Transformation effectiveness + stock market recovery, BEKE-W (02423) profit margin rises to 14.6%: both second-hand and new homes increase, home decoration rental controls quantity while improving quality.

On August 21, BEKE-W (02423) released its performance announcement for the second quarter of 2026. In the second quarter, Beike achieved a net revenue of 24.5 billion yuan, with adjusted operating profit of 3.59 billion yuan and an adjusted operating profit margin of 14.6%, an increase of 8.5 percentage points year-on-year. The transaction volume of second-hand houses on the Beike platform grew by 25% year-on-year, with the company's overall GTV reaching 933.8 billion yuan, a year-on-year increase of 6.3%, marking the first rise in a year. The company's strategic transformation, combined with the recovery of the existing market, has led to Beike delivering its best financial report in three years. Beike's co-founder, chairman, and CEO Peng Yongdong stated, In the second quarter of 2026, we observed a further consolidation of the companys operational foundation, and organizational changes have begun to integrate into our daily operations. We are striving to improve the synergy between professional service providers, the platform, and AI, starting from consumer needs and frontline practical issues: professional service providers assume judgment and responsibility, the platform provides collaboration and fulfillment guarantees, and AI helps convert professional experience into verifiable and reusable organizational capabilities. As we move into the next phase, we will continue to pursue quality scale growth, laying a solid foundation for the company's long-term sustainable development. Beike's executive director and CFO Xu Tao remarked, The companys profitability has further improved, with profit margins from all main businesses showing year-on-year and sequential increases, driving the gross profit margin up by 6.7 percentage points to 28.6%. The adjusted operating profit margin and adjusted net profit margin reached 14.6% and 13.0%, respectively, both setting three-year highs. While profits have improved, Beike continues to maintain robust cash management and collection efficiency. In the second quarter, Beike's operating cash inflow netted 6.6 billion yuan. As of the end of the second quarter, the broad cash balance, excluding customer reserve funds, was approximately 67.3 billion yuan; the turnover days of new home accounts receivable were about 39 days, reducing by approximately 12 days year-on-year. The number of second-hand house transactions grew by 25%, making Beike's financial report a beacon for the warming market in the existing market era. As the real estate market transitions into the existing market era, regulation policies in multiple regions have promoted the continuous release of housing consumption potential, leading to increased activity in second-hand housing transactions. In the second quarter, the transaction volume of second-hand houses on the Beike platform grew by 25% year-on-year, driving the GTV of existing homes up by 8%, with revenue reaching 7 billion yuan; the company's overall GTV reached 933.8 billion yuan, a year-on-year increase of 6.3%. During the reporting period, Beike did not rely on the number of stores to achieve growth but instead drove growth by enhancing the productivity of individual stores. It further shifted its operational focus to improve the efficiency of existing stores, helping store owners identify operational issues and deepen cross-store cooperation. In the second quarter, the number of Beilian partners remained essentially stable year-on-year, while the average transaction volume of second-hand houses per store grew by 26% year-on-year, driving a 30% year-on-year growth in the overall second-hand housing transaction volume. In the second quarter, Beike's existing housing business contributed a profit margin of 46.1%, an increase of 6.1 percentage points year-on-year. The GTV of new home business grew by 1.2% year-on-year in the second quarter and rose by 77.1% month-on-month, outperforming the market. Revenue increased by 3.8% year-on-year to 8.9 billion yuan. The most significant change in Beike's real estate transaction business this quarter is that as transaction scales recover, the efficiency of the platform network, the economic performance of various business units, and cash inflows have all significantly improved. The improvement in transaction business, combined with the company's sustained optimization over the past year in business structure, unit efficiency, and resource allocation, has greatly aided the overall profit enhancement of Beike. 150 days into the transformation, "consumer-centered" innovative measures have reopened the growth channel. Since proposing the "consumer-centered" strategic transformation at the end of March, Beike has continued to implement a series of reform measures. Focusing on key consumer issues such as "how to clarify needs, how to compare options, how to assess prices and transaction timing," Beike is redesigning professional roles, collaboration processes, and service tools. Innovations in service mechanisms, such as property managers, community open days, sincere selling, and online service assistants, embrace new media to provide decision-making content references, accumulate experience for excellent service providers, and reduce burdens for brokers through AI assistants. For example, the community open days have been piloted in Shanghai and Beijing, allowing owners to more quickly see real demand, price feedback, and competitive sourcing. In the Beijing pilot, community open days led to increased viewings, accelerating the transaction process between buyers and sellers. As of now, community open days have been implemented in 67 communities in Beijing, with the average viewing volume on the trial days increasing by 2.6 times, and the signing rate within seven days for buyers participating in the open days is about twice that of those who did not participate. On the buyer's side, Beike is providing personalized property management services through an "AI + human" online service assistant in certain scenarios, helping buyers clarify their property needs before selecting a home and matching clearer client needs with more suitable brokers. In Beijing, since the pilot started in March this year, nearly 100,000 people have been served by this service. Clients who have had in-depth communication with the online service assistant before being handed over to brokers show a six-fold increase in transaction efficiency. Several initiatives for enhancing residential decision-making capabilities have begun to yield results; the platform's value is extending from organizing transactions to further supporting user decisions. This change is opening up new growth opportunities for the transaction business. Home decoration and rental businesses are actively controlling the pace to achieve high-quality growth. In recent times, Beike's home decoration and rental services have prioritized quality growth. In the home decoration business, Beike actively adjusts its operational model, reduces investments in low-quality customer acquisition channels, and focuses on core markets, making delivery quality the foundation for long-term development. City general managers lead random inspections of decoration sites to address and rectify identified issues promptly, bringing quality management to the forefront of the construction process; Beike is further diversifying the pricing tiers and product configurations of its comprehensive decoration packages, flexibly placing value showrooms around the signing center to make decoration plans more intuitive and comparable. In the second quarter, home decoration revenue reached 3.2 billion yuan, with a profit margin of 39.6%, a year-on-year increase of 7.5 percentage points, reaching the best level in history. In the housing rental business, standardized and safe rental services are at the core of capability building. During the reporting period, Beike released the rental industry's first enterprise standard for residential safety, embedding safety management throughout the entire process of admission checks, delivery re-inspections, and inspections during tenancy. The worry-free rental service has evolved into a lighter, lower-risk net method product model, with net method products now accounting for over 50% of managed properties. As of the end of the second quarter, Beike managed over 790,000 rental properties, a year-on-year increase of approximately 34%. In the second quarter, rental service revenue reached 4.8 billion yuan, with a profit margin of 15.3%, a year-on-year increase of 6.9 percentage points; simultaneously, the renewal rate for owners reaching the end of their contracts was approximately 74%, an increase of about 4 percentage points year-on-year. As service scale continues to grow, the product structure, profitability, and owner retention have all improved.