in the first quarter of 2024 due to a high base effect in 2023 and seasonal factors, but the second quarter saw
gradual improvements as various supportive policies were implemented. We consistently maintained a neutral market perspective, continuously
deepened our operations, empowered service providers and store owners, and supported the rapid growth of new businesses, all of which
contributed to a high-quality operational performance. Our existing home and new home businesses outperformed the market in the first
half of 2024, while home renovation and furnishing and home rental services became our new growth engines. Revenue from non-housing transaction
services accounted for 34.8% of total net revenues in the first half of 2024, a significant increase of 17 percentage points compared
to the same period last year, further demonstrating our solid footing to a model of “one-stop residential services platform.”
Additionally, we continued to enhance shareholder returns, optimize our capital structure, and improve capital operational efficiency,
creating and continuously increasing long-term value for our shareholders.
Existing home transaction services
In the first half of 2024, amidst the gradual
improvement of the existing housing market, our existing home transaction services achieved robust development, benefiting from the reinforcement
of our agent and store network and the advancement of refined operations.
With a goal focused on driving growth and building
a harmonious ecosystem, we actively connect with high-quality brands, stores, and agents. As of June 30, 2024, the number of active
stores on our platform reached 44,423, up by 8.1% year-over-year, while the number of active agents was 411,478, rising by 0.6% year-over-year.
We offer supportive initiatives such as fee discounts
and installment plans to brands for the new store connections. Through our customized integration plan, we help them accelerate growth
and improve efficiency, effectively unleashing their potential. Simultaneously, we have implemented refined operational measures including
property listing reviews and focusing on “quality property listings”, along with technological products such as smart homeowner
maintenance assistant and AI-driven home selection tools to enhance agents’ operational capabilities and efficiency. We also developed
an online workbench for store owners to streamline management processes and support scientific store management.
We continue to optimize the platform ecosystem
by mobilize more city operation teams to participate in high-risk store management and leveraging data capabilities to pre-identify high-risk
stores and reduce the risk of violations. At the same time, we are continuously improving the underlying mechanisms of our platform ecosystem,
expanding the coverage of regional co-governance councils, and encouraging store owners to actively participate in ecosystem governance,
jointly promoting healthy competition in the industry.
In the operation of our self-owned brand, Lianjia,
we are exploring the transformation to a one-stop residential services model based on the agent-store model. We are advancing the large
store model and, at the same time, experimenting with different store formats in Shanghai Lianjia. This includes increasing community
coverage through community convenience service stations and establishing stores equipped with home renovation scenarios, positioning them
as gateways to one-stop residential services.
New home transaction services
In the first half of 2024, our new home transaction
services significantly outperformed the industry, maintaining strong monetization capability. The resilience of our business primarily
stems from expanded channel coverage and enhanced sell-through capabilities.
As the new home market shifts to a buyer’s
market, the role of channels has evolved from mere sales to insight and analysis of customer needs, working with developers to address
new home buyers’ pain points. Therefore, we have proactively established strategic partnerships with more high-quality developers
through innovative service product models to increase our coverage of high-quality projects.
In terms of sell-through capability, we have expanded
our new home agent base, and higher monetization rates for new home sales in a buyer’s market also served as a strong incentive
for our agents. At the same time, we leverage technology to help precise matching of homes and buyers, identifying potential clients,
and improving selling efficiency. Additionally, leveraging our capabilities on multiple residential services, we integrate existing home
and new home businesses to facilitate customers to sell their old homes and buy new ones smoothly. We also provide a range of services,
such as home renovation and rental, to bring service innovation to developers and address customers’ home buying challenges.
We adhered to a strict risk control baseline.
Our account receivable turnover days of new home transaction services shortened to 45 days in the second quarter of 2024. Net revenue
derived from the “Commission in Advance” model, with commissions prepaid by developers, accounted for around 49% of total
net revenue from new home transaction services, remaining at a high level. The percentage of commission income from state-owned developers
reached around 55% in the second quarter of 2024, up from around 47% in the same period of 2023.
Home renovation and furnishing services
Our home renovation and furnishing services have
maintained steady growth, with a 24.0% year-on-year increase in total GTV and a 59.9% year-on-year rise in revenue for the first half
of 2024. Alongside this scale growth, profitability has also strengthened, with the contribution margin for home renovation and furnishing
reaching 31.0% in the first half of 2024.
In 2024, we focused on strengthening the foundational
capabilities of our home renovation and furnishing services. We are advancing the development of our digital system capabilities based
on Home SaaS, promoting a unified business model framework for our home renovation and furnishing services nationwide. Our Home SaaS has
now been updated to version 2.5, incorporating our continuously restructured processes and standards, and it has been implemented in several
cities. Compared to previous versions, Home SaaS 2.5 mainly upgrades two modules: the BIM Shared Service Centre mid-office module and
the integrated material fulfillment module. These additions enable the generation of standardized construction drawings and automatic
renovation quotations, enhance designer efficiency, and reduce error rates. The materials fulfillment module also achieves unified online
scheduling for various main material categories, increasing the certainty of material delivery.
In terms of delivery capability optimization,
we have shortened construction periods by improving order dispatch efficiency and refining construction processes. The combined construction
period for basic construction and main materials in the second quarter of 2024 reduced notably year-over-year. On customized furniture
delivery, by setting relevant standards and enhancing training of service providers, we improved the success rate of one-time installation
of customized furniture.
Home rental services
Our home rental services have grown rapidly, with
revenue primarily coming from the decentralized rental property management service Carefree Rent. As of the end of the second quarter
of 2024, home units under Carefree Rent exceeded 300,000, compared with over 120,000 at the same time in 2023. The number of units
managed under our centralized long-term apartments was over 14,000 by the end of the second quarter, compared to over 7,000 as of the
same date of 2023.
In terms of service quality, we focus on addressing
tenants’ core pain points by providing service guarantees and continuously refining our standardized service capabilities. We ensure
timely and high-quality responses to tenant issues, enhancing the overall rental experience.
At the same time, we advanced the rental efficiency
of Carefree Rent through various efforts, reducing the vacancy costs, and strengthening operation stability. We continuously iterate
on the Carefree Rent product model to enhance our ability to withstand rental income fluctuations. In terms of renting-out, we
established stable rental channels by building dedicated teams and improving productivity. Building on this foundation, combined with
efficiency gains from refined operations, we have achieved an increase in the first-time rental success rate and a reduction in the number
of days needed for second-time rentals.
Business Outlook
The accelerating transformation of the China’s
real estate industry is driving it towards a new era, with consumers’ demand for “better living” increasingly on the
rise. The growth potential for our home transaction services remains significant, and the business models and capabilities of our home
renovation and furnishing and home rental services have also been validated. Looking ahead, our core goal is to build an organization
that can continuously progress from one success to the next. Our next step is to achieve sustained growth by driving a positive cycle
of scale, quality, and efficiency.
SHAREHOLDER
RETURNS
While achieving robust performance, we also placed
a high priority on shareholder returns. As at the date of this announcement, this year we have allocated approximately US$480 million
to our Existing Share Repurchase Program (as defined below), repurchasing a total number of American depositary shares (the “ADSs”)
that represents approximately 2.75% of our total issued shares by the end of 2023. Cumulatively, since the launch of our Existing Share
Repurchase Program in September 2022 up to the date of this announcement, we have repurchased around US$1.39 billion worth of ADSs,
which represents approximately 7.51% of the Company’s total issued shares prior to the launch of the Existing Share Repurchase Program.
Additionally, on August 12, 2024, our board of directors has approved the upsizing and extension of our Existing Share Repurchase
Program. The repurchase authorization has been increased from US$2 billion to US$3 billion, and the program’s duration has been
extended to August 31, 2025. With our substantial cash reserves and robust financial management capabilities, we aim to create and
continuously enhance long-term value for our shareholders through our proactive shareholders return initiatives.
MANAGEMENT DISCUSSION
AND ANALYSIS
Net Revenues
Net revenues were RMB39.7 billion for the
six months ended June 30, 2024, relatively flat compared with RMB39.8 billion in the same period of 2023, primarily attributable
to the decreased net revenues from existing and new home transaction services, offset by the expansion of our home renovation and furnishing
and home rental business. Total GTV decreased by 16.2% to RMB1,468.9 billion for the six months ended June 30, 2024, from RMB1,752.1
billion in the same period of 2023, primarily attributable to the high base effect of the housing transaction market for the six months
ended June 30, 2023, especially for the three months ended March 31, 2023, and the sluggish new home transaction market for
the six months ended June 30, 2024, while the new home transaction market also experienced a sequential recovery month-on-month for
the three months ended June 30, 2024 driven by the release of the supportive policies.
| ● | Net revenues from existing home transaction services decreased by 16.3% to RMB13.1 billion for
the six months ended June 30, 2024, compared to RMB15.6 billion in the same period of 2023, primarily due to an 8.7% decrease in
GTV of existing home transactions to RMB1,023.8 billion for the six months ended June 30, 2024, from RMB1,120.8 billion in the same
period of 2023. The difference in year-over-year change rate between the GTV of existing home transactions and that of net revenues was
primarily attributable to a lower commission rate for existing home transaction services charged by Lianjia stores in Beijing,
and a higher contribution from GTV of existing home transactions served by connected agents on the Company’s platform, for which
revenue is recorded on a net commission basis from platform service, franchise service and other value-added services, while for GTV served
by Lianjia agents is recorded on a gross basis. |
| | Among that, (i) commission revenue decreased by 17.5% to RMB10.6 billion for the six
months ended June 30, 2024, from RMB12.9 billion in the same period of 2023, primarily due to a decrease in GTV of existing
home transactions served by Lianjia stores of 11.9% to RMB412.4 billion for the six months ended June 30, 2024, from
RMB468.2 billion in the same period of 2023 and the decreased commission rate for existing home transaction services charged by Lianjia
stores in Beijing; and |
| | (ii) the 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, decreased by 10.5% to RMB2.5
billion for the six months ended June 30, 2024, from RMB2.7 billion in the same period of 2023, mainly due to a 6.3%
decrease of GTV of existing home transactions served by connected agents on the Company’s platform to RMB611.5 billion for the
six months ended June 30, 2024, from RMB652.6 billion in the same period of 2023. |
| ● | Net revenues from new home transaction services decreased by 24.9% to RMB12.9 billion for the six
months ended June 30, 2024, from RMB17.1 billion in the same period of 2023, primarily due to the decrease of GTV of new home transactions
of 32.4% to RMB387.1 billion for the six months ended June 30, 2024, from RMB572.9 billion in the same period of 2023, partially
offset by our improved monetization capability. Among that, the GTV of new home transactions facilitated on the Beike platform
through connected agents, dedicated sales team with the expertise on new home transaction services and other sales channels decreased
by 33.0% to RMB313.8 billion for the six months ended June 30, 2024, from RMB468.3 billion in the same period of 2023, while the
GTV of new home transactions served by Lianjia brand decreased by 29.9% to RMB73.3 billion for the six months ended June 30,
2024, from RMB104.6 billion in the same period of 2023. |
| ● | Net revenues from home renovation and furnishing increased by 59.9% to RMB6.4 billion for the six
months ended June 30, 2024 from RMB4.0 billion in the same period of 2023, primarily attributable to a) the increase of orders driven
by the synergetic effects from customer acquisition and conversion between home transaction services and home renovation and furnishing
business, b) a larger contribution from furniture and home furnishing sales (in categories such as customized furniture, soft furnishings,
and electrical appliances), and c) shortened lead time driven by enhanced delivery capabilities. |
| ● | Net revenues from home rental services increased by 176.7% to RMB5.8 billion for the six months
ended June 30, 2024, from RMB2.1 billion in the same period of 2023, primarily attributable to the increase of the number of rental
units under the Carefree Rent model. |
| ● | Net revenues from emerging and other services were RMB1.6 billion for the six months ended June 30,
2024, compared to RMB0.9 billion in the same period of 2023. |
Cost of Revenues
Total cost of revenues were RMB29.1 billion
for the six months ended June 30, 2024, relatively flat compared with RMB28.1 billion in the same period of 2023.
| ● | Commission – split. The Company’s cost of revenues for commissions to connected agents
and other sales channels decreased by 22.1% to RMB8.9 billion for the six months ended June 30, 2024 from RMB11.4 billion in the
same period of 2023, primarily due to the decrease in the GTV of new home transactions facilitated through connected agents and other
sales channels for the six months ended June 30, 2024 compared with the same period of 2023. |
| ● | Commission and compensation – internal. The Company’s cost of revenues for internal
commission and compensation decreased by 13.8% to RMB8.1 billion for the six months ended June 30, 2024, compared to RMB9.4 billion
in the same period of 2023, primarily due to the decrease in the GTV of existing home and new home transactions facilitated through Lianjia
agents. |
| ● | Cost of home renovation and furnishing. The Company’s cost of revenues for home renovation
and furnishing increased by 57.5% to RMB4.4 billion for the six months ended June 30, 2024 from RMB2.8 billion in the same period
of 2023, which was in line with net revenues from home renovation and furnishing. |
| ● | Cost of home rental services. The Company’s cost of revenues for home rental services increased
by 143.8% to RMB5.5 billion for the six months ended June 30, 2024 from RMB2.2 billion in the same period of 2023, primarily attributable
to the growth of net revenues from home rental services. |
| ● | Cost related to stores. The Company’s cost related to stores was RMB1.4 billion for the six
months ended June 30, 2024, as stable compared with RMB1.4 billion in the same period of 2023. |
| ● | Other costs. The Company’s other costs were RMB0.9 billion for the six months ended June 30,
2024, as stable compared with RMB0.9 billion in the same period of 2023. |
Gross Profit
Gross profit decreased by 9.0% to RMB10.6
billion for the six months ended June 30, 2024 from RMB11.7 billion in the same period of 2023. Gross margin was 26.8% for
the six months ended June 30, 2024, compared to 29.4% in the same period of 2023. The decrease in gross margin was mainly due to:
a) a lower proportion of net revenues contributed from existing home transaction services with a higher contribution margin level than
other main revenue streams, and b) a lower contribution margin for new home transaction services led by a higher commission-split as percentage
of net revenues from new home transaction services paid to connected agents and other channels, and the decreased net revenues from new
home transaction services with relatively flat fixed costs, partially offset by: c) a higher proportion of net revenues contributed from
home renovation and furnishing with a higher contribution margin level, and d) a higher contribution margin for home rental business primarily
due to improved operation efficiency and enhanced monetization capability.
Income (Loss) from Operations
Total operating expenses increased by 12.8%
to RMB8.6 billion for the six months ended June 30, 2024, from RMB7.6 billion in the same period of 2023.
| ● | General and administrative expenses were RMB4.1 billion for the six months ended June 30,
2024, compared to RMB3.7 billion in the same period of 2023, mainly due to the increase in personnel costs resulting from the expansion
of home renovation and furnishing and home rental services. |
| ● | Sales and marketing expenses increased by 19.1% to RMB3.5 billion for the six months ended June 30,
2024, from RMB2.9 billion in the same period of 2023, mainly due to the increase in sales and marketing expenses for home renovation and
furnishing services in line with the growth of net revenues from home renovation and furnishing for the six months ended June 30,
2024 compared to the same period of 2023. |
| ● | Research and development expenses were RMB1.0 billion for the six months ended June 30, 2024,
relatively flat compared with RMB0.9 billion in the same period of 2023. |
Income from operations was RMB2.0 billion
for the six months ended June 30, 2024, compared to RMB4.1 billion in the same period of 2023. Operating margin was 5.1% for
the six months ended June 30, 2024, compared to 10.2% in the same period of 2023, primarily due to a) a relatively lower gross profit
margin and b) the increased contribution of net revenues from home renovation and furnishing and home rental services, which was still
in the ramp-up period with a relatively lower operating margin than that of housing transaction services for the six months ended June 30,
2024 compared to the same period of 2023.
Adjusted income from operations6
was RMB3.8 billion for the six months ended June 30, 2024, compared to RMB6.0 billion in the same period of 2023. Adjusted operating
margin7 was 9.5% for the six months ended June 30, 2024, compared to 15.0% in the same period of 2023. Adjusted
EBITDA8 was RMB5.0 billion for the six months ended June 30, 2024, compared to RMB7.1 billion in the same period of
2023.
Net Income (Loss)
Net income was RMB2.3 billion for the six
months ended June 30, 2024, compared to RMB4.0 billion in the same period of 2023.
Adjusted net income was RMB4.1 billion
for the six months ended June 30, 2024, compared to RMB5.9 billion in the same period of 2023.
Liquidity and Capital Resources
During the Reporting Period and up to the date
of this announcement, we have financed our operating and investing activities through cash flows from operations and cash provided by
historical equity and debt financing activities. As of June 30, 2024, the combined balance of our cash, cash equivalents, restricted
cash and short-term investments amounted to RMB59.7 billion, compared to RMB60.1 billion as of December 31, 2023. Our cash and cash
equivalents primarily consist of cash on hand, demand deposits and highly liquid investments placed with banks with original maturities
of less than three months. Our restricted cash are primarily escrow payments collected from the property buyers on behalf of and payable
to the property sellers.
We believe that our current cash, cash equivalents
and restricted cash and expected cash provided by operating activities will be sufficient to meet our current and anticipated working
capital requirements and capital expenditures for an extended period of time. We may, however, need additional cash resources in the future
if we experience changes in business conditions or other developments. We may also need additional cash resources in the future if we
identify and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions.
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,
(ii) amortization of intangible assets resulting from acquisitions and business cooperation agreement, and (iii) impairment of goodwill,
intangible assets and other long-lived assets. 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, (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, (vii) impairment of goodwill, intangible assets and
other long-lived assets, and (viii) impairment of investments. Please refer to the section titled “Unaudited reconciliation of
GAAP and non-GAAP results” for details.
The following table sets out our cash flows for
the periods indicated:
| |
|
For the Six Months
Ended June 30, |
|
| |
|
2024 |
|
|
2023 |
|
| |
|
RMB |
|
|
RMB |
|
| |
|
(in thousands) |
|
| |
|
(unaudited) |
|
|
(unaudited) |
|
| Net cash provided by operating activities |
|
|
3,857,678 |
|
|
|
7,431,689 |
|
| Net cash provided by (used in) investing activities |
|
|
(6,843,593 |
) |
|
|
7,633,614 |
|
| Net cash used in financing activities |
|
|
(5,377,054 |
) |
|
|
(2,869,607 |
) |
| Effect of exchange rate change on cash, cash equivalents and restricted cash |
|
|
32,161 |
|
|
|
22,137 |
|
| |
|
|
|
|
|
|
|
|
| Net increase (decrease) in cash and cash equivalents and restricted cash |
|
|
(8,330,808 |
) |
|
|
12,217,833 |
|
| Cash, cash equivalents and restricted cash at the beginning of the period |
|
|
25,857,461 |
|
|
|
25,594,259 |
|
| |
|
|
|
|
|
|
|
|
| Cash, cash equivalents and restricted cash at the end of the period |
|
|
17,526,653 |
|
|
|
37,812,092 |
|
Indebtedness
The following table sets forth a breakdown of
our financial indebtedness as of the dates indicated:
| | |
As of | | |
As of | |
| | |
June 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| | |
(in thousands) |
| | |
(unaudited) | | |
| |
| Current: | |
| | | |
| | |
| Short-term borrowings | |
| 445,530 | | |
| 290,450 | |
| Lease liabilities | |
| 11,632,047 | | |
| 9,368,607 | |
| | |
| | | |
| | |
| Sub-total | |
| 12,077,577 | | |
| 9,659,057 | |
| | |
| | | |
| | |
| Non-current: | |
| | | |
| | |
| Lease liabilities | |
| 8,136,397 | | |
| 8,327,113 | |
| | |
| | | |
| | |
| Total | |
| 20,213,974 | | |
| 17,986,170 | |
Except as disclosed in this announcement, we did
not have any material mortgages, charges, debentures, loan capital, debt securities, loans, bank overdrafts or other similar indebtedness,
finance lease or hire purchase commitments, liabilities under acceptances (other than normal trade bills), acceptance credits, which are
either guaranteed, unguaranteed, secured or unsecured, or guarantees or other contingent liabilities as of June 30, 2024.
Significant Investment and Material Acquisition
and Disposal
The wealth management products that we subscribed
for during the Reporting Period, which constituted discloseable transactions of the Company under the Rules Governing the Listing
of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) as disclosed in the relevant announcement,
are set out below:
Sunshine Jinfengli Zhenxiang No. C034 (陽光金豐利臻享
C034 期), Sunshine Jinfengli Zhenxiang No. C036 (陽光金豐利臻享 C036 期) and
Sunshine Jinfengli Zhenxiang No. C040 (陽光金豐利臻享 C040 期) in the principal amount
of RMB1 billion, RMB0.45 billion and RMB1.2 billion with Everbright Wealth Management Co., Ltd. on October 18, 2023 (redeemed
on April 16, 2024), November 28, 2023 (redeemed on May 28, 2024), and February 20, 2024, respectively. For further
details, please refer to the announcement of the Company dated February 20, 2024.
Save as disclosed herein, we did not have any
significant investment or material acquisition or disposal of subsidiaries, associates and joint ventures for the six months ended June 30,
2024.
Pledge of Assets
As of June 30, 2024, no property, plant and
equipment was pledged.
Future Plans for Material Investments or Capital
Asset
We did not have detailed future plans for significant
investments or capital assets as of June 30, 2024.
Gearing Ratio
As of June 30, 2024, our gearing ratio (i.e.,
total liabilities divided by total assets, in percentage) was 42.3% (as of December 31, 2023: 40.0%).
Foreign Exchange Exposure
Substantially all of our revenues and expenses
are denominated in RMB. We do not believe that we currently have any significant direct foreign exchange risk. Although our exposure to
foreign exchange risks should be limited in general, the value of your investment will be affected by the exchange rate between U.S. dollar
and Renminbi.
Historically, the Renminbi has fluctuated against
the U.S. dollars at times significantly and unpredictably. The depreciation of the Renminbi against the U.S. dollars was approximately
2.4% for the six months ended June 30, 2024. It is difficult to predict how market forces or PRC or U.S. government policy may impact
the exchange rate between the Renminbi and the U.S. dollars in the future.
To the extent that we need to convert U.S. dollars
into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amounts
we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for
dividends on our Class A ordinary shares of the Company (the “Class A ordinary shares”) or ADSs or for other
business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amounts available
to us.
As of June 30, 2024, we had RMB-denominated
cash and cash equivalents, restricted cash and short-term investments of RMB55.6 billion, and U.S. dollar-denominated cash and cash equivalents,
restricted cash and short-term investments of US$0.6 billion. Assuming we had converted RMB55.6 billion into U.S. dollars at the exchange
rate of RMB7.2672 for US$1.00 as of June 30, 2024, our U.S. dollar cash balance would have been US$8.2 billion. If the RMB had depreciated
by 10% against the U.S. dollar, our U.S. dollar cash balance would have been US$7.5 billion instead.
Interest Rate Risk
We may invest the net proceeds that we receive
from our offshore offerings in interest-earning instruments. Fixed-rate securities may have their fair market value adversely impacted
due to a rise in interest rates, therefore our future investment income may fall short of expectations due to changes in interest rates,
or we may suffer losses in principal if we have to sell securities which have declined in market value due to changes in interest rates.
As of June 30, 2024, our exposure to such interest rate risk is mainly from RMB2.3 billion of wealth management products in short-term
investments. We have not been, and do not expect to be, exposed to material interest rate risks relating to our investment in short-term
instruments.
Capital Expenditures
Our capital expenditures were RMB462 million for
the six months ended June 30, 2024. Capital expenditures represent cash paid for purchase of property, plant and equipment and intangible
assets. We intend to fund our future capital expenditures with our existing cash balance and proceeds from our offshore offerings. We
will continue to make capital expenditures to meet the expected growth of our business.
Material Cash Requirements
Our material cash requirements as of June 30,
2024 and any subsequent interim period primarily include our capital expenditures and contractual obligations. We intend to fund our material
cash requirements with our cash balance. We will continue to make cash commitments, including capital expenditures, to meet the expected
growth of our business.
The following table sets forth our contractual obligations as of June 30, 2024:
| | |
Total | | |
Remainder
of
2024 | | |
2025 | | |
2026 | | |
2027 | | |
2028 | | |
Thereafter | |
| | |
(RMB in thousands) | |
| Operating lease and other commitments | |
| 1,119,600 | | |
| 191,755 | | |
| 248,771 | | |
| 257,415 | | |
| 176,338 | | |
| 92,961 | | |
| 152,360 | |
| Lease liability obligations | |
| 20,575,485 | | |
| 6,642,671 | | |
| 8,577,458 | | |
| 2,820,672 | | |
| 1,097,600 | | |
| 570,641 | | |
| 866,443 | |
As of June 30, 2024, our operating lease
and other commitments included RMB734.4 million in operating lease commitments, RMB301.7 million in capital commitments, RMB81.7 million
in investment commitment, and RMB1.8 million in obligation to purchase services.
Except for the commitments as disclosed above
and financial guarantees as discussed in section below, we did not have any other long-term obligations or material guarantees as of June 30,
2024.
Off-Balance Sheet Arrangements
We provide financial guarantees through our subsidiaries
for loans that we facilitate for certain financial partners or individual lenders. We are obligated to compensate the lenders for the
principal and interest payment in the event of the borrowers’ default. Therefore, we effectively provide guarantees to lenders against
the credit risk.
Other than the above, we have not entered into
any other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that
are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit,
liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing,
liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
Employees and Remuneration
As of June 30, 2024, we had a total of 122,599
employees. The following table sets forth the total number of employees categorized by function as of June 30, 2024:
| Function | |
Number
of
employees | |
| Agents and supporting staff | |
| 96,440 | |
| Platform operation | |
| 6,263 | |
| Research and development | |
| 1,992 | |
| Business development, sales and marketing | |
| 6,804 | |
| Administration and management | |
| 11,100 | |
| Total | |
| 122,599 | |
We believe that we offer our employees competitive
compensation packages and an environment that encourages self-development and, as a result, have generally been able to attract and retain
qualified personnel and maintain a stable core management team. In addition, we invest significant resources in the recruitment of employees
to support our fast growth of business operations. In particular, we have been successfully attracted a large number of college graduates
to join our offline operations in delivering real estate brokerage services to housing customers and experienced and talented research
and development professionals to join us in expanding and enhancing our platform technology capabilities.
As required by regulations in China, we participate
in various employee social security plans that are organized by municipal and provincial governments, including pension, unemployment
insurance, childbirth insurance, work-related injury insurance, medical insurance and housing provident fund. We are required under PRC
law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees,
up to a maximum amount specified by the local government from time to time. Bonuses are generally discretionary and based in part on employee
performance and in part on the overall performance of our business. We have granted, and plan to continue to grant, share-based incentive
awards to our employees in the future to incentivize their contributions to our growth and development.
We enter into standard labor contracts with our
employees. To date, we have not experienced any significant labor disputes. None of our employees is represented by a labor union.
OTHER INFORMATION
Purchase, Sale and Redemption of the Company’s
Listed Securities
As previously announced, the Company established
a share repurchase program in August 2022 and upsized and extended it in August 2023, under which the Company may purchase up
to US$2 billion of its Class A ordinary shares and/or ADSs until August 31, 2024 (the “Existing Share Repurchase Program”).
As at the date of this announcement, the Company has repurchased a total of 95,012,729 ADSs (representing 285,038,187 Class A ordinary
shares) on the New York Stock Exchange (“NYSE”) at an aggregate consideration of US$1,389,782,786.29 under the Existing
Share Repurchase Program. On August 12, 2024, the board of directors of the Company (the “Board”) approved modifications
to the Existing Share Repurchase Program, pursuant to which the repurchase authorization has been increased from US$2 billion to US$3
billion of its Class A ordinary shares and/or ADSs and extended until August 31, 2025 (the “Extended Share Repurchase
Program”, and together with the Existing Share Repurchase Program, the “Share Repurchase Program”). In the
annual general meeting (the “AGM”) held on June 14, 2024, the shareholders have approved to grant the Board a
general unconditional mandate to purchase the Company’s own shares (the “2024 Share Repurchase Mandate”) which
covers the repurchases to be made under the Extended Share Repurchase Program until the conclusion of the next AGM of the Company. After
the expiry of the 2024 Share Repurchase Mandate, the Company will seek for another general unconditional mandate for repurchase from the
shareholders of the Company at the next AGM to continue its share repurchase under the Extended Share Repurchase Program.
During the Reporting Period, the Company repurchased
a total of 26,995,560 ADSs (representing 80,986,680 Class A ordinary shares) on the NYSE at an aggregate consideration of US$380,000,306.80.
Details of the repurchase of Class A ordinary shares represented by ADSs on the NYSE during the Reporting Period are summarized as
follows:
| |
|
Number and
Method of |
|
|
Price Paid per Share |
|
| Month of Repurchase |
|
Repurchased
Shares |
|
|
Highest
Price Paid |
|
|
Lowest
Price Paid |
|
|
Aggregate
Consideration |
|
| |
|
|
|
|
(US$) |
|
|
(US$) |
|
|
(US$) |
|
| January 2024 |
|
|
21,969,609 on the NYSE |
|
|
|
5.33 |
|
|
|
4.30 |
|
|
|
104,535,169.47 |
|
| March 2024 |
|
|
25,029,735 on the NYSE |
|
|
|
4.80 |
|
|
|
4.22 |
|
|
|
115,449,467.38 |
|
| April 2024 |
|
|
24,685,980 on the NYSE |
|
|
|
5.25 |
|
|
|
4.17 |
|
|
|
110,759,992.05 |
|
| May 2024 |
|
|
4,385,676 on the NYSE |
|
|
|
5.66 |
|
|
|
4.97 |
|
|
|
24,256,103.19 |
|
| June 2024 |
|
|
4,915,680 on the NYSE |
|
|
|
5.20 |
|
|
|
4.86 |
|
|
|
24,999,574.71 |
|
| Total |
|
|
80,986,680 on the NYSE |
|
|
|
|
|
|
|
|
|
|
|
380,000,306.80 |
|
The Board considers that the Share Repurchase
Program reflects the confidence of the Board and the management team in the current and long-term business outlook and growth of the Company.
The Board considers that the Share Repurchase Program is in the best interest of the Company and its shareholders as a whole.
A total of 80,986,680 Class A ordinary shares
represented by ADSs repurchased during the Reporting Period has been cancelled, including the 9,301,356 Class A ordinary shares represented
by ADSs repurchased in May and June 2024 and cancelled in July 2024. Upon cancellation of the Class A ordinary shares
converted from the ADSs repurchased, the weighted voting right (“WVR,” as defined under the Listing Rules) beneficiaries
of the Company simultaneously reduced their WVR in the Company proportionately by way of converting their Class B ordinary shares
of the Company (the “Class B ordinary shares”) into Class A ordinary shares on a one-to-one ratio pursuant
to Rule 8A.21 of the Listing Rules, such that the proportion of shares carrying WVR of the Company shall not be increased, pursuant
to the requirements under Rules 8A.13 and 8A.15 of the Listing Rules. Accordingly, a total of 3,248,679 Class B ordinary shares
has been converted into Class A ordinary shares on a one-to-one ratio, including (i) 2,265,648 Class B ordinary shares
converted by Mr. Yongdong Peng, through a discretionary trust established by him (as the settlor), and (ii) 983,031 Class B
ordinary shares converted by Mr. Yigang Shan, through a discretionary trust established by him (as the settlor). As a result of the
cancellation of the 80,986,680 Class A ordinary shares represented by ADSs repurchased during the Reporting Period and the conversion
of 3,248,679 Class B ordinary shares into Class A ordinary shares on a one-to-one ratio, the number of Class A ordinary
shares in issue was reduced by 77,738,001.
Save as disclosed above, neither the Company nor
any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities during the Reporting Period and up to
the date of this announcement.
Compliance with the Corporate Governance Code
The Company’s corporate governance practices
are based on the principles and code provisions set forth in the Corporate Governance Code (the “CG Code”) contained
in Appendix C1 to the Listing Rules.
Pursuant to Code Provision C.2.1 of part 2 of
the CG Code, companies listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) are expected
to comply with, but may choose to deviate from the requirement that the responsibilities between the chairman and the chief executive
officer should be separate and should not be performed by the same individual. The Company does not have a separate chairman and chief
executive officer and Mr. Yongdong Peng currently performs these two roles.
All major decisions are made in consultation with
members of the Board, including the relevant Board committees and three independent non-executive directors. All of the directors of the
Company are encouraged to participate actively in all Board and committee meetings of which they are members, and the Chairman ensures
that all issues raised are properly briefed at the Board meetings. The Board believes that vesting the roles of both chairman and chief
executive officer in the same person has the benefit of ensuring consistent leadership within the Group and enables more effective and
efficient overall strategic planning for the Group. The Board considers that the balance of power and authority for the present arrangement
will not be impaired and this structure will enable the Company to make and implement decisions promptly and effectively.
Other than the above, during the Reporting Period
and up to the date of this announcement, the Company has complied with all applicable principles and code provisions of the CG Code.
Compliance with the Model Code for Securities
Transactions
The Company has adopted the Seconded Amended and
Restated Statement of Policies Governing Material Non-Public Information and the Prevention of Insider Trading (the “Company’s
Code”), with terms no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model
Code”) as set out in Appendix C3 to the Listing Rules, as its own securities dealing code to regulate all dealings by the directors
and relevant employees of the Company of securities in the Company and other matters covered by the Company’s Code.
Having made specific enquiries to all of the directors
of the Company, all directors of the Company confirmed that they have fully complied with all relevant requirements set out in the Model
Code and the Company’s Code during the Reporting Period and up to the date of this announcement.
Important Events after the Reporting Period
Save as disclosed in this announcement, no other
important events affecting the Group occurred since June 30, 2024 and up to the date of this announcement.
Review of Unaudited Interim Condensed Consolidated
Financial Information
The unaudited interim condensed consolidated financial
information of the Group for the six months ended June 30, 2024 have been reviewed by the auditor of the Company, PricewaterhouseCoopers,
in accordance with International Standard on Review Engagements 2410, “Review of interim financial information performed by the
independent auditor of the entity.” The unaudited interim condensed consolidated financial information of the Group for the six
months ended June 30, 2024 have also been reviewed by the audit committee of the Board.
Interim Dividend
The Board did not recommend the distribution of
an interim dividend for the six months ended June 30, 2024.
Publication of Interim Results and Interim
Report
This announcement is published on the website
of the Hong Kong Stock Exchange at http://www.hkexnews.hk and on the website of the Company at https://investors.ke.com.
The 2024 Interim Report containing all the information required by the Listing Rules will be made available on the websites of the
Company and the Hong Kong Stock Exchange in due course.
Appreciation
The Company would like to express its appreciation
to all the staff for their outstanding contribution towards the Company’s development. The Board wishes to sincerely thank the management
for their dedication and diligence, which are the key factors for the Company to continue its success in future. Also, the Company wishes
to extend its gratitude for the continued support from its shareholders, customers and business partners. The Company will continue to
deliver sustainable business development, so as to create more values for all its shareholders.
Use of 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 and adjusted EBITDA, each a non-GAAP financial measure, in evaluating its operating results and formulating its business plan.
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 formulating its business plan.
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, (ii) amortization of intangible assets resulting from acquisitions and business
cooperation agreement, and (iii) impairment of goodwill, intangible assets and other long-lived assets. 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 goodwill, intangible assets and other long-lived assets, (v) impairment of
investments, and (vi) 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
goodwill, intangible assets and other long-lived assets, (v) impairment of investments, (vi) tax effects of the above non-GAAP
adjustments, and (vii) 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, (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, (vii) impairment
of goodwill, intangible assets and other long-lived assets, and (viii) impairment of investments.
For more information on the non-GAAP financial
measures, please see the table captioned “Unaudited reconciliation of GAAP and Non-GAAP results” set forth at the end
of this announcement.
SAFE HARBOR
STATEMENT
This announcement 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 in this announcement,
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 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 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 announcement is as of the date of this announcement, and KE Holdings Inc. does not undertake any obligation to update
any forward-looking statement, except as required under applicable law.
| |
By order of the Board |
| |
KE Holdings Inc. |
| |
Yongdong Peng |
| |
Chairman and Chief Executive Officer |
Hong Kong, August 12, 2024
As at the date of this announcement, the board
of directors of the Company comprises Mr. Yongdong Peng, Mr. Yigang Shan, Mr. Wangang Xu and Mr. Tao Xu as the executive
directors, Mr. Jeffrey Zhaohui Li as the non-executive director, and Ms. Xiaohong Chen, Mr. Hansong Zhu and Mr. Jun
Wu as the independent non-executive directors.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
(All amounts in thousands, except for share and
per share data)
| | |
| | |
For the Six Months
Ended June 30, | |
| | |
Note | | |
2024 | | |
2023 | |
| | |
| | |
RMB | | |
RMB | |
| Net revenues: | |
| | | |
| | | |
| | |
| Existing home transaction services | |
| | | |
| 13,061,919 | | |
| 15,597,087 | |
| New home transaction services | |
| | | |
| 12,850,320 | | |
| 17,099,714 | |
| Home renovation and furnishing | |
| | | |
| 6,449,072 | | |
| 4,032,830 | |
| Home rental services | |
| | | |
| 5,812,743 | | |
| 2,100,888 | |
| Emerging and other services | |
| | | |
| 1,573,690 | | |
| 931,482 | |
| | |
| | | |
| | | |
| | |
| Total net revenues | |
| | | |
| 39,747,744 | | |
| 39,762,001 | |
| | |
| | | |
| | | |
| | |
| Cost of revenues: | |
| | | |
| | | |
| | |
| Commission-split | |
| | | |
| (8,857,846 | ) | |
| (11,363,560 | ) |
| Commission and compensation-internal | |
| | | |
| (8,065,289 | ) | |
| (9,360,775 | ) |
| Cost of home renovation and furnishing | |
| | | |
| (4,448,069 | ) | |
| (2,825,059 | ) |
| Cost of home rental services | |
| | | |
| (5,481,822 | ) | |
| (2,248,885 | ) |
| Cost related to stores | |
| | | |
| (1,365,977 | ) | |
| (1,415,651 | ) |
| Others | |
| | | |
| (889,605 | ) | |
| (855,083 | ) |
| | |
| | | |
| | | |
| | |
| Total cost of revenues | |
| | | |
| (29,108,608 | ) | |
| (28,069,013 | ) |
| | |
| | | |
| | | |
| | |
| Gross profit | |
| | | |
| 10,639,136 | | |
| 11,692,988 | |
| | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | |
| Sales and marketing expenses | |
| | | |
| (3,505,463 | ) | |
| (2,943,272 | ) |
| General and administrative expenses | |
| | | |
| (4,098,494 | ) | |
| (3,726,483 | ) |
| Research and development expenses | |
| | | |
| (971,809 | ) | |
| (931,529 | ) |
| Impairment of goodwill, intangible assets and other long-lived assets | |
| | | |
| (36,397 | ) | |
| (32,775 | ) |
| | |
| | | |
| | | |
| | |
| Total operating expenses | |
| | | |
| (8,612,163 | ) | |
| (7,634,059 | ) |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| |
|
|
|
|
For the Six Months
Ended June 30, |
|
| |
|
Note |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
RMB |
|
|
|
RMB |
|
| Income from operations |
|
|
|
|
|
|
2,026,973 |
|
|
|
4,058,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income, net |
|
|
|
|
|
|
666,253 |
|
|
|
602,226 |
|
| Share of results of equity investees |
|
|
|
|
|
|
(3,735 |
) |
|
|
14,475 |
|
| Fair value changes in investments, net |
|
|
|
|
|
|
78,288 |
|
|
|
73,006 |
|
| Impairment loss for equity investments accounted for using measurement alternative |
|
|
|
|
|
|
(8,049 |
) |
|
|
(9,313 |
) |
| Foreign currency exchange loss |
|
|
|
|
|
|
(73,025 |
) |
|
|
(15,833 |
) |
| Other income, net |
|
|
|
|
|
|
901,610 |
|
|
|
727,283 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income before income tax expense |
|
|
|
|
|
|
3,588,315 |
|
|
|
5,450,773 |
|
| Income tax expense |
|
|
5 |
|
|
|
(1,255,789 |
) |
|
|
(1,401,522 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
2,332,526 |
|
|
|
4,049,251 |
|
| Net loss (income) attributable to non-controlling interests shareholders |
|
|
|
|
|
|
(8,691 |
) |
|
|
6,326 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income attributable to KE Holdings Inc. |
|
|
|
|
|
|
2,323,835 |
|
|
|
4,055,577 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income attributable to KE Holdings Inc.’s ordinary shareholders |
|
|
|
|
|
|
2,323,835 |
|
|
|
4,055,577 |
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| |
|
|
|
|
For the Six Months Ended June 30, |
|
| |
|
Note |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
RMB |
|
|
RMB |
|
| Net income |
|
|
|
|
|
|
2,332,526 |
|
|
|
4,049,251 |
|
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
| Currency translation adjustments |
|
|
|
|
|
|
120,450 |
|
|
|
893,719 |
|
| Unrealized gains (losses) on available-for-sale investments, net of reclassification |
|
|
|
|
|
|
32,613 |
|
|
|
(1,024 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total other comprehensive income |
|
|
|
|
|
|
153,063 |
|
|
|
892,695 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income |
|
|
|
|
|
|
2,485,589 |
|
|
|
4,941,946 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive loss (income) attributable to non-controlling interests shareholders |
|
|
|
|
|
|
(8,691 |
) |
|
|
6,326 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive income attributable to KE Holdings Inc. |
|
|
|
|
|
|
2,476,898 |
|
|
|
4,948,272 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive income attributable to KE Holdings Inc.’s ordinary shareholders |
|
|
|
|
|
|
2,476,898 |
|
|
|
4,948,272 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of ordinary shares used in computing net income per share, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
| – Basic |
|
|
7 |
|
|
|
3,422,928,331 |
|
|
|
3,555,127,466 |
|
| – Diluted |
|
|
7 |
|
|
|
3,533,558,988 |
|
|
|
3,643,230,834 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per share attributable to ordinary shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
| – Basic |
|
|
7 |
|
|
|
0.68 |
|
|
|
1.14 |
|
| – Diluted |
|
|
7 |
|
|
|
0.66 |
|
|
|
1.11 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based compensation expenses included in: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenues |
|
|
|
|
|
|
249,834 |
|
|
|
226,566 |
|
| Sales and marketing expenses |
|
|
|
|
|
|
90,761 |
|
|
|
77,481 |
|
| General and administrative expenses |
|
|
|
|
|
|
1,090,910 |
|
|
|
1,188,897 |
|
| Research and development expenses |
|
|
|
|
|
|
92,926 |
|
|
|
90,038 |
|
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP
RESULTS
(All amounts in thousands, except for share and
per share data)
| | |
| | |
For the Six Months Ended June 30, | |
| | |
Note | | |
2024 | | |
2023 | |
| | |
| | |
RMB | | |
RMB | |
| Income from operations | |
| | | |
| 2,026,973 | | |
| 4,058,929 | |
| Share-based compensation expenses | |
| | | |
| 1,524,431 | | |
| 1,582,982 | |
| Amortization of intangible assets resulting from acquisitions and business cooperation agreement | |
| | | |
| 184,284 | | |
| 302,773 | |
| Impairment of goodwill, intangible assets and other long-lived assets | |
| | | |
| 36,397 | | |
| 32,775 | |
| | |
| | | |
| | | |
| | |
| Adjusted income from operations | |
| | | |
| 3,772,085 | | |
| 5,977,459 | |
| | |
| | | |
| | | |
| | |
| Net income | |
| | | |
| 2,332,526 | | |
| 4,049,251 | |
| Share-based compensation expenses | |
| | | |
| 1,524,431 | | |
| 1,582,982 | |
| Amortization of intangible assets resulting from acquisitions and business cooperation agreement | |
| | | |
| 184,284 | | |
| 302,773 | |
| Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration | |
| | | |
| 13,278 | | |
| (38,581 | ) |
| Impairment of goodwill, intangible assets and other
long-lived assets | |
| | | |
| 36,397 | | |
| 32,775 | |
| Impairment of investments | |
| | | |
| 8,049 | | |
| 9,313 | |
| Tax effects on non-GAAP adjustments | |
| | | |
| (13,410 | ) | |
| (13,122 | ) |
| | |
| | | |
| | | |
| | |
| Adjusted net income | |
| | | |
| 4,085,555 | | |
| 5,925,391 | |
| | |
| | | |
| | | |
| | |
| Net income | |
| | | |
| 2,332,526 | | |
| 4,049,251 | |
| Income tax expense | |
| | | |
| 1,255,789 | | |
| 1,401,522 | |
| Share-based compensation expenses | |
| | | |
| 1,524,431 | | |
| 1,582,982 | |
| Amortization of intangible assets | |
| | | |
| 194,518 | | |
| 309,914 | |
| Depreciation of property, plant and equipment | |
| | | |
| 338,859 | | |
| 384,815 | |
| Interest income, net | |
| | | |
| (666,253 | ) | |
| (602,226 | ) |
| Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration | |
| | | |
| 13,278 | | |
| (38,581 | ) |
| Impairment of goodwill, intangible assets and other
long-lived assets | |
| | | |
| 36,397 | | |
| 32,775 | |
| Impairment of investments | |
| | | |
| 8,049 | | |
| 9,313 | |
| | |
| | | |
| | | |
| | |
| Adjusted EBITDA | |
| | | |
| 5,037,594 | | |
| 7,129,765 | |
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP
RESULTS (CONTINUED)
(All amounts in thousands, except for share
and per share data)
| | |
| | |
For the Six Months | |
| | |
| | |
Ended June 30, | |
| | |
Note | | |
2024 | | |
2023 | |
| | |
| | |
RMB | | |
RMB | |
| Net income attributable to KE Holdings Inc.’s ordinary shareholders | |
| | | |
| 2,323,835 | | |
| 4,055,577 | |
| Share-based compensation expenses | |
| | | |
| 1,524,431 | | |
| 1,582,982 | |
| Amortization of intangible assets resulting from acquisitions and business cooperation agreement | |
| | | |
| 184,284 | | |
| 302,773 | |
| Changes in fair value from long term investments, loan receivables measured at fair value and contingent consideration | |
| | | |
| 13,278 | | |
| (38,581 | ) |
| Impairment of goodwill, intangible assets and other long-lived assets | |
| | | |
| 36,397 | | |
| 32,775 | |
| Impairment of investments | |
| | | |
| 8,049 | | |
| 9,313 | |
| Tax effects on non-GAAP adjustments | |
| | | |
| (13,410 | ) | |
| (13,122 | ) |
| Effects of non-GAAP adjustments on net income attributable to non-controlling interests shareholders | |
| | | |
| (14 | ) | |
| (14 | ) |
| | |
| | | |
| | | |
| | |
| Adjusted net income attributable to KE Holdings Inc.’s ordinary shareholders | |
| | | |
| 4,076,850 | | |
| 5,931,703 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
(All amounts in thousands, except for share
and per share data)
| | |
| | |
As of
June 30, | | |
As of
December 31, | |
| | |
Note | | |
2024 | | |
2023 | |
| | |
| | |
RMB | | |
RMB | |
| ASSETS | |
| | |
| | |
| |
| Current assets | |
| | |
| | |
| |
| Cash and cash equivalents | |
| | |
9,409,071 | | |
19,634,716 | |
| Restricted cash | |
| | |
8,117,582 | | |
6,222,745 | |
| Short-term investments | |
| | |
42,222,652 | | |
34,257,958 | |
| Short-term financing receivables, net of allowance for credit losses of RMB118,595 and RMB122,482 as of June 30, 2024 and December 31, 2023, respectively | |
| | |
1,460,169 | | |
1,347,759 | |
| Accounts receivable and contract assets, net of allowance for credit losses of RMB1,687,261 and RMB1,681,127 as of June 30, 2024 and December 31, 2023, respectively | |
4 | | |
3,904,153 | | |
3,176,169 | |
| Amounts due from and prepayments to related parties | |
| | |
416,759 | | |
419,270 | |
| Loan receivables from related parties | |
| | |
27,770 | | |
28,030 | |
| Prepayments, receivables and other assets | |
| | |
5,098,886 | | |
4,666,976 | |
| | |
| | |
| | |
| |
| Total current assets | |
| | |
70,657,042 | | |
69,753,623 | |
| | |
| | |
| | |
| |
| Non-current assets | |
| | |
| | |
| |
| Property, plant and equipment, net | |
| | |
2,065,608 | | |
1,965,098 | |
| Right-of-use assets | |
| | |
20,487,100 | | |
17,617,915 | |
| Long-term investments, net | |
| | |
22,132,865 | | |
23,570,988 | |
| Intangible assets, net | |
| | |
927,533 | | |
1,067,459 | |
| Goodwill | |
| | |
4,847,762 | | |
4,856,807 | |
| Long-term loan receivables from related parties | |
| | |
19,300 | | |
27,000 | |
| Other non-current assets | |
| | |
1,360,787 | | |
1,473,041 | |
| | |
| | |
| | |
| |
| Total non-current assets | |
| | |
51,840,955 | | |
50,578,308 | |
| | |
| | |
| | |
| |
| TOTAL ASSETS | |
| | |
122,497,997 | | |
120,331,931 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| |
|
|
|
|
As of
June 30, |
|
|
As of
December 31, |
|
| |
|
Note |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
RMB |
|
|
RMB |
|
| LIABILITIES |
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
6 |
|
|
6,684,706 |
|
|
6,328,516 |
|
| Amounts due to related parties |
|
|
|
|
398,473 |
|
|
430,350 |
|
| Employee compensation and welfare payable |
|
|
|
|
6,064,974 |
|
|
8,145,779 |
|
| Customer deposits payable |
|
|
|
|
5,794,761 |
|
|
3,900,564 |
|
| Income taxes payable |
|
|
|
|
747,112 |
|
|
698,568 |
|
| Short-term borrowings |
|
|
|
|
445,530 |
|
|
290,450 |
|
| Lease liabilities current portion |
|
|
|
|
11,632,047 |
|
|
9,368,607 |
|
| Contract liability and deferred revenue |
|
|
|
|
5,422,197 |
|
|
4,665,201 |
|
| Accrued expenses and other current liabilities |
|
|
|
|
6,186,560 |
|
|
5,695,948 |
|
| |
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
|
|
43,376,360 |
|
|
39,523,983 |
|
| |
|
|
|
|
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
|
|
|
|
|
| Deferred tax liabilities |
|
5 |
|
|
279,341 |
|
|
279,341 |
|
| Lease liabilities non-current portion |
|
|
|
|
8,136,397 |
|
|
8,327,113 |
|
| Other non-current liabilities |
|
|
|
|
2,791 |
|
|
389 |
|
| |
|
|
|
|
|
|
|
|
|
| Total non-current liabilities |
|
|
|
|
8,418,529 |
|
|
8,606,843 |
|
| |
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES |
|
|
|
|
51,794,889 |
|
|
48,130,826 |
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS (CONTINUED)
(All amounts in thousands, except for share
and per share data)
| | |
| | |
As of
June 30, | | |
As of
December 31, | |
| | |
Note | | |
2024 | | |
2023 | |
| | |
| | |
RMB | | |
RMB | |
| 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. 3,529,562,630 Class A ordinary shares issued and 3,395,696,348 Class A ordinary shares outstanding(1) as of June 30, 2024; 3,571,960,220 Class A ordinary shares issued and 3,443,860,844 Class A ordinary shares outstanding(1) as of December 31, 2023; and 147,500,681 and 151,354,549 Class B ordinary shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively) | |
| | |
467 | | |
475 | |
| Treasury shares | |
| | |
(350,595 | ) | |
(866,198 | ) |
| Additional paid-in capital | |
| | |
73,059,977 | | |
77,583,054 | |
| Statutory reserves | |
| | |
811,107 | | |
811,107 | |
| Accumulated other comprehensive income | |
| | |
397,365 | | |
244,302 | |
| Accumulated deficit | |
| | |
(3,349,081 | ) | |
(5,672,916 | ) |
| | |
| | |
| | |
| |
| Total KE Holdings Inc. shareholders’ equity | |
| | |
70,569,240 | | |
72,099,824 | |
| | |
| | |
| | |
| |
| Non-controlling interests | |
| | |
133,868 | | |
101,281 | |
| | |
| | |
| | |
| |
| TOTAL SHAREHOLDERS’ EQUITY | |
| | |
70,703,108 | | |
72,201,105 | |
| | |
| | |
| | |
| |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | |
122,497,997 | | |
120,331,931 | |
| (1) | Excluding the Class A ordinary shares registered in the name of the depositary bank for future issuance
of ADSs upon the exercise or vesting of awards granted under our share incentive plans and the Class A ordinary shares repurchased
but not cancelled in the form of ADSs. |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(All amounts in thousands, except
for share and per share data)
| | |
For the Six Months
Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| Cash flows from operating activities: | |
| | |
| |
| Net income | |
2,332,526 | | |
4,049,251 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |
| | |
| |
| Depreciation of property, plant and equipment | |
338,859 | | |
384,815 | |
| Amortization of intangible assets | |
194,518 | | |
309,914 | |
| Provision/(reversal) of allowance for expected credit losses | |
74,140 | | |
(7,363 | ) |
| Impairment of goodwill, intangible assets and other long-lived assets | |
36,397 | | |
32,775 | |
| Share of results of equity investees | |
3,735 | | |
(14,475 | ) |
| Dividend received from equity method investments | |
15,827 | | |
20,842 | |
| Fair value changes in investments | |
(78,288 | ) | |
(73,006 | ) |
| Impairment loss for equity investments accounted for using measurement alternative | |
8,049 | | |
9,313 | |
| Investment and interest income | |
(116,151 | ) | |
(469,460 | ) |
| Foreign currency exchange loss (gain) | |
(63,104 | ) | |
15,833 | |
| Loss (gain) on disposal of property, plant and equipment and intangible assets | |
(202 | ) | |
532 | |
| Share-based compensation expenses | |
1,524,431 | | |
1,582,982 | |
| Changes in assets and liabilities: | |
| | |
| |
| Accounts receivable and contract assets | |
(815,840 | ) | |
599,611 | |
| Amounts due from and prepayments to related parties | |
2,511 | | |
(20,002 | ) |
| Prepayments, receivables and other assets | |
(419,222 | ) | |
(741,165 | ) |
| Right-of-use assets | |
(2,714,611 | ) | |
(2,678,470 | ) |
| Other non-current assets | |
(42,320 | ) | |
4,404 | |
| Accounts payable | |
329,145 | | |
(23,655 | ) |
| Amounts due to related parties | |
(31,877 | ) | |
(13,709 | ) |
| Employee compensation and welfare payable | |
(2,080,805 | ) | |
(1,233,377 | ) |
| Customer deposits payable | |
1,894,197 | | |
443,771 | |
| Contract liability and deferred revenue | |
756,996 | | |
1,474,217 | |
| Lease liabilities | |
2,072,724 | | |
2,604,335 | |
| Accrued expenses and other current liabilities | |
585,097 | | |
1,019,760 | |
| Income taxes payable | |
48,544 | | |
205,121 | |
| Other liabilities | |
2,402 | | |
(51,105 | ) |
| | |
| | |
| |
| Net cash provided by operating activities | |
3,857,678 | | |
7,431,689 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| | |
For the Six Months
Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| Cash flows from investing activities: | |
| | | |
| | |
| Purchases of other short-term investments | |
| (12,308,702 | ) | |
| (10,541,760 | ) |
| Maturities of other short-term investments | |
| 22,944,980 | | |
| 20,925,887 | |
| Cash paid for business combinations, net of cash acquired | |
| (20,041 | ) | |
| (9,174 | ) |
| Proceeds from disposal of subsidiaries and long-lived assets | |
| 4,619 | | |
| 8,097 | |
| Purchases of property, plant and equipment and intangible assets | |
| (462,401 | ) | |
| (277,732 | ) |
| Financing receivables originated | |
| (22,602,440 | ) | |
| (12,452,312 | ) |
| Collections of financing receivables principal | |
| 22,493,916 | | |
| 12,489,166 | |
| Purchases of held-to-maturity debt investments | |
| (15,364,238 | ) | |
| (7,910,354 | ) |
| Purchases of other long-term investments | |
| (3,514,988 | ) | |
| (462,622 | ) |
| Maturities of held-to-maturity debt investments | |
| 1,850,110 | | |
| 5,047,564 | |
| Disposal of other long-term investments | |
| 127,632 | | |
| 803,947 | |
| Loans to related parties | |
| – | | |
| (47,000 | ) |
| Repayments of loans from related parties | |
| 7,960 | | |
| 59,907 | |
| | |
| | | |
| | |
| Net cash provided by (used in) investing activities | |
| (6,843,593 | ) | |
| 7,633,614 | |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Repurchase of ordinary shares | |
| (2,701,210 | ) | |
| (2,748,108 | ) |
| Proceeds from issuance of ordinary shares upon exercise of share option | |
| 1 | | |
| 1 | |
| Proceeds from short-term borrowings | |
| 606,033 | | |
| – | |
| Repayments of short-term borrowings | |
| (451,174 | ) | |
| (121,500 | ) |
| Dividends paid to equity holders of the Company | |
| (2,830,704 | ) | |
| – | |
| | |
| | | |
| | |
| Net cash used in financing activities | |
| (5,377,054 | ) | |
| (2,869,607 | ) |
| | |
| | | |
| | |
| Effect of exchange rate change on cash, cash equivalents and restricted cash | |
| 32,161 | | |
| 22,137 | |
| | |
| | | |
| | |
| Net increase (decrease) in cash and cash equivalents and restricted cash | |
| (8,330,808 | ) | |
| 12,217,833 | |
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| | |
For the Six Months
Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| Cash, cash equivalents and restricted cash at the beginning of the period | |
| | | |
| | |
| Including: | |
| | | |
| | |
| Cash and cash equivalents at the beginning of the period | |
| 19,634,716 | | |
| 19,413,202 | |
| Restricted cash at the beginning of the period | |
| 6,222,745 | | |
| 6,181,057 | |
| | |
| | | |
| | |
| Total | |
| 25,857,461 | | |
| 25,594,259 | |
| | |
| | | |
| | |
| Cash, cash equivalents and restricted cash at the end of the period | |
| | | |
| | |
| Including: | |
| | | |
| | |
| Cash and cash equivalents at the end of the period | |
| 9,409,071 | | |
| 31,750,204 | |
| Restricted cash at the end of the period | |
| 8,117,582 | | |
| 6,061,888 | |
| | |
| | | |
| | |
| Total | |
| 17,526,653 | | |
| 37,812,092 | |
| | |
| | | |
| | |
| Supplemental disclosures: | |
| | | |
| | |
| Cash paid for income taxes | |
| (1,113,362 | ) | |
| (1,177,588 | ) |
| Cash paid for interest | |
| (6,831 | ) | |
| (9,904 | ) |
| | |
| | | |
| | |
| Non-cash investing activities | |
| | | |
| | |
| Changes in accounts payable related to property, plant and equipment addition | |
| (27,026 | ) | |
| 9,225 | |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
(All amounts in thousands, except for share and
per share data)
KE Holdings Inc. (the “Company”) was incorporated in the Cayman Islands on July 6, 2018 under the Cayman Islands Companies Law as an exempted company with limited liability. The Company through its consolidated subsidiaries, variable interest entities (the “VIE”s) and the subsidiaries of the VIEs (collectively, the “Group”), is principally engaged in operating a leading integrated online and offline platform for housing transactions and services in the People’s Republic of China (the “PRC” or “China”).
In August and November 2020, the Company has completed its initial public offering and follow-on offering on the New York Stock Exchange.
In May 2022, the Company has completed its listing on the Hong Kong Stock Exchange by way of introduction.
The accompanying unaudited interim condensed consolidated financial information have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X. The unaudited interim condensed consolidated financial information have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of normal recurring adjustments, as necessary for the fair statement of the Company’s financial position as of June 30, 2024, and its results of operations and cash flows for the six months ended June 30, 2023 and 2024. The consolidated balance sheets as of December 31, 2023 have been derived from audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP. Results for interim periods are not necessarily indicative of those that may be expected for a full year or for any future period. The unaudited interim condensed consolidated financial information and related disclosures have been prepared with the presumption that users of these unaudited interim condensed consolidated financial information have read or have access to the audited consolidated financial statements and related footnotes for the year ended December 31, 2023. Accordingly, these unaudited interim condensed consolidated financial information should be read in conjunction with the Company’s audited consolidated financial statements and related footnotes for the year ended December 31, 2023. The accounting policies applied are consistent with those of the audited consolidated financial statements for the preceding fiscal year.
Change in segment
In view of the increased scale and business importance of the Group’s home rental services with reported revenue exceed the quantitative threshold of reportable segment, the Group separately report home rental services from the first quarter of 2024 onwards, which is also in accordance with the way report to the Group’s chief operating decision maker. Prior period results have been recast to conform to this updated presentation for the current year. See Note 3. “Segment Information” for additional information.
| (a) | Description of segments |
| |
|
The Group’s organizational structure
is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but are not limited
to, customer base, homogeneity of services and technology. The Group’s operating segments are based on this organizational structure
and information reviewed by the Group’s CODM to evaluate the operating segment results. |
| |
|
Due to the increased scale and business
importance of the Group’s home rental services, the Group separately report home rental services from the first quarter of 2024
onwards, which is also in accordance with the way report to the Group’s chief operating decision maker. Prior period results have
been recast to conform to this updated presentation for the current period. |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| |
|
Subsequent to the change, the Group
operates its businesses in five segments: existing home transaction services, new home transaction services, home renovation and furnishing,
home rental services, and emerging and other services. The following summary describes the operations in each of the Group’s reportable
segment: |
| (1) | Existing home transaction services: The existing home transaction segment provides services in existing
home market include i) agency services to sales or leases of existing homes, either through acting as the principal agent or a participating
agent in collaboration with the principal agents; ii) platform and franchise services to brokerage firms on Beike platform who
provide agency services in existing home market; and iii) Other transaction services, such as transaction closing service through the
Group’s transaction center. |
| (2) | New home transaction services: The new home transaction business segment provides new home transaction
services in new home market. New home transaction services refer to marketing services provided to real estate developers to facilitate
sales of new properties developed by the real estate developers to property buyers. The Group signs the new home transaction services
contracts with the sales companies of the developers and then mobilizes all agents registered with the platform to fulfil such contracts. |
| (3) | Home renovation and furnishing: The home renovation and furnishing business segment provides a one-stop
solution to give housing customers access to a comprehensive range of home renovation and furnishing, ranging from interior design, renovation,
re-modeling, furnishing, supplies, to after-sales maintenance and repair. |
| (4) | Home rental services: The home rental business provides rental property management and operation services
with respect to dispersed and centralized properties, and other rental-related services including monetization of platform traffic and
online rental management services. |
| (5) | Emerging and other services: Emerging and other services include financial service business and other
newly developed businesses. |
| |
|
The Group defines contribution for
each service line as the revenue less the direct compensation to our internal agents and sales professionals, split commission to connected
agents and other sales channels for such services, property leasing costs related to rental property management service and direct costs
for home renovation and furnishing. We define contribution margin as a percentage of contribution bearing to revenue. |
| |
|
Commission and compensation costs in
existing home transaction services business are mainly to those who are the Group’s employees or contractors. Commissions and compensation
costs in new home transaction services business are mainly to brokerage firms who sign channel sale service agreements with the Group.
Commission and compensation costs in home renovation and furnishing business are mainly to renovation workers who are the Group’s
employees or contractors. Material costs in home renovation and furnishing market are mainly to suppliers according to corresponding contracts.
Property leasing costs related to rental property management service are mainly to property owners according to corresponding lease contracts. |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| |
|
The following tables present summary
information by segment, with prior period segment information retrospectively recast to conform to current period presentation: |
| |
|
For the
Six Months Ended June 30, |
|
| |
|
2024 |
|
|
2023 |
|
| |
|
RMB |
|
|
RMB |
|
| Net revenues: |
|
|
|
|
|
|
|
|
| Existing home transaction services |
|
|
13,061,919 |
|
|
|
15,597,087 |
|
| New home transaction services |
|
|
12,850,320 |
|
|
|
17,099,714 |
|
| Home renovation and furnishing |
|
|
6,449,072 |
|
|
|
4,032,830 |
|
| Home rental services |
|
|
5,812,743 |
|
|
|
2,100,888 |
|
| Emerging and other services |
|
|
1,573,690 |
|
|
|
931,482 |
|
| |
|
|
|
|
|
|
|
|
| Total |
|
|
39,747,744 |
|
|
|
39,762,001 |
|
| |
|
|
|
|
|
|
|
|
| Material costs, property leasing costs, commission and
compensation costs: |
|
|
|
|
|
|
|
|
| Existing home transaction services |
|
|
(7,032,712 |
) |
|
|
(8,169,959 |
) |
| New home transaction services |
|
|
(9,768,943 |
) |
|
|
(12,462,059 |
) |
| Home renovation and furnishing |
|
|
(4,448,069 |
) |
|
|
(2,825,059 |
) |
| Home rental services |
|
|
(5,481,822 |
) |
|
|
(2,248,885 |
) |
| Emerging and other services |
|
|
(121,480 |
) |
|
|
(92,317 |
) |
| |
|
|
|
|
|
|
|
|
| Total |
|
|
(26,853,026 |
) |
|
|
(25,798,279 |
) |
| |
|
|
|
|
|
|
|
|
| (Deficit)/Contribution: |
|
|
|
|
|
|
|
|
| Existing home transaction services |
|
|
6,029,207 |
|
|
|
7,427,128 |
|
| New home transaction services |
|
|
3,081,377 |
|
|
|
4,637,655 |
|
| Home renovation and furnishing |
|
|
2,001,003 |
|
|
|
1,207,771 |
|
| Home rental services |
|
|
330,921 |
|
|
|
(147,997 |
) |
| Emerging and other services |
|
|
1,452,210 |
|
|
|
839,165 |
|
| |
|
|
|
|
|
|
|
|
| Total |
|
|
12,894,718 |
|
|
|
13,963,722 |
|
| |
|
As substantially all of the Group’s
long-lived assets are located in the PRC and substantially all of the Group’s revenue of reportable segments are derived from China
based on the geographical locations where services and products are provided to customers, no geographical information is presented. |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| 4. | ACCOUNTS RECEIVABLE AND CONTRACT ASSETS, NET |
| |
Accounts receivable, net consists of
the following: |
| | |
As of
June 30,
2024 | | |
As of
December 31,
2023 | |
| | |
RMB | | |
RMB | |
| New home transaction services | |
| 4,207,053 | | |
| 3,750,996 | |
| Existing home transaction services | |
| 566,424 | | |
| 483,901 | |
| Home renovation and furnishing | |
| 133,186 | | |
| 99,935 | |
| Home rental services | |
| 48,182 | | |
| 89,806 | |
| Emerging and other services | |
| 343,046 | | |
| 158,997 | |
| | |
| | | |
| | |
| Accounts receivable | |
| 5,297,891 | | |
| 4,583,635 | |
| Allowance for credit losses | |
| (1,543,534 | ) | |
| (1,566,129 | ) |
| | |
| | | |
| | |
| Accounts receivable, net | |
| 3,754,357 | | |
| 3,017,506 | |
| |
The contract assets are mainly related
to the Group’s home renovation business. The Group’s timing of revenue recognition may differ from the timing of invoicing
to customers. The Group’s contract assets represent the amount of contract revenue recognized but not yet billed pursuant to contract
terms. |
| |
Contract assets, net consists of the
following: |
| | |
As of
June 30,
2024 | | |
As of
December 31,
2023 | |
| | |
RMB | | |
RMB | |
| Contract assets – gross | |
| 293,523 | | |
| 273,661 | |
| Allowance for credit losses | |
| (143,727 | ) | |
| (114,998 | ) |
| | |
| | | |
| | |
| Contract assets, net | |
| 149,796 | | |
| 158,663 | |
| |
The movements in the allowance for credit
losses of accounts receivable were as follows: |
| | |
For the Six Months Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| Balance at the beginning of the period | |
| (1,566,129 | ) | |
| (1,951,419 | ) |
| Reversal/(Additions) | |
| (59,159 | ) | |
| 32,991 | |
| Write-offs | |
| 81,754 | | |
| 204,475 | |
| | |
| | | |
| | |
| Balance at the end of the period | |
| (1,543,534 | ) | |
| (1,713,953 | ) |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
The Group usually allows a credit period
within 90 days to its customers. Ageing analysis of accounts receivable based on the date of delivery of service to customers is as follows:
| | |
As of
June 30, | | |
As of
December 31, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| – Up to 3 months | |
| 2,862,643 | | |
| 2,056,388 | |
| – 3 months to 1 year | |
| 600,941 | | |
| 617,635 | |
| – over 1 year | |
| 1,834,307 | | |
| 1,909,612 | |
| | |
| | | |
| | |
| Accounts receivable | |
| 5,297,891 | | |
| 4,583,635 | |
| Less: allowance for credit losses | |
| (1,543,534 | ) | |
| (1,566,129 | ) |
| | |
| | | |
| | |
| Accounts receivable, net | |
| 3,754,357 | | |
| 3,017,506 | |
For interim financial reporting, the
Group estimates the annual tax rate based on projected taxable income for the full year and records a quarterly income tax provision in
accordance with the guidance on accounting for income taxes in an interim period.
As the year progresses, the Group refines
the estimates of the year’s taxable income as new information becomes available. This continual estimation process often results
in a change to the expected effective tax rate for the year. When this occurs, the Group adjusts the income tax provision during the quarter
in which the change in estimate occurs so that the year-to-date provision reflects the expected annual tax rate.
The components of income (loss) before
tax for the six months ended June 30, 2024 and 2023, are as follows:
| | |
For the Six Months Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| Income (loss) before income tax expense | |
| | | |
| | |
| Income from China operations | |
| 4,969,234 | | |
| 6,935,014 | |
| Loss from non-China operations | |
| (1,380,919 | ) | |
| (1,484,241 | ) |
| | |
| | | |
| | |
| Total income before income tax expense | |
| 3,588,315 | | |
| 5,450,773 | |
The following table summarizes the Group’s
income tax expenses and effective tax rates for the six months ended June 30, 2024 and 2023:
| | |
For the Six Months Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| | |
(in thousands, except for tax rate) | |
| Income before income tax expense | |
| 3,588,315 | | |
| 5,450,773 | |
| Income tax expense | |
| 1,255,789 | | |
| 1,401,522 | |
| Effective tax rate | |
| 35.0 | % | |
| 25.7 | % |
During the six months ended June 30,
2024, the income tax expense was primarily driven by current tax on earnings of certain major China operations.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share
and per share data)
| | |
As of
June 30, | | |
As of
December 31, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| Payable related to new home transaction business | |
| 4,367,295 | | |
| 4,081,051 | |
| Payable for home renovation materials and construction costs | |
| 1,517,637 | | |
| 1,375,333 | |
| Payable for advertising fees | |
| 234,941 | | |
| 305,108 | |
| Payable for internet service fees | |
| 229,330 | | |
| 166,085 | |
| Payable for leasehold improvements | |
| 119,950 | | |
| 92,924 | |
| Others | |
| 215,553 | | |
| 308,015 | |
| | |
| | | |
| | |
| Total | |
| 6,684,706 | | |
| 6,328,516 | |
An ageing analysis of the trade payable
as at June 30, 2024 and December 31, 2023, based on the invoice date, is as follow:
| | |
As of
June 30, | | |
As of
December 31, | |
| | |
2024 | | |
2023 | |
| | |
RMB | | |
RMB | |
| – Up to 3 months | |
| 6,087,605 | | |
| 5,980,363 | |
| – 3 months to 1 year | |
| 461,952 | | |
| 221,018 | |
| – Over 1 year | |
| 135,149 | | |
| 127,135 | |
| | |
| | | |
| | |
| Total | |
| 6,684,706 | | |
| 6,328,516 | |
Basic net income per share is the amount
of net income attributable to each share of ordinary shares outstanding during the reporting period. Diluted net income per share is the
amount of net income attributable to each share of ordinary shares outstanding during the reporting period adjusted to include the effect
of potentially dilutive ordinary shares. Stock options to purchase ordinary shares, restricted shares and restricted share units, unless
they were anti-diluted, were included in the calculation of diluted net income per share of the Group.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
The following table sets forth the computation
of basic and diluted net income per share for the periods indicated:
| | |
For the Six Months Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
(RMB in thousands, except for
share and per share data) | |
| Numerator: | |
| | | |
| | |
| Net income attributable to KE Holdings Inc. | |
| 2,323,835 | | |
| 4,055,577 | |
| | |
| | | |
| | |
| Net income attributable to KE Holdings Inc.’s ordinary shareholders | |
| 2,323,835 | | |
| 4,055,577 | |
| | |
For the Six Months Ended June 30, | |
| | |
2024 | | |
2023 | |
| | |
(RMB in thousands, except for
share and per share data) | |
| Denominator: | |
| | | |
| | |
| Denominator for basic net income per share-weighted average ordinary shares outstanding | |
| 3,422,928,331 | | |
| 3,555,127,466 | |
| Adjustments for dilutive share options | |
| 9,049,079 | | |
| 9,847,120 | |
| Adjustments for dilutive restricted shares | |
| 98,366,372 | | |
| 70,813,423 | |
| Adjustments for dilutive restricted share units | |
| 3,215,206 | | |
| 7,442,825 | |
| Denominator for diluted net income per share-weighted average ordinary shares outstanding | |
| 3,533,558,988 | | |
| 3,643,230,834 | |
| Net income per share attributable to ordinary shareholders: | |
| | | |
| | |
| – Basic | |
| 0.68 | | |
| 1.14 | |
| – Diluted | |
| 0.66 | | |
| 1.11 | |
On March 14, 2024, the Board declared
a final cash dividend (the “Final Cash Dividend”) of US$0.117 per ordinary share, or US$0.351 per ADS, payable in U.S.
dollars. The aggregate amount of the Final Cash Dividend paid was approximately US$0.4 billion.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| 9. | RECONCILIATION BETWEEN U.S. GAAP AND IFRS ACCOUNTING STANDARDS |
The unaudited interim condensed consolidated
financial information are prepared in accordance with U.S. GAAP, which differ in certain respects from IFRS Accounting Standards (“IFRS”).
The effects of material differences between the unaudited consolidated financial information of the Group prepared under U.S. GAAP and
IFRS are as follows:
Unaudited interim condensed consolidated
statements of comprehensive income data
| | |
For
the Six Months Ended June 30, 2024 | |
| | |
Amounts
as
reported
under
U.S. GAAP | | |
IFRS
adjustments | | |
Amounts
as
reported
under IFRS | |
| | |
| | | |
Preferred
Shares
(note (i)) | | |
Provision
for credit
losses
(note (ii)) | | |
Lease
accounting
(note (iii)) | | |
Share-based
compensation
(note (iv)) | | |
Issuance
costs in
relation to
the IPO
(note (v)) | | |
Investments
measured
at fair value
(note (vi)) | | |
| | |
| | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenues | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Home rental services | |
| 5,812,743 | | |
| – | | |
| – | | |
| (2,162,443 | ) | |
| – | | |
| – | | |
| – | | |
| 3,650,300 | |
| Cost | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| (29,108,608 | ) | |
| – | | |
| 1,185 | | |
| 1,916,559 | | |
| 4,786 | | |
| – | | |
| – | | |
| (27,186,078 | ) |
| Sales and marketing expenses | |
| (3,505,463 | ) | |
| – | | |
| – | | |
| 20,129 | | |
| (2,561 | ) | |
| – | | |
| – | | |
| (3,487,895 | ) |
| General and administrative expenses | |
| (4,098,494 | ) | |
| – | | |
| – | | |
| 12,775 | | |
| 198,479 | | |
| – | | |
| – | | |
| (3,887,240 | ) |
| Research and development expenses | |
| (971,809 | ) | |
| – | | |
| – | | |
| – | | |
| 8,650 | | |
| – | | |
| – | | |
| (963,159 | ) |
| Interest income, net | |
| 666,253 | | |
| – | | |
| – | | |
| (45,928 | ) | |
| – | | |
| – | | |
| – | | |
| 620,325 | |
| Fair value changes in investments,
net | |
| 78,288 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (14,826 | ) | |
| 63,462 | |
| Impairment loss for equity investments accounted for using
measurement alternative | |
| (8,049 | ) | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 8,049 | | |
| – | |
| Other income, net | |
| 901,610 | | |
| – | | |
| – | | |
| 820,238 | | |
| – | | |
| – | | |
| (6,478 | ) | |
| 1,715,370 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Income before income tax expense | |
| 3,588,315 | | |
| – | | |
| 1,185 | | |
| 561,330 | | |
| 209,354 | | |
| – | | |
| (13,255 | ) | |
| 4,346,929 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Income tax expense | |
| (1,255,789 | ) | |
| – | | |
| (209 | ) | |
| (28,850 | ) | |
| – | | |
| – | | |
| – | | |
| (1,284,848 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income | |
| 2,332,526 | | |
| – | | |
| 976 | | |
| 532,480 | | |
| 209,354 | | |
| – | | |
| (13,255 | ) | |
| 3,062,081 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income attributable to KE Holdings
Inc. | |
| 2,323,835 | | |
| – | | |
| 976 | | |
| 532,480 | | |
| 209,354 | | |
| – | | |
| (13,255 | ) | |
| 3,053,390 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income attributable to KE Holdings
Inc.’s ordinary shareholders | |
| 2,323,835 | | |
| – | | |
| 976 | | |
| 532,480 | | |
| 209,354 | | |
| – | | |
| (13,255 | ) | |
| 3,053,390 | |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| | |
For the Six Months Ended June 30, 2023 | |
| | |
Amounts as
reported
under U.S.
GAAP | | |
IFRS adjustments | | |
Amounts as
reported
under IFRS | |
| | |
| | | |
Preferred
Shares
(note (i)) | | |
Provision
for credit
losses
(note (ii)) | | |
Lease
accounting
(note (iii)) | | |
Share-based
compensation
(note (iv)) | | |
Issuance
costs in
relation to
the IPO
(note (v)) | | |
Investments
measured at
fair value
(note (vi)) | | |
| | |
| | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | | |
| RMB | |
| Revenues | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Home rental services | |
| 2,100,888 | | |
| – | | |
| – | | |
| (483,688 | ) | |
| – | | |
| – | | |
| – | | |
| 1,617,200 | |
| Cost | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| (28,069,013 | ) | |
| – | | |
| (1,021 | ) | |
| 427,318 | | |
| (55,395 | ) | |
| – | | |
| – | | |
| (27,698,111 | ) |
| Sales and marketing expenses | |
| (2,943,272 | ) | |
| – | | |
| – | | |
| 16,538 | | |
| (19,364 | ) | |
| – | | |
| – | | |
| (2,946,098 | ) |
| General and administrative expenses | |
| (3,726,483 | ) | |
| – | | |
| – | | |
| 14,741 | | |
| (231,520 | ) | |
| – | | |
| – | | |
| (3,943,262 | ) |
| Research and development expenses | |
| (931,529 | ) | |
| – | | |
| – | | |
| – | | |
| 15,734 | | |
| – | | |
| – | | |
| (915,795 | ) |
| Interest income, net | |
| 602,226 | | |
| – | | |
| – | | |
| (101,757 | ) | |
| – | | |
| – | | |
| – | | |
| 500,469 | |
| Fair value changes in investments, net | |
| 73,006 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (1,201 | ) | |
| 71,805 | |
| Impairment loss for equity investments accounted for using measurement alternative | |
| (9,313 | ) | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 9,265 | | |
| (48 | ) |
| Other income, net | |
| 727,283 | | |
| – | | |
| – | | |
| 204,270 | | |
| – | | |
| – | | |
| (2,270 | ) | |
| 929,283 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Income before income tax expense | |
| 5,450,773 | | |
| – | | |
| (1,021 | ) | |
| 77,422 | | |
| (290,545 | ) | |
| – | | |
| 5,794 | | |
| 5,242,423 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Income tax expense | |
| (1,401,522 | ) | |
| – | | |
| – | | |
| (211 | ) | |
| – | | |
| – | | |
| – | | |
| (1,401,733 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income | |
| 4,049,251 | | |
| – | | |
| (1,021 | ) | |
| 77,211 | | |
| (290,545 | ) | |
| – | | |
| 5,794 | | |
| 3,840,690 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income attributable to KE Holdings Inc. | |
| 4,055,577 | | |
| – | | |
| (1,021 | ) | |
| 77,211 | | |
| (290,545 | ) | |
| – | | |
| 5,794 | | |
| 3,847,016 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income attributable to KE Holdings Inc.’s ordinary shareholders | |
| 4,055,577 | | |
| – | | |
| (1,021 | ) | |
| 77,211 | | |
| (290,545 | ) | |
| – | | |
| 5,794 | | |
| 3,847,016 | |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
Unaudited interim condensed consolidated
balance sheets data
| | |
As
of June 30, 2024 | |
| | |
Amounts
as
reported
under U.S.
GAAP | | |
IFRS
adjustments | | |
Amounts
as
reported
under IFRS | |
| | |
| | |
Preferred
Shares
(note
(i)) | | |
Provision
for
credit losses
(note (ii)) | | |
Lease
accounting (note
(iii)) | | |
Share-based compensation (note
(iv)) | | |
Issuance costs
in relation
to the
IPO (note
(v)) | | |
Investments
measured
at fair
value
(note (vi)) | | |
| |
| | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | |
| Short-term
financing receivables, net of allowance for credit losses | |
| 1,460,169 | | |
| – | | |
| 353 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 1,460,522 | |
| Lease receivables | |
| – | | |
| – | | |
| – | | |
| 5,497,046 | | |
| – | | |
| – | | |
| – | | |
| 5,497,046 | |
| Right-of-use assets | |
| 20,487,100 | | |
| – | | |
| – | | |
| (5,023,716 | ) | |
| – | | |
| – | | |
| – | | |
| 15,463,384 | |
| Long-term investments, net | |
| 22,132,865 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 7,848 | | |
| 22,140,713 | |
| Other non-current
assets | |
| 1,360,787 | | |
| – | | |
| (6,610 | ) | |
| 40,169 | | |
| – | | |
| – | | |
| – | | |
| 1,394,346 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total
assets | |
| 122,497,997 | | |
| – | | |
| (6,257 | ) | |
| 513,499 | | |
| – | | |
| – | | |
| 7,848 | | |
| 123,013,087 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accrued
expenses and other current liabilities | |
| 6,186,560 | | |
| – | | |
| (26,441 | ) | |
| (17,057 | ) | |
| – | | |
| – | | |
| – | | |
| 6,143,062 | |
| Other Non-current
liabilities | |
| 2,791 | | |
| – | | |
| – | | |
| 40,942 | | |
| – | | |
| – | | |
| – | | |
| 43,733 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total
liabilities | |
| 51,794,889 | | |
| – | | |
| (26,441 | ) | |
| 23,885 | | |
| – | | |
| – | | |
| – | | |
| 51,792,333 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Additional paid-in capital | |
| 73,059,977 | | |
| 29,811,702 | | |
| – | | |
| – | | |
| 1,143,877 | | |
| 45,338 | | |
| – | | |
| 104,060,894 | |
| Accumulated
other comprehensive income | |
| 397,365 | | |
| 241,343 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 638,708 | |
| Accumulated
deficit | |
| (3,349,081 | ) | |
| (30,053,045 | ) | |
| 20,184 | | |
| 489,614 | | |
| (1,143,877 | ) | |
| (45,338 | ) | |
| 7,848 | | |
| (34,073,695 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total
shareholders’ equity | |
| 70,703,108 | | |
| – | | |
| 20,184 | | |
| 489,614 | | |
| – | | |
| – | | |
| 7,848 | | |
| 71,220,754 | |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| | |
As
of December 31, 2023 | |
| | |
Amounts
as
reported under
U.S. GAAP | | |
IFRS
adjustments | | |
Amounts
as
reported
under IFRS | |
| | |
| | |
Preferred Shares (note
(i)) | | |
Provision
for credit
losses (note
(ii)) | | |
Lease accounting (note
(iii)) | | |
Share-based compensation (note
(iv)) | | |
Issuance costs
in relation
to the IPO (note
(v)) | | |
Investments
measured
at fair value
(note (vi)) | | |
| |
| | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | | |
RMB | |
| Short-term financing
receivables, net of allowance for credit losses | |
| 1,347,759 | | |
| – | | |
| 2 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 1,347,761 | |
| Lease receivables | |
| – | | |
| – | | |
| – | | |
| 2,775,570 | | |
| – | | |
| – | | |
| – | | |
| 2,775,570 | |
| Right-of-use assets | |
| 17,617,915 | | |
| – | | |
| – | | |
| (2,928,681 | ) | |
| – | | |
| – | | |
| – | | |
| 14,689,234 | |
| Long-term investments, net | |
| 23,570,988 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 21,103 | | |
| 23,592,091 | |
| Other non-current
assets | |
| 1,473,041 | | |
| – | | |
| (6,402 | ) | |
| 28,073 | | |
| – | | |
| – | | |
| – | | |
| 1,494,712 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total
assets | |
| 120,331,931 | | |
| – | | |
| (6,400 | ) | |
| (125,038 | ) | |
| – | | |
| – | | |
| 21,103 | | |
| 120,221,596 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Accrued expenses
and other current liabilities | |
| 5,695,948 | | |
| – | | |
| (25,608 | ) | |
| (82,172 | ) | |
| – | | |
| – | | |
| – | | |
| 5,588,168 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total
liabilities | |
| 48,130,826 | | |
| – | | |
| (25,608 | ) | |
| (82,172 | ) | |
| – | | |
| – | | |
| – | | |
| 48,023,046 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Additional paid-in capital | |
| 77,583,054 | | |
| 29,811,702 | | |
| – | | |
| – | | |
| 1,353,231 | | |
| 45,338 | | |
| – | | |
| 108,793,325 | |
| Accumulated other comprehensive
income | |
| 244,302 | | |
| 241,343 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 485,645 | |
| Accumulated
deficit | |
| (5,672,916 | ) | |
| (30,053,045 | ) | |
| 19,208 | | |
| (42,866 | ) | |
| (1,353,231 | ) | |
| (45,338 | ) | |
| 21,103 | | |
| (37,127,085 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total
shareholders’ equity | |
| 72,201,105 | | |
| – | | |
| 19,208 | | |
| (42,866 | ) | |
| – | | |
| – | | |
| 21,103 | | |
| 72,198,550 | |
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
Notes:
Under U.S. GAAP, the Company classified
the Preferred Shares as mezzanine equity in the consolidated balance sheets because they were redeemable at the holders’ option
upon the occurrence of certain deemed liquidation events and certain events outside of the Company’s control. The Preferred Shares
are recorded initially at fair value, net of issuance costs. The Company recognized accretion to the respective redemption value of the
Preferred Shares over the period starting from issuance date to the earliest redemption date.
Under IFRS, certain redemption triggering
events of the Preferred Shares are outside of the Company’s control. In addition, the holders of the Preferred Shares are entitled
to convert the Preferred Shares into a variable number of the Company’s ordinary shares upon occurrence of certain events. Accordingly,
the Preferred Shares are regarded as a hybrid instruments consisting of a host debt instrument and a conversion option as a derivative.
The Company designated the entire Preferred Shares as financial liabilities at fair value through profit or loss such that the Preferred
Shares are initially recognized at fair value, while changes in the fair value due to own credit risk of Preferred Shares shall be presented
in other comprehensive income separately.
| (ii) | Provision for credit losses |
1) Under U.S. GAAP, the Group has adopted
ASC Topic 326 starting from January 1, 2020. For instruments in the scope of the general CECL model, lifetime expected credit losses
are recorded upon initial recognition of the instrument as an allowance for loan losses. Under IFRS, the Group has adopted IFRS 9 starting
from January 1, 2018. Upon initial recognition, only the portion of lifetime expected credit loss (“ECL”) that results
from default events that are possible within 12 months after the reporting date is recorded (“stage 1”). Lifetime expected
credit losses are subsequently recorded only if there is a significant increase in the credit risk of the asset (“stage 2”).
Once there is objective evidence of impairment (“stage 3”), lifetime ECL continues to be recognized, but interest revenue
is calculated on the net carrying amount (that is, amortized cost net of the credit allowance). Accordingly, the reconciliation includes
a difference in the credit losses for financing receivables between IFRS 9 and ASC 326.
2) Under U.S. GAAP, for guarantees
that are within the scope of ASC 326-20, the expected credit losses are measured and accounted for without regard to the initial fair
value of the guarantee. Therefore, as described in ASC 460, the Group should record both a guarantee obligation and an allowance for credit
losses (calculated using the CECL impairment model) for financial guarantees in the scope of ASC 326. Under IFRS, according to IFRS 9,
after initial recognition, the Group subsequently measures the financial guarantees at the higher of (1) the amount of the loss allowance
and (2) the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the
principles of IFRS 15. Accordingly, the reconciliation includes a difference in financial guarantee to reduce the liabilities recorded.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
Under U.S. GAAP, for operating leases,
the amortization of the right-of-use assets and interest expense related to the lease liabilities are recorded together as lease expense
to produce a straight-line recognition effect in the income statement. Operating lease expense is recorded in a single financial statement
line item on a straight-line basis over the lease term, there is no amount recorded as interest expense, and the “interest”
amount is used to accrete the lease liability and to amortize the right-of-use asset.
Under IFRS, lessees account for all
leases like finance leases in ASC 842. The right-of-use asset is amortized to amortization expense on a straight-line basis, while the
interest expense is recorded in connection with the lease liabilities on the basis that the lease liabilities are measured at amortized
cost. Amortization and interest expense are required to be presented in separate line items by the lessee.
| (iv) | Share-based compensation |
| 1) | Awards with performance targets met after the service period |
Under U.S. GAAP, a performance target
that may be met after the requisite service period is complete, such as the fulfilment of a qualified successful IPO, is a performance
vesting condition. The fair value of the award should not incorporate the probability of a performance condition vesting, but rather should
be recognized only if the performance condition is probable of being achieved. The cumulative share-based compensation expenses for the
share options that have satisfied the service condition were recorded in August 2020. Under IFRS, a performance target that may be
met after the requisite service period is a non-vesting condition and is reflected in the measurement of the grant date fair value of
an award, and share-based compensation expenses for the share options were recognized during the requisite service period based on the
service conditions. Thus, share-based compensation expenses were recorded earlier under IFRS than under U.S. GAAP.
| 2) | Attribution – awards with graded-vesting features |
For the options and RSUs granted to
employees with service condition only, the share-based compensation expenses were recognized over the vesting period using straight-line
method under U.S. GAAP. While under IFRS, the graded vesting method must be applied.
| 3) | Accounting for forfeitures of share-based awards |
Under U.S. GAAP, companies make an
entity-wide accounting policy election to account for award forfeitures as they occur or by estimating expected forfeitures as compensation
cost is recognized, and the Group has chosen to account for forfeitures when they occur. Under IFRS, a similar policy election won’t
be allowed, forfeitures must be estimated.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL INFORMATION (CONTINUED)
(All amounts in thousands, except for share and
per share data)
| (v) | Issuance costs in relation to the IPO |
Under U.S. GAAP, specific incremental
issuance costs directly attributable to a proposed or actual offering of securities may be deferred and charged against the gross proceeds
of the offering, shown in equity as a deduction from the proceeds.
Under IFRS, such issuance costs apply
different criteria for capitalization when the listing involves both existing shares and a concurrent issuance of new shares of the Company
in the capital market, and were allocated proportionately between the existing and new shares. As a result, the Group recorded issuance
costs associated with the listing of existing shares in the profit or loss.
| (vi) | Investments measured at fair value |
Under U.S. GAAP, the investment without
readily determinable fair values could elect an accounting policy choice. The Group elects the measurement alternative to record these
equity investments without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable
price changes.
Under IFRS, these investments were
classified as financial assets at fair value through profit or loss and measured at fair value with changes in fair value recognized through
profit or loss. Fair value changes of these long-term investments were recognized in the profit or loss.
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