| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 47.90 | -5 |
| Intrinsic value (DCF) | 43.76 | -13 |
| Graham-Dodd Method | 14.20 | -72 |
| Graham Formula | 35.70 | -29 |
KE Holdings Inc. (2423.HK) is a leading integrated online and offline platform for housing transactions and services in China, operating primarily through its flagship Beike platform. Headquartered in Beijing and founded in 2001, the company has revolutionized China's real estate services sector through its four core segments: Existing Home Transaction Services, New Home Transaction Services, Home Renovation and Furnishing, and Emerging Services. KE Holdings' innovative Agent Cooperation Network fosters collaboration among service providers while its Lianjia branded stores and Deyou connected brokerage stores create a comprehensive ecosystem. As China's dominant real estate technology platform, KE Holdings leverages massive data capabilities and proprietary SaaS systems to streamline property transactions, connecting buyers, sellers, and agents through seamless digital and physical channels. The company's platform approach addresses the entire housing lifecycle, positioning it at the forefront of China's evolving real estate market despite recent sector challenges.
KE Holdings presents a compelling but nuanced investment case with significant platform advantages offset by sector headwinds. The company's dominant market position in China's real estate services, strong cash position of HKD 11.4 billion, and positive operating cash flow of HKD 9.4 billion demonstrate operational resilience. However, investors must weigh the company's negative beta of -0.75 against China's ongoing property market correction and regulatory environment. The modest net income of HKD 4.06 billion on revenue of HKD 93.5 billion suggests margin pressure, though the dividend yield provides some income support. The investment thesis hinges on KE Holdings' ability to maintain its platform dominance while navigating China's property transition and expanding into higher-margin services like home renovation.
KE Holdings maintains a formidable competitive position through its scale, network effects, and technology integration. The company's Beike platform benefits from massive data accumulation from millions of property listings and transactions, creating significant barriers to entry. Its Agent Cooperation Network (ACN) system represents a key competitive advantage by fostering collaboration rather than competition among agents, creating a virtuous cycle that strengthens platform loyalty. However, KE Holdings faces intensifying competition from both traditional real estate agencies expanding their digital capabilities and technology companies entering the proptech space. The company's integration of online and offline services through Lianjia stores provides a unique omnichannel advantage that pure-play digital competitors cannot replicate. While its scale provides cost advantages in customer acquisition and technology development, KE Holdings must continuously innovate to maintain its leadership as competitors develop similar platform models. The company's expansion into home renovation and furnishing represents a strategic move to diversify revenue streams beyond transaction-based services, though execution risks remain in these adjacent markets.