BEKE - KE Holdings ADSs climb after Q2 earnings beat recovery seen in H2

KE Holdings ( NYSE: BEKE ) ADSs have gained 3.5% in Tuesday premarket trading after Q2 revenue beat the Wall Street consensus and the company expects profitability of its home transaction services business to recover in the second half of the year. Its revenue guidance for Q3, though, is less than the average analyst estimate.

The Chinese real estate app company known as Beike expects Q3 revenue of RMB 16.5B-RMB 17.0B (~US$2.5B), less than the consensus estimate of $3.04B.

In the past year, the real estate industry in China slumped after the country's government tightened regulations to reduce the sector's ballooning debt.

Q2 net revenue of RMB 13.8B ($2.1B) surpassed the consensus of $1.59B and fell 43% from the the year-ago quarter.

Q2 adjusted net loss per ADS was RMB 0.52 (US$0.08), better than the exp ected loss per ADS of $0.21, and compared with adjusted net income per share of RMB 1.37 in Q2 2021.

"Despite the rocky market recovery, we were able to take a series of cost-management measures and allocate resources more efficiency-oriented in order to enhance profitability," said Beike Chief Financial Officer Tao Xu. 'As a result, we’ve gained a larger operating leverage for our housing transaction services business against the challenging market environment, and we believe our profitability for the housing transaction services will gradually recover in the second half of this year."

Gross transaction value was RMB 639.5B ($95.5B), down 47.6% Y/Y. Existing home transactions GTV of RMB 393.5B ($58.7B) dropped 40%, and GTV of home renovation and furnishing grew to RMB 1.3B ($0.2B) vs. RMB 47M in the year-ago period. GTV of emerging and other services fell 69% Y/Y to RMB 22.0B ($3.3B).

Earlier, KE Holdings ( BEKE ) non-GAAP EPADs  of -$0.08 beats by $0.13, revenue of $2.1B beats by $510M

For further details see: