KE's Q3 net revenue increased by 26.8% year-on-year, while net profit slightly decreased by 0.17% year-on-year | Financial Report Insights

Thanks to the increase in net income from existing housing transaction services and the expansion of home renovation and rental businesses, KE's net income performance in the third quarter was strong.

On Thursday, November 21, KE announced its third-quarter performance, with the following data:

1) Key Financial Data

Total Transaction Value (GTV): The company's total transaction value in the third quarter was 736.8 billion yuan (approximately 105 billion USD), a year-on-year increase of 12.5%.

Net Income: The company's net income in the third quarter was 22.6 billion yuan, a year-on-year increase of 26.8%.

Net Profit: The company's net profit in the third quarter was 1.168 billion yuan, compared to 1.17 billion yuan in the same period last year, a year-on-year decrease of 0.17%. The adjusted net profit for the third quarter of this year was 1.782 billion yuan.

2) Cost and Expenses

General and administrative expenses were 1.9 billion yuan, basically flat compared to the same period last year.

Sales and marketing expenses were 1.9 billion yuan, an increase of 18.6% compared to 1.6 billion yuan in the same period last year, mainly due to increased sales and marketing expenses for home renovation and decoration businesses, as well as marketing and promotion expenses for new affiliated brands and store business expansion.

R&D expenses were 573 million yuan, an increase of 21.5% compared to 472 million yuan in the same period last year, mainly due to an increase in the number of R&D personnel and rising technical service costs.

Non-Real Estate Transaction Business Revenue Increased by Over 50%, Accounting for 38.3% of Total Net Income

Specifically, among the total transaction value, the GTV of existing housing transactions was 477.8 billion yuan, a year-on-year increase of 8.8%. The GTV of new housing transactions was 227.6 billion yuan, a year-on-year increase of 18.4%.

KE's Executive Director and Chief Financial Officer Xu Tao stated:

"The second-hand housing market is operating relatively smoothly, while the new housing market is still in the bottoming phase."

In terms of non-real estate transaction businesses, the GTV for home renovation and furniture was 4.1 billion yuan, a year-on-year increase of 24.6%. The GTV for emerging and other services was 27.3 billion yuan, a year-on-year increase of 31.9%.

Revenue from non-real estate transaction businesses increased by 54.3% year-on-year, accounting for 38.3% of total net income, an increase of 6.8 percentage points compared to the same period last year.

In terms of operations, the financial report showed that as of September 30, 2024, the number of company stores was 48,230, a year-on-year increase of 12.1%; the number of active stores was 46,857, a year-on-year increase of 14.6%. The average monthly active users (MAU) for the quarter were 46.2 million, a decrease from 49.2 million in the same period of 2023.

KE's Chairman and CEO Peng Yongdong stated, "In October, the platform's transaction volume saw a significant rebound, marking the beginning of market recovery."

After the financial report data was released, KE's stock fell nearly 6% in pre-market trading.