Key Takeaways:
- Beike Q2 net income rose 100.8% to RMB2.6 billion as gross margin hit 28.6%.
- H1 revenue fell 12% to RMB43.4 billion while GTV dropped 4.5% to RMB1.65 trillion.
- Adjusted operating margin reached 14.6%, the highest in three years.
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Beike Q2 net income doubles to RMB2.6 billion on margin gains
Beike reported Q2 net income of RMB2.6 billion, up 100.8% from a year earlier, as gross margin climbed to 28.6%.
"The scale of our housing transaction services recovered, while the Company's profitability further improved," Chief Financial Officer Tao Xu said.
Net revenues fell 5.7% to RMB24.5 billion (US$3.6 billion) from RMB26.0 billion a year earlier, as home renovation and rental revenue declined. Operating expenses dropped 14.1% to RMB4.0 billion, lifting adjusted operating margin to 14.6% and adjusted net income margin to 13.0%, both the highest in three years.
The company repurchased about US$250 million of shares in the quarter, including its first buybacks in Hong Kong. Beike held RMB56.0 billion in cash, equivalents, restricted cash and short-term investments as of June 30.
For the first half, net revenue fell 12% to RMB43.4 billion, while total transaction value dropped 4.5% to RMB1.65 trillion. Net profit rose 79.4% to RMB3.879 billion, and adjusted net profit climbed 49.2% to RMB4.796 billion.
Existing home transaction revenue rose to RMB7.02 billion in the quarter from RMB6.72 billion a year earlier, while new home revenue increased to RMB8.95 billion from RMB8.62 billion. Home renovation and furnishing revenue fell to RMB3.19 billion from RMB4.57 billion, and home rental services revenue dropped to RMB4.83 billion from RMB5.67 billion.
The buyback program allows repurchases of up to US$5 billion of Class A shares and ADSs through Aug. 31, 2028. As of June 30, Beike had bought about 185.4 million ADSs on the New York Stock Exchange for roughly US$2.97 billion, plus 4.9 million Class A shares in Hong Kong for about HK$201.5 million.
The profit surge shows cost cuts are outweighing a still-soft Chinese property market, where transaction volumes remain under pressure. Investors will watch the earnings call on Aug. 21 for updates on segment margins and whether the buyback pace continues.
This article is for informational purposes only and does not constitute investment advice.
