CITIC International lowered the target price for KE to $20.7 and continued to recommend "Buy."

According to the research report from China Merchants Bank International, KE (02423.HK) reported a year-on-year revenue growth of 2.1% to RMB 23.1 billion in the third quarter, in line with market expectations; during the same period, the non-GAAP net profit was RMB 1.3 billion, a year-on-year decline of 28%, but still 5% higher than market expectations. Despite the ongoing adverse environment in the industry, the company's market share in its core housing transaction business has improved, and operational efficiency has also seen enhancements. The bank expects that the improvement in profitability from home decoration and housing rental businesses will also contribute to the recovery of non-GAAP net profit in 2026.

The bank has lowered its revenue and non-GAAP net profit forecasts for 2025 to 2027 by 6% to 16% and 9% to 11%, respectively, with the target price for KE's U.S. stock (BEKE.US) reduced from $22.6 to $20.7. However, the bank anticipates that after a year-on-year decline of 24% in non-GAAP net profit in 2025, there will be a year-on-year rebound of 28% to RMB 7 billion in 2026.

Additionally, the increase in shareholder returns will support valuations, and the bank is optimistic about the company's leadership position in its core business, expecting orderly progress in the development of new businesses, which is likely to drive long-term revenue and profit growth; maintaining a "Buy" rating