Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>The decline of new home sales was narrowed in the past ten months.</li>
<li>New home, rental, and furnishing businesses grew strongly in 3Q24.</li>
<li>We believe the operating margin will improve in 2025 and 2026.</li>
</ul>


The decline of new home sales was narrowed in the past ten months.
New home, rental, and furnishing businesses grew strongly in 3Q24.
We believe the operating margin will improve in 2025 and 2026.


KE (BEKE): New Home Decline Narrowed, The Top Agent Needed by Landlords and Developers

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Beike (BEKE) reported C3Q24 revenue in-line with our estimate and consensus but non-GAAP operating profit 26%/25% below, mainly due to higher commission rebate and agent salaries;</li>
<li>Strong rebound in home transaction volumes in October and November, led to our C4Q24 revenue 16% above consensus. But the rebound needs more stimulus to sustain;</li>
<li>We maintain the stock as BUY and raise TP to US$25 to reflect the near term rebound and steady market share gains.</li>
</ul>


Beike (BEKE) reported C3Q24 revenue in-line with our estimate and consensus but non-GAAP operating profit 26%/25% below, mainly due to higher commission rebate and agent salaries;
Strong rebound in home transaction volumes in October and November, led to our C4Q24 revenue 16% above consensus. But the rebound needs more stimulus to sustain;
We maintain the stock as BUY and raise TP to US$25 to reflect the near term rebound and steady market share gains.


[KE Holdings Inc. (BEKE US, BUY, TP US$25) TP Change]: C3Q24 Review: C4Q24 Rebound but What’s Next?

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Beike reported (21 Nov) 3Q24 results: revenue increased 27% YoY to RMB22.6bn, 1.5%/4.7% below Bloomberg consensus/CMBI estimates, mainly due to the mixed performance where existing home GTV (EHT) was dragged by low home transaction sentiment and new home transactions (NHT) were benefited from market share gains.</li><li>Non-GAAP net income was RMB1.8bn, representing a margin of 7.9%, in-line with both our estimates and consensus, thanks to fee controlling measures. We remain positive on Beike given its continuously increasing market share in EHT &amp; NHT businesses and smooth expansion of new business.</li><li>Our SOTP-based target price is lifted to US$23.3 (was US$21.5), including US$22.3 for Beike Core and US$0.9 for Shengdu, translating into 21.4x 2025E PE (non-GAAP). Maintain BUY</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Beike reported (21 Nov) 3Q24 results: revenue increased 27% YoY to RMB22.6bn, 1.5%/4.7% below Bloomberg consensus/CMBI estimates, mainly due to the mixed performance where existing home GTV (EHT) was dragged by low home transaction sentiment and new home transactions (NHT) were benefited from market share gains.Non-GAAP net income was RMB1.8bn, representing a margin of 7.9%, in-line with both our estimates and consensus, thanks to fee controlling measures. We remain positive on Beike given its continuously increasing market share in EHT &amp; NHT businesses and smooth expansion of new business.Our SOTP-based target price is lifted to US$23.3 (was US$21.5), including US$22.3 for Beike Core and US$0.9 for Shengdu, translating into 21.4x 2025E PE (non-GAAP). Maintain BUYContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ke Holdings (BEKE US) - To Ride on the Policy Tailwind in 4Q

<ul>
<li>In 2Q24, KE’s revenue grew by 20% YoY despite the weak property market.</li>
<li>We believe property developers and personal landlords need KE more than the prosperous time.</li>
<li>We believe the stock has an upside of 148% for the end of 2025. Buy.</li>
</ul>


In 2Q24, KE’s revenue grew by 20% YoY despite the weak property market.
We believe property developers and personal landlords need KE more than the prosperous time.
We believe the stock has an upside of 148% for the end of 2025. Buy.


KE (BEKE US): Why Earning Money in Weak Market

<ul>
<li>KE Holdings (BEKE) reported C2Q24 revenue 12%/9% higher than our estimates/consensus, and non-GAAP NI 19%/49% higher than our estimates/consensus, due to market share gain and take rate hike.</li>
<li>We particularly like its business scalability, as its agent efficiency kept stable despite growing connected agents.</li>
<li>We maintain the stock as BUY rating and raise TP to US$24 to reflect the better growth outlook from market share gains.</li>
</ul>


KE Holdings (BEKE) reported C2Q24 revenue 12%/9% higher than our estimates/consensus, and non-GAAP NI 19%/49% higher than our estimates/consensus, due to market share gain and take rate hike.
We particularly like its business scalability, as its agent efficiency kept stable despite growing connected agents.
We maintain the stock as BUY rating and raise TP to US$24 to reflect the better growth outlook from market share gains.


[KE Holdings Inc. (BEKE US, BUY, TP US$24) TP Change]: Market Share Gain Is the Main Catalyst

China

KE Holdings Inc. operates as an integrated online and offline platform for housing transactions and services. The Company offers existing and new home sales, home rentals, home renovation, real estate financial solutions, and other services. KE Holdings conducts businesses in China.

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KE Holdings (BEKE US)

KE (BEKE): New Home Decline Narrowed, The Top Agent Needed by Landlords and Developers

The declining of new home sales was narrowed in the past ten months. New home, rental, and furnishing businesses grew strongly in 3Q24. We believe...

Ming Lu

[KE Holdings Inc. (BEKE US, BUY, TP US$25) TP Change]: C3Q24 Review: C4Q24 Rebound but What’s Next?

Beike (BEKE) reports in-line revenue but lower operating profit, with a strong rebound in home transaction volumes leading to increased revenue....

Blue Lotus Research Institute