Daily Brief Financials: KE Holdings , Country Garden Holdings Co, Bakkt, Foxtons, Information Services and more

• KE Holdings’ (Beike) C3Q23 revenue was 7.7%/11.6% higher than our est./cons., non-GAAP net income beat our est./cons. by 35%/119%. Existing home sales and non-transaction biz drove the bottom line beat.
• We expect Beike C4Q23 to grow 20% YoY, 33% in existing home and 5% in new home, supported by gradual recovery of home transaction and Beike’s market share gain;
• We reiterate BUY rating and raised TP by US$0.5 to US$24.5/ADS, also taking into account of progress in home renovation and rental management.

• Reuters reported on 8-November that China’s State Council has asked the Guangdong local government to arrange the rescue of Country Garden Holding.
• Ping An’s spokesperson said the company had not been approached by the government.
• There is also no guarantee on when bondholders will get paid back and how much the recovery value will be.

• On November 9, Bakkt announced the expansion of its international footprint and custody client base.
• Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year-end.
• CEO Gavin Michael said the company was “working efficiently to expand into international regions with more regulatory clarity and sizeable addressable markets.”

In Q323, all three of Foxtons’ divisions outperformed their respective markets, taking market share – the direct result of management action to avoid the same mistakes made during previous downcycles where costs were cut, a position from which it would subsequently struggle to recover. Foxtons’ new strategy focuses growth on non-cyclical revenue streams and decouples performance from sales market cycles. The latest value-enhancing acquisition leads to a net upgrade in estimates in FY24. We therefore raise our ‘base’ case valuation from 59p/share to 62p, which implies more than 60% upside, and our preferred ‘bull’ case valuation from 124p/share to 127p.

Despite prevailing macroeconomic headwinds and a subdued Canadian property market, Information Services Corporation (ISC) demonstrated year-on-year top-line and adjusted EBITDA growth in Q323. This was largely attributable to the MSA extension, augmented by sustained organic growth of the Services division. Net income was affected by heightened net finance costs, as a result of a rise in net debt from the C$150m upfront payment for the MSA extension. Nevertheless, ISC remains on a trajectory of securing new contracts and management reaffirms its FY23 revenue and adjusted EBITDA guidance. We maintain our forecasts and valuation of C$37, implying 79% upside.