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

The real estate market is showing signs of recovery, alongside the smooth implementation of the “One Core, Three Wings” strategy. Shell (Beike) has delivered steady performance.

Recently, Beike released its 2025 Q1 performance data, continuing the growth trend from the latter half of last year. In Q1, total transaction volume (GTV) reached RMB 843.7 billion, a year-over-year increase of 34.0%; net revenue was RMB 23.3 billion, up 42.4% year over year; and net profit was RMB 855 million.

More specifically, Beike’s operations have highlighted many strengths. First, the total transaction value for its secondhand home and new home businesses was significantly higher than the market average, demonstrating the competitiveness of leading companies. Second, its home rental and home renovation business grew rapidly, becoming a new growth engine.

Brokerage business delivers high growth Non-real-estate transaction services become a “second growth curve”

Brokerage business is Beike’s core business, and since the second half of last year it has continued to perform above expectations.

Out of the Q1 total transaction volume of RMB 843.7 billion, transaction volume for existing homes was RMB 580.3 billion, up 28.1% year over year; transaction volume for new homes was RMB 232.2 billion, up 53% year over year. It is worth noting that this performance was achieved against a backdrop of fluctuations in real estate sales. According to data from CRIC, in Q1, the sales amount of Top 100 developers fell by about 7% year over year.

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

Among them, the AI home-finding assistant “Budding” is for users. Its AI deep reasoning capabilities, combined with real, verified listing data, can better understand users’ home-finding needs and intelligently recommend suitable properties, providing users with intelligent and efficient home-finding products. The lead-facing assistant “Laike” is for real estate agents, improving customer communication efficiency and increasing the deal conversion rate.

In addition, to improve the efficiency of moving customers into homes, in terms of mechanisms, on the one hand, Beike helps facilitate the transfer and circulation of listings by enhancing internal fine-grained management—using tools such as the landlord’s workbench, an AI intelligent listing promotion assistant, and offline listing focus meetings. On the other hand, through platform operations mechanism building, such as a points-based benefits and rights system and regional co-governance councils, it incentivizes landlords to grow upward and strengthen cross-store cooperation.

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

Turning to non-real-estate transaction services, in Q1 net revenue increased 46.2% year over year, accounting for 35.9% of total net revenue, and has already become a real second growth curve.

Of this, the home renovation and home furnishings business delivered net revenue of RMB 2.9 billion, up 22.3%. At the same time, the business contributed a gross profit margin of 32.6%, a historical high, up 2 percentage points year over year.

For rental housing services revenue, in Q1 net revenue reached RMB 5.1 billion, up 93.8% year over year. According to information disclosed by the company, at the end of Q1, the number of units under management exceeded 500,000, of which “Rent Easy” had more than 490,000 units under management.

In 2023, Beike established the “One Core, Three Wings” strategy. “One Core” refers to new home and secondhand home transactions; “Three Wings” refers to full-suite renovation/turnkey interior furnishing, rentals, and Behaojia business. It is worth noting that since 2021, the home renovation business, once launched, has achieved rapid growth, and the rental housing business has also shown strong growth potential. For Beike, non-real-estate transaction services have successfully carved out a second growth curve beyond its main business of real estate brokerage, which helps increase the company’s earnings resilience.

The era of existing-home stock arrives Improving operating quality is key

With improvements in operational efficiency, Beike’s profitability is also increasing. According to company disclosure, in the first quarter of this year, operating expenses were RMB 4.2 billion, down 31.3% quarter over quarter; adjusted net profit was RMB 1.393 billion.

In fact, after several years of adjustments, the profit margin contributed by Beike’s secondhand home and new home businesses has become relatively stable. Meanwhile, as the profit margin contributed by the home renovation business rises, and as the rental housing business and Behaojia business develop, improving operating quality is very likely.

Xu Tao, Executive Director and Chief Financial Officer of Beike, said, “While ensuring reasonable control of costs and expenses, we will continue to support the business to achieve long-term development and fully back the ‘One Core, Three Wings’ strategic initiatives.”

In Q1 this year, Beike’s cash on its balance sheet was RMB 12.773 billion, an increase of nearly 12% from the beginning of the period. In 2024, the company paid total dividends to shareholders of approximately $400 million. Meanwhile, it also spent approximately $716 million on share repurchases. The number of shares repurchased accounted for about 3.9% of the total issued share capital at the end of 2023, and all were canceled. Large-scale repurchase and cancellation reflect management’s confidence in future development, and is also the fulfillment of commitments to return value to shareholders.

From the industry as a whole, since September 2024, a package of policies has driven the recovery of the real estate market, with both transaction volume and the number of house-viewing visits clearly increasing. For 2025, “stabilizing and recovering after the downturn” remains the main theme of the real estate industry.

As a leading domestic real estate brokerage, Beike is expected to benefit directly from the real estate industry’s recovery. More importantly, as the pace of urbanization slows, the real estate sales market is starting to enter the existing-home stock era, which directly benefits Beike.

According to a research report by Founder Securities, over the past four years, the share of secondhand home transactions in China has risen rapidly, reaching a historic high of 46% by the end of 2024, indicating that the secondhand home market is gradually becoming an important part of the real estate market. In addition, as developers face increased pressure to destock, Beike will also have more room to realize its own value.

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

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Editor: Wang Yong