Q1 2023 KE Holdings Inc. Earnings Call
Speaker 1: Hello ladies and gentlemen.
Speaker 1: Thank you for standing by for K.E. Holdings, Inc.'s first quarter 2023 earnings conference call.
Speaker 1: At this time all participants are in listener only mode.
Speaker 1: Today's conference call is being recorded.
Speaker 1: I would now like to turn the call over to your host, Ms. Sateen Lee, IR Director of the company. Please go ahead, Sateen.
Speaker 2: Thank you, operator. Good evening and good morning, everyone. Welcome to KE Holdings or BECA's first quarter of 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website, investors.ke.com.
Speaker 2: On today's call, we have Mr. Stanley Peng, our Co-Founder, Chairman and Chief Executive Officer, and Mr. Tao Xu, our Executive Director and Chief Financial Officer. Mr. Peng will provide an overview of our strategies and business developments, and Mr. Xu will provide additional details on the company's financial results.
Speaker 2: Before we continue, I refer you to our Safe Harbor Statement in our earnings press release, which applies to this call as we will make forward-looking statements.
Speaker 2: Please also note that BECA's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to the company's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures.
Speaker 2: Lastly, unless otherwise stated, all figures mentioned during this conference call are in RMB. With that, I will now turn the call over to our Chairman and CEO , Mr. Stanley Peng. Please go ahead, Stanley.
Speaker 3: Thank you, Osu-tin. Hello everyone. Thank you for joining Bakers Post Quarter 2023 on this conference call.
Speaker 3: During the past quarter, we have witnessed the real estate market in China, along with various other industries, rebounding from the pandemic.
Speaker 3: GTV of existing home sales in China increased by 51%, while GTV of new residential home sales increased by 7%.
Speaker 3: with sales of the top 100 developers growing by 2%.
Speaker 3: all on a year-over-year basis.
Speaker 3: existing home transactions GTV on our platform increased by 78% year-over-year in the first quarter. And our new home cell GTV increased by 44% year-over-year in the fourth quarter outperforming the industry by a great extent.
Speaker 3: In the past few years, aimed at the tremendous volatility in the market, our continued investment in our ACN network and infrastructure, our persistent support of quality service providers, and our efforts to shift.
Speaker 3: toward higher quality, more efficient development.
Speaker 3: have enabled our outstanding performance during the market recovery process.
Speaker 3: As the external market gradually stabilizes and our organization gets stronger, we fast people to questions such as where we can find more growth opportunities going forward, what are the drivers and how much upside.
Speaker 3: If there are in the next 10 years, will we play defense or continue to pursue high-speed course?
Speaker 3: And how will we allocate our significant cache partition?
Speaker 3: These questions are important to both our investor and our company.
Speaker 3: These questions are important to both our investor and our company. I haven't pondered these questions.
Speaker 3: Today, I would like to take this opportunity to face the future together and share my thoughts on our cause over the next decade.
Speaker 3: Most importantly, we are an organization that always seeks development because we are committed to making the industry better. Our mission gives us a great cause. Baker was established to serve our mission of admirable service, joyful living.
Speaker 3: It has made us who we are rather than the other way around.
Speaker 3: So, we won't stop.
Speaker 3: Because in our business, developments and growth cannot be met with high frequency data.
Speaker 3: but need to be viewed with a three-year aesthetic.
Speaker 3: Sustainable growth is not in its pension, not scale. Rather, it arises from customers and their unmet needs in the past of initiatives such as transparent transactions, authentic listings, full commission refunds, refunds for failed transactions.
Speaker 3: and the protection of secure transactions were all originated from the question.
Speaker 3: which needs in the housing industry have not been made.
Speaker 3: Meeting with these needs requires us to think it big and think far.
Speaker 3: At this point in time, customer demands in the housing industry are far undeserved.
Speaker 3: Customers demands for better living, including the quality of homes, quality of home, renovation and furnishing products and services.
Speaker 3: and a better home rental insurance.
Speaker 3: and a better home rental endurance.
Speaker 3: I'm fulfilled.
Speaker 3: These are real needs which will provide us with need to continue to grow in the future.
Speaker 3: to achieve sustainable developments and growth. The key is to improve our capabilities.
Speaker 3: First, our development will be built on our stronger engine collaboration network.
Speaker 3: which forms the foundation of our infrastructure, holding quality as a...
Speaker 3: Pre-requisition and home listings at its core. A series of rules and mechanisms in power similes, collaboration of brands, stores and agents within this network. Our ACN's call on the line assets is how customer trusts the agents.
Speaker 3: We believe that a road-based competition for quality service, among service providers, will offer customers higher transaction efficiency and he hands their service insurance. In the future, our AC and can equal additional roles and column more links along the housing ecosystem value chain.
Speaker 3: which translates to a huge potential for innovation in the network.
Speaker 3: As such, the most critical foundation for our development is to establish and maintain the connection between the ACN and the stores, as well as issue collaboration quality while increasing customer trust in the ACN, altogether making our ACN stronger.
Speaker 3: Second, development comes from the rise of high quality brands. Brands are built on community customers in their costs. As well as organizations, ability to create emotional connections with these customers. In the future, I believe, virtuous competition.
Speaker 3: We will empower high quality brands to connect and aggregate more outstanding stores and agents. Which in turn will have full-ster stronger capabilities within the AC network to improve service providers' efficiency, thereby taking their incomes to the next narrow.
Speaker 3: connect and aggregate more outstanding stores and agents. Which in turn will have full-ster stronger capabilities within the AC network to improve service providers' efficiency, thereby taking their incomes to the next level. Sir.
Speaker 3: Development is also propelled by the enhancement of such providers' efficiency that centers on raw quality. For 20 years in the past, we benefited from the tailwind or rapid market growth.
Speaker 3: The main development cost of the real estate brokerage industry was about achieving skill, growth, and risk quality as a pre-equilibration.
Speaker 3: Whereas fundamental industry efficiency did not improve substantially if the average transaction per agent has been hovering at 0.3 per month. Looking at the next 10 years, we think we will see a shift to enhance efficiency with quality as a core focus. We firmly believe that the best way to improve efficiency is by using a new technology that can help you achieve your goals. We believe that the best way to improve efficiency is by using a new technology that can help you achieve your goals.
Speaker 3: that this is a right past even nuinzo, it is difficult. That's quality improvement delivered about a customer endurance and efficiency against driver agent success, automatically resulting in the success or storm runs a platform and industry as a whole.
Speaker 3: On a storefront, the trend to one last store is inevitable going forward. Only the last store can bring high incomes to store on the earth and ages while raising the operational service rates home.
Speaker 3: We need to invigorate store owners' entrepreneurial spirits and furnish them with support to strengthen their multiple and larger store management capabilities.
Speaker 3: Meanwhile, we will need to stimulate high quality agents and motivation to have them grow, as well as, nurture and retain them.
Speaker 3: which also serves as a crucial measure to enhance straw efficiency.
Speaker 3: On a service provider from the residential service industry, where agents and stores are at the core, the rather personal value of a service provider is also an invisible trend with the potential for lifelong careers.
Speaker 3: The value of service providers in our industry grows all the time, and they deserve more in terms of income and rewards.
Speaker 3: Their growth and development also lead to better appearances for customers, which is why we are committed to prioritizing the rights and interests of social providers.
Speaker 3: Our next step is to improve the working environment and mindset of service providers by committing to the institution of initiatives that ensure their well-being with focus on areas such as rest and vacation time.
Speaker 3: There are many opportunities for improvements and progress in this industry.
Speaker 3: and we are determined to make that happen. In terms of efficiency improvement, the adoption of scientific amendment and technological applications for the consistently driving progress in the industry, and we and we will continue to empower future efficiency gains.
Speaker 3: Scientific management has been a crucial component and way of thinking for Lian Jia to overcome growth bottlenecks in the past.
Speaker 3: through a series of tools and mayors that we have accumulated.
Speaker 3: We can discover the laws, dictating events, to guide our actions and ensure we achieve our goals. A bit of balance, both long-term and short-term objectives, is also crucial during the process of development. We believe.
Speaker 3: that comparing scientific measurements with KIR for people. We will have asked, reach our next level of success in addition. Our organization has stand from a combination of service-oriented and engineering-oriented genes.
Speaker 3: and the integration of industry practice and technology application of the underlying driving forces for our continuous developments.
Speaker 3: The emergency of new technologies, such as AIGC, is also possessed to start need to continue through industry efficiency and make high-quality service providers even more valuable.
Speaker 3: Preparing us to new heights.
Speaker 3: Honestly, we do a start with taking care of customers, reflecting on our positive success. We recognize that our ability to dedicate to the address customer pain points has been in integral to our growth. And customers satisfaction is a foundation of our success.
Speaker 3: The optimal charts generate generally benefits with customers and service providers. Taking authentic home listing as an example, it's clear that such listing up pre-sicene, what our customers need as we persist in promoting...
Speaker 3: These things customers gradually progress from that to believe, fulfilling our service providers with a tremendous sense of motivation that prepares the entire team to improve their capabilities.
Speaker 3: We apply the same mentality across our organization. From existing home business, new home business, home rental business, and home renovation and affordable business to broader housing services in each crisis.
Speaker 3: This mindset has been inspired to develop our capabilities in customer recognition and the force of growth, our own growth.
Speaker 3: opening vast possibilities for its passion. Every time we embark on a new venture, we remain true to our original exploration. We strive for development and growth in order to meet our customers' needs and resist the human tendencies endured towards entropy increase.
Speaker 3: We reduce costs and increase efficiency to a world-nice company syndrome and improve our professional capabilities.
Speaker 3: We firmly invest in our foundational capabilities rather than make quick profits and a use of time. Our scale in...
Speaker 3: happiness matters. All of these efforts are aimed at providing the best possible service to our customers and creating lasting value through a transcending multicycle.
Speaker 3: We also focus on shareholders to return to both rewards and align ourselves with life-minded investors who share our long-term vision and their stories of us through the macro cycles.
Speaker 3: Finally.
Speaker 3: What makes our organization different is the culture, chefs, about group of people. We have been inspired by customers and service providers. Behind this culture, there is a mission that it allows us to keep motivating former.
Speaker 3: And the model for service, for the living, we aim to have service providers understanding and pursue what's your rights and to help customers to give meaningful feedback to our service providers.
Speaker 3: on Velujenno
Speaker 3: Han Yixing was right to motivate positive feedback and to have it in reward was right.
Speaker 3: We are genuinely his father.
Speaker 3: In a mode by this, we formally believe that our presence in this industry represents a difference for industry practitioners and customers alike.
Speaker 3: This difference will spread and influence more people. Get together, we will climb to the top of our next mountain.
Speaker 3: Thank you. Next, I would like to turn the call over to our staff who will be held to review our first-order financials. Thank you.
Speaker 3: Thank you, Stanley. Thank you, I would like to join you. Before going into the detail of our first culture financial result, I would like to provide a break update on housing market in the first culture.
Speaker 3: Since the beginning of this year, the roads the market has stages to keep in the recovery.
Speaker 3: Bostared by a February policy of preventing risks and supporting the amount.
Speaker 4: coupled with concentrated release of pent-up housing demand from the pandemic.
Speaker 4: Notebook is a single market, so a strong income.
Speaker 4: with housing prices beginning to narrow their yield decline and show their return to quarter-over-quarter increase from the sequential decline in previous periods. The new home market also experienced a moderate recovery, with consumer confidence improving.
Speaker 4: a defect of the one-off release of pent-up demand of attacking nightmare
Speaker 4: wealth release of 10 out of the amount, and the Cincinnati world starting in March.
Multi-transaction volume against your normal life from an excessively high level.
By taking from relatively stable scale of our AC network during the market, protecting slum and effective promotion of refined operations for stores and agents.
We proactively catalyzed the market to recovery tunes under the seasonal dividend as the market rebonded as the beginning of the year.
As a result, our TTV growth significantly outperforms the market.
According to Baker research institutes, in first quarter, 3.0 kg of eaten home cells in China increased by 51.2% year over year.
Love with single transaction GTV on big repy for girl by 77.6% year over year.
The ex-Farm National Bureau of Statistics also showed that the GTV of the New Home South in China equates by 7.1% year-over-year.
While the new home processing TV on bigger platform rose by 44.2% year-over year.
Our next run-news in the fourth quarter reached the R&B 20.3 billion, representing a 61.6% increase year-over year, beating both the hands of our guidance and the street consensus.
The increase was driven by our highly efficient operations, stable machination capability, and organic growth in our home renovation and production activities.
Our gains were further bolstered by the better-than-expanded market recovery. Moreover, in the difficult environment since the second half of 2022-1,
We implement this staunch cost in the expense of optimizations and consistently refine our operations, which makes our organization more efficient and agile.
This effort empowers to deliver strong performance in profitability during the market of the economy.
There have also a lot of to start this year in opposition of the strength, gaining great benefits from our increased operating average.
Therefore, we will report a continued improvement in multiple beneficial metrics.
Our Q1 growth margin was at 31.3%.
God, that income reached RB 2750 million. Well, non-God, that income jumped to RMD 3561 million in the quarter. Compare with RMD 28 million in the same period of 2022.
And then increase of 137% compared from the first quarter of 2021 with a similar brand new scale.
By segment, our natural new from the Sphinx Home Contestant Services increased by 49.3% year-over-year to R&B 9.2 billion Q1.
Primary driven by 37.6% in PTV. Among that, there's income consumption GTV, from B&J, goes by 43.2%.
of which the Remniew was recorded on a gross basis.
Well, TTV, by connected agents, jobs by 117.9% year-year in Q1, filmed by the notable property market recovery in many key areas of cities.
of which the revenue was recorded on a net basis, resulting in the slight smaller growth of the in-home revenue compared to GQB. Our net revenue from the new home transaction services increased by 42.2% year-over-year to RMB 8.4 billion in Q1. Thanks to our outstanding sales and capability.
What customer pays from the single transaction? And the operation, integration of the new home is single business.
faster new home settlements by Lijiang, and targeted market coverage in the first and second-year cities that were forced to recover at the beginning of the year. Particularly, cooperation with state-owned developers accounts for 46% of our sales revenues.
Significing from the factory coordination with home transaction services, the contract sells of our home renovation and the furniture business, total RMB 2.7 billion, up 100 and 8.2% year-old year. And the revenue amount to RMB 1.4 billion.
rising by 50.3% year-over year, both on performance basis. On next running from the merchant offer services.
Inquests by 222.1% year-old year, 2RB 1.3 billion Q1.
From memory, it's useful to increase net revenues from rental property management services and financial services. Our most streamlined cost in the expense structure has led to a significant increase in single-cost profitability amidst the substantial recovery of the market.
In particular, the contribution margin of the Sinhong business jumped to 49% in Q1 up by 11.3 percentage points from the same period of 2002.
and 11.9% from Q4, benefiting from the notable revenue increase.
So year on year decreasing the fixed cost and the rest of the stable variable cost ratio.
The contribution from our job to new home transition services reached 23%.
up by a three point even some edge points on the same period of 2022.
Many driven by the increased percentage of the high productivity progress and the moh, do not personnel stretch out.
Therefore, driven by the higher margins from the existing and the new home business, includes the proportion of home renovations and furniture services with the higher margin, as well as the smaller percentage of the cost-grage to store and the 100 cost of the net revenues.
Trin by the higher margins from the existing and the new home business. Increase the proportion of home renovation and furniture services with the higher margin, as well as the smaller percentage of the cost range to store and the 100 cost of the net revenues. Growth profit.
increased by 186.1% to RMB 6.3% in Q1.
Close margin increased to 31.3% in Q1 from 17.7% in the same period of 2022. Our gap operating expenses increased by 7.5% year-to-ear, QRMD 3.4 billion. Among that, sales and the margin expenses increased by 50.3% to RMD 1,290.
Notably, with the healthy cash collection of the new home business, we have a better provision written back of RMB 127 million in Q1.
Research on development spaces, different spaces by 39 to 72 are being 457 meetings, many due to the decrease of the personnel cost and service.
Research on development spaces, decreased by 69% to 2RB 4507 meetings, many due to the decrease of the personnel cost and services, compensation as a result of the decreased high cost.
Well, maintaining our investment in the new phases, including the home renovation and furniture, our total non-cars since its incurable, with that army 2.61 billion, representing a multiple decrease, both year on year and the cultural punk culture.
While maintaining our investment in the new business, including the home renovation and furniture, our total non-gas expenses in Q1 was at RMB 2.61 billion, representing a notable decrease, both year-on-year and quarter-on-quarter. Income from operations.
with RMB2987 million in Q1, compared to loss from operation of RMB980 million in Q1 2022. The increase in gross margin and input operating leverage have brought about the increase in operating margin to 14.7% in Q1.
from 97.3% in the same period of 2022. Our non-gas income form operations was RMB 3,830 million in Q1. Compared to non-gas loss from operations, or RMB 450 million in the same period of 2022.
Non-capable breeding margins increased to 18.9%.
Compilation that skills 3.6% in the same period of 2022.
Q&A's income was around $2,350 million. Compared to that loss of RMB 600,000 million in the same period of 2022.
and the net income of RMB was $1,559, if you were $2021.
Nonetheless, net income was RMB 3561 million in Q1, compared to RMB 28 million in the same period of 2022.
Our cash position and cash flow remains robust. At the end of March 2023, on the basis of one-time payment of yarn bonus before the Spring Festival, the combined balance of our cash cashback items totaled RMB.
85th was revealed. O, US dollar, 12.4 billion. Half by seven billion from December and the RB 16.2 billion from the end of Cuba 2022.
Among which the Combined Binance of Bob Akash, Keshe Kirlent, Ristreet Keshe and the Shalty Evident, was our M.26.0.0.0.0.0.0.0.0.0. The balance of our long-term Keshe-like items.
Many equities in the long-term investments are mounted to on the 18.7 billion.
Our net operating cash inflow was RMB 7.6 billion Q1, remaining positive for the sixth quarter in a row.
on August 20th, civil management.
Our cash collection from the new home business has exceeded new home brand new for 7 quarters in a row.
Totalling RBA.848 in Q1 New from the ISO was at only 29 days in Q1 further shortening by 5 days from Q4 at 93 days from the same period of 2022
Turning to the guidance of the second quarter of 2023, we expect total revenues to be between R&B 18.5 billion and R&B 19 billion in Q2, representing an increase of approximately 34.3% to 37.9%.
from the same period of 2022. Just forecast, consists of potential impact of the recent roles in related policies at the Markov-Konmin recovery status.
that constitutes the current and preliminary view on our business situation and the market conditions, which are subject to change.
The past three quotes represent three distinct market conditions.
In the third quarter of 2022, the market was on the path of recovery, despite the impact on the yearly hot summer, recurring pandemic outbreaks in sporadic cities, and financial constraints in the new home market, based on historical trends.
We believe the market has reached 80% of its normalized level and we are recording a non-gal-less income of RMB 1,888 million during the quarter.
The fourth quarter of 2022, nevertheless, was extremely difficult. The market was at its heart by the home buyer's low purchase intentions.
to widespread pandemic outbreak across country. Facing this formidable challenge.
We demonstrate the resilience for the ability with a non-gal net income of RMV 1547 minutes.
morning to the first quarter of 2023. The market become exacerbated during the three factors.
Street by Street vectors, the regular home purchase amount, the constant through the release of 10-hours amounts that have been surprised by the pandemic, and the cell home virus early entering to the market for the fair of the rising prices.
This led to the market directly rebounding at the start of this year. Inters extremely hot environment will be reported a non-gaf-less income of RMB 3561 million during the cold. Inters reconsecrature, neutral, extremely cold and hot markets.
We mentioned the remarkable profitability, which clearly demonstrates the value of our platform. We do not favor our hidden market.
capability, which clearly demonstrates the value of our platform. We do not favor or hate in market. No doorway.
Fairly accessible and calm water. Rather, we prefer the market that prioritizes housing's demeaning of multiple situations. Water supply and demand are balanced.
enabling us to showcase our value and achieve sustainable development.
particularly in the first quarter, paper and the platform agent remained objective and rational. It comes a counter-force to the market boom.
in the first quarter, paper and the platform agent remained objective and rational. It comes the comfort force to the market, to the market boom. In terms of our financial strategy.
Building upon our cooperation's fully optimized carbon expense structure, we will continue to enhance quality of our operations and foster effective growth. Final clarifications in wake of new citizens. ?? ?????yre ?ore ??????
We were connected by taking the regional resources allocation to improve the collaboration quality of tribes industry to compete for the access and improve the agents productivity and the storage efficiency.
well connected by targeting the regional resources allocation to improve the collaboration quality attracts the industry to compete for the excellence and improve the agency productivity and storage efficiency. in according to new testing importance.
We will continue to strictly abide by our management of both QIAM and aim for a properly secure function based on the balanced operations.
Financial health and the risk control and the yield contents with the market conditions. Meanwhile, we will make reasonable and appropriate investments in sales and the market based on the pace of market recovery.
We will also decisively invest in the application of Cartoon Network technologies.
Regarding our true-wins business, home renovation and furniture, and the rental property management services, we are not in pursuit of...
fast scale expansion that can be done in the short term. Rather, we expect to validate our unique economy model at some core cities this year.
and the buildings of benchmark cases to replicate it in the larger scale. In addition, we are more determined to enable to invest in our long-term capabilities, including product development capabilities.
So, by chance, and the service cost improvement, as well as continuing to enhance the service providers, professional competencies, and an innovative customer satisfaction.
Oral, we will be more proactive with our initiatives than the contributor to long-term growth and a great vision. Similar to what we eat before with our commitment for the transparent pricing and our central listings.
We will ultimately invest in our people, our growth and our service quality. We are also endeavored to explore the application of new technologies such as AI to operational scenarios in order to tap into small productivity.
potential of the front-tier service providers and the in-house in general. The journey of one self-emotional is made one step at a time.
In that market of research services, we will fortify our foundation with clarity at our core, make a relatelist effort to improve the service provider's working environment.
and bring a better housing service experience to customers. There are also some low-error subscriptions on neck Carnegie Mellon.
We encourage our studies right away and will make a remitting effort with all parties to serve customers for joy for the evening.
Just conclude the mind for a pattern in marks. Now, we are open for questions. Operator, please go ahead.
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Today's first question comes from Harry Chan with City Group. Please go ahead.
Thank you for the opportunity. And first of all, I graduated extremely solid results in the first quarter. So my question is regarding the general housing market. We see that the housing market was in great shape in the first quarter.
and how to interpret this leading indicator. What's the company's view about the future trends of the existing and new home market and how will the market performance differ among different CTTS? Thank you. Thank you, Harit. Regarding your first question.
In the first quarter, the release of a pentagonal home transaction amount, along with the support of the Easing policies, contributes to a significantly revolving trainer, resisting and the new home market.
followed by a normalization of the market. Overall, the China housing market experienced a moderate recovery.
with new characteristics including the demand for home upgrades becoming a solid driving force in the market.
under the 18th of the 18th century, as the major market contributor, and the second-tier city are the strongest of players.
In particular, in the fourth culture, the GTV of the Stink Home South China increased by 51% year-old year.
But was the 25% lower than that in the first quarter of 2021. The BFB of the new home sales grow by 1.4% year-wield. The fourth year-wield increased in past six quarters.
While the TQV was by 7% year-weir, the second, the high-rise year-weir goes into history. Price wise, the two home price and the desire 17 consecutive quotas of the cloud and the girl by only 0.4% quarter of quotas.
with the year-over-year decline narrowing to 5.5%. New home prices increased by 0.7% sequentially in the first quarter, with year-over-year difference narrowing to 1.4%. Home upgrade demand was the main contributor to the market.
for the recent round recovery and future market growth. This demand comes from the people that already own at least one home and are looking for the upgrade.
The proportion of the homography amount exceeded 70% of the false cause of this year.
of 7% of the points from 2019.
Notably, over 45% of this demand was for the first time upgrades.
The implication of this increased demand on the market as follows. Number one, client with home upgrade demand are bound to enter the e-sinkhole market first. As most of new home channel sales customers come from the e-sinkhole market.
New home recovery is perceived on the rally of the visiting home market. Number two is for clients, especially for just who, how compact rate the amount is rated. They are usually time sensitive.
as they are facing the life-changing events, such as getting married or having children or for the children's education, such that the month can now be met by new homes, which are mostly for it.
Events such as get married or have children, for the children's education as such, that deounand can now be met a new home which are mostly for give very, very healthy.
This is a policy for the single market and moving ready new homes. The 30th Intermarket, done by a home upgrade demand, supply and the demand in the market changes simultaneously.
Currently, most of the home upgrades naturally leads to more decision-homes listing without putting downwards pressure on the housing prices.
cities with higher increase in home listing also have larger transaction volume and higher prices. For example, like an angel.
The first quarter, home listing in Shenzhen, Hangzhou, Changsha, Wuxi and Chengdu rose by over 20% quarter over quarter. Under that transaction volume, all grow at the higher rate with a steady price increase. The lower force due to a longer decision making process and the higher transaction complexity.
Home upgrades transaction have the higher requirements for the professional and accounting housing services, which will promote industrial upgrades.
So in the most recent round of market recovery, the income market significantly outperformed.
the most recent round of market recovery. There is a small market that's significantly out of form. To the new home market.
The structural support of the home upgrade in mind and delivery issue of the new home both made home buyers more inclined to purchase existing homes. As consequence of this, the new home market recovered in January , already.
The heads of the Redding is a new home subscription in February . As new home transaction in various regions, also accounting for a writing share of the total housing transaction up from 32% in 2020 to 38% in the first quarter of this year.
The housing market recovery of the second tier cities was more pronounced. In the first quarter, GTV of the spin home sales in the second tier cities on our platform increased by 120% year over year, far higher than 40% and 105% in the first tier and third tier cities.
respectively.
The greater rebound in the second year of cities is attributable to a lower-based in 2022. By their local investors, structure and infrastructure.
stronger population appeal, and more relaxed mortgage and home purchase restrictions.
and the more relaxed, the more engaged, and the home-protected restrictions. Get the new home market.
In terms of marginal cells recovering in the first quarter, high quality private developers have regained some of their own suicide for the land auction in core cities.
The proportion of land acquired by the private developers in terms of value recovered from 70% in 2018 to 32% in the first cause of this year.
and the one option premium rebounded to 3.2%. Regarding your second pricing, we will as you say as a market fund generate you may.
We not only need prevent the flatness to the difficulties, but also prevent ourselves from closing our eyes through any improving data right in front of us due to them.
Thanks, Mason. Last we missed the opportunity of the market.
It is true since March the market has indeed experienced a certain degree of adjustment.
But we need to remain calm during just significant multiple opportunities.
and the refrain from being already enriched during market corrections.
and the refraining from the beam already damaged during the marking corrections.
Partly return to the monomacy of the release of the pandemic mound.
It also reflects the intensification of games and the bargaining between the homeowners and the buyers.
reflects the intensification of gains and the bargaining between the homeowners and buyers. We just slowed down the transaction pace.
The market rebounding before the course of quickly increased the home virus expectation for the higher housing prices which are well-high-dovement market economy growth and the home virus is bad income improvement.
The disparity in price expectations combined with the more listing in the market from relatively new homes intended for the home upgrades reinforce the bad and the false between the homeowners and the buyers. Slowing down the transition pace.
Nevertheless, we believe the current multi-adjustment is within the range of normal seasonal adjustment.
The transaction volume of the judgment remains at a grumpy very higher level.
In April , the existing and new home subscriptions still grow by over 40% year over year. Meanwhile, some markets stabilized beginning in May.
Therefore, we are still in a stage of a moderate recovery. We believe the future market will be generally stable, but it will take more time to determine the certainty around the pace and the magnitude of this.
or also magnate it ree
A continuous policy environment includes housing price expectations and the recovery of the rest and income expectations, as well as progress on the timely delivery of the pre-sold homes where all provide support for the continuous market improvement down the road.
On the policy front, a series of support policies that began at the end of 2021 have already been the recovery of the housing market in the first quarter, which acts as the anchor of the China macro economy.
development. Further policy relaxations with room for improvement and deepening will offer a further economic recovery. For more information visit www.fema.gov
The easing policy have recently survived to the first-tier cities and core region of the second-tier cities. Since March, cities and the district of Shenzhen, Guangzhou, and Beijing have relaxed their policies. And the strong second-tier cities like Hefei have narrowed the scope of purchase restrictions. Talking to the easing policy in the first-tier cities.
increasingly, related cities in the second year of cities and the third year cities well open up the home upgrade transaction channels to buy the fulfilled home upgrade amounts for the lives of the market confidence
Under the residents, the housing participation needs to continuously improve. According to survey data from the Baker Research Institute.
In the first quarter, the share of the respondents is by the housing price to rise increase by 9% points, quarter over quarter, which may provide support to subsequent market recovery.
And the rest of the income expectation need to improve as well. This cannot be realized immediately after policy are relaxed. It will take more time and patience.
The central bank's first quarter data already shows improvements in resident employment and income expectations.
and also for the delivery issue of pre-sold new homes, and developers' demand for continue to exert pressure on the recovery of the new home market. But we did notice that delivery of pre-sold houses have been improved this year.
I advise this factor to continue to improve. The market is the moderate for current momentum will be sustained.
Going forward, the in-home market will continue to outperform in the new home market, particularly in the first and the strong second-tier cities.
This is because cities have greater room for the policy implementation and higher a portion of East and? homes.
Gradually, we meet in a new home supply and the human tree. I join as well as a stronger attraction for the population. Thank you, Harry.
Thank you, Benjamin. Thank you. And our next question today comes from Eddie Wong with Morgan Stanley . Please go ahead. Thank you, Benjamin, for taking my question, and congratulations on the very great results.
So my question is that Baker has significantly outperformed the market across different business lines in the first quarter. Could you please share how the company achieved this very strong results and performance and how should we think about your performance relative to the overall market going forward? Thank you.
Thank you, Eddie. In the first quarter, our economy is significantly outperformed the market across all of our business. Our GTV of the home sales increased by 78% year-over-year in the first quarter compared to the market growth of 51%.
And our market penetration rate increased by 6.6% code overcoded. And our TTV for new home sales increased by 44% year by year. Compared with the market of the 7% increase. And our penetration rate increased by 1% code overcoded. First layer, we need to emphasize this.
of existing and the new home increased by 6% and 2% respectively.
In the third quarter, as the market has normalized, our market gain has also returned to 1% increase quarter over quarter. Meanwhile, the difference in the sales recognition may also be one of the reasons why our data significantly exceeds the market.
The existing home market data is based on the online restrictions when transactions are closed, while our data is based on the country signing, which leads to the online closing date by around half a month to one month.
As coding of our factors, our first-quarter performance also demonstrates our strong ability to capture the market opportunities during the recovery cycle. Firstly, we support and retain the high quality service providers during the market downturn.
which has enabled us to raise the benefits of the market recovery. Our view on the future market is that those who can attract existing and high quality service providers will be the ultimate winner.
In the fourth quarter, we took advantage of the recruiting season and the access of many other players in the industry to grow our coverage of its in-stores and agents. As a consequence of this, we added the five and six consecutive quarters of decline in the number of stores and agents respectively.
Our number of active stalls increased by around 6% quarter of a quarter to over 39,600. And the number of our active agents increased by as much as 18% quarter of a quarter. Then we raised the number of active sellers a concept established
number of agencies of 410,000. Secondly, our service provider in the open layout during the March dungeon. They continue to improve their professional skills and the community services during the pandemic.
which earns them the long-term trust of the current and potential customers.
As the market recovers, those better-known professionals become customers' go-to's. In two years period, opportunity 1 to 2022.
4,600 store owners complete courses in our big Huacho Academy.
where agents on our platform completed over 24 million hours of professional training through various online and offline courses.
Investments in enhancing the capability and accelerating the growth of both agents and store owners will use benefits to the transcendent multi-cycle.
We also iterate and refine our business operations strategy. Before 2020, we focused more on growing our number of stores and agents. Beginning this year, we will limit number of new store and agents.
Leverage our analysis of the different businesses.
We will only allow the new addition in the saturated areas.
Meanwhile, we will identify the problem in different areas and operate in a traffic manner to better support and empower store owners and their agents. Our capabilities in the home market enable us to succeed in the new home market.
More than 50% of our new home customers come from the e-
of our new home customers come from the in-home market. Our proficiency in the in-home sales support our ability to better fit the business opportunities. as the new home market recovers.
In cities where we hold advantage in these new homes, real-time spans are reached more significantly in the new home market. For example, in the first quarter, our new home sales market penetration in the city such as Wuhan increased by more than 5%.
We hope that one day in these new homes, we can expand our reach more significantly in the new home market. For example, in the first quarter, our new home sales market penetration in the city such as Wuhan, increased by more than 5% quote over quote.
Finally, a health ecosystem in both its new home and the new home market will help establish a virtual business cycle, naturally leading to a sustained market penetration gains. Thank you for joining our home renovation and furniture services.
The overall renovation market rebounded in the fourth quarter along with the realist market. The counter sales of the baker, home renovation and furniture services.
grow by 108% year over year on a formal basis.
In particular, referrals from our core business contribute to over 40% of total contract sales. Leading cities such as Beijing have been witnessing a continuous improvement in their single-city operational ability, with an increase in the volume of the renovation orders.
the passing of existing home transactions, setting the new records of market possibility, along with emerging cities gradually gaining momentum, contributing more to overall performance.
In summary, while our market penetration will be normalized in the short term, in the long run we will consistently expand our reach to the wilder, lessened services, which provide an unbeknownst for growth with high uncertainty.
In the long run, we will consistently respond over reached to wider resident services, which provide an ample room for growth with high uncertainty. Thank you.
Thank you. Thank you. And congratulations on the results again. Thank you.
Thank you and our next question comes from Timothy Zow with Goldman Sachs.
Our next question comes from Timothy Zao with Goldman Sachs. Hi, it's Danny Taogoz.
Thank you for taking my question and congrats on the very strong results. My question is about the efficiency improvement as you mentioned in your prepared remarks. And just wondering if management see any opportunities for further efficiency improvement after a very strong Q1 result.
and how do you plan to achieve them? And additionally, are there any specific measures that management have in their mind for this year to further improve the quality of the services to customers? Thank you.
Okay, thank you for the question. Regarding efficiency improvement, we have already mentioned some ideas in our prepared Bean professional to get us thinking about whether the
The key to focus on customer efficiency and enhance the capabilities of storage and the agents, while improving our platform system and mechanisms. We have implemented many initiatives to greatly enhance the customer experience over the past 20 years. This has helped us to win customer costs and become a top-trader.
have addressed many key points that customers face on the transaction side. As you continue to improve the industry ecosystem as well as its efficiency. As the market supply and demand gradually balance, the 10 points of owners become increasingly prominent.
Their needs have undergone changes and ability to better meet these needs and be important directions for enhancing customer adherence in the next stage. Furthermore, this year we will iterate our commitment system for housing transaction services.... enhancing the overall customer adherence by addressing...
prioritize commitments that address our customers' most relevant pinpoints and promote the high-quality management of our service commitments. Firstly, we will focus on more targeted brand-level service commitments. Secondly, we will stay faster to improve the quality and fulfillment of commitments that are common.
to success, not in customer acquisition or marketing, but in the quality of delivery, fulfilling commitments, and more important than simply making a promise. To address key pain points of our innovation services, we must have clear fulfillment standards and responsibilities.
enhance our fulfillment capabilities and tackle industry-wide challenges. This is the next breakthrough that we are talking. Meanwhile, the pinpoints for our core business customers arise more from the housing product side. For the transaction side, the key drivers for improving efficiency lies with hacking, high-performance agents to better enter more.
and provided them with a clear career path to become experts in community and housing-related services. Only in doing so could customers receive professional quality and diversified housing and related services. Our efficiency enhancement for the long term will help with tremendous efforts.
and continue to our healthy ecosystem and our competitive mechanism that was cut through and efficient competition by providing long-term high-performance practitioners with more resources and improving their income, we can retain them in the industry. These can be achieved. Thanks for listening.
through platform system, rain, refinement, adequate AC network coverage, efficient cooperation, professional training for store owners and agents, as well as by adopting the cost effective large store model. Secondly technological advancements.
such as AIGC continues to present opportunities for service providers to improve their efficiency. Exploring and effectively utilizing these products and tools will have a log, significantly efficiency for more for our service providers in our core and inversion business. This is my answer. Thank you, Joe.
Thank you. Thank you and our next question today comes from Xiaodian Zhang with CICC. Please go ahead.
This is Shadan from CICC. Thanks management for taking my questions and congrats on another strong quarter. My question is on the new home transaction services. As mentioned in the last quarter's call, they could plan to dynamically adjust the credit ranking of developers based on market conditions, which may in turn expand the addressable market.
because of content with strategic focus.
regarding the Monday conditions.
We know what to do and what not to do. This is especially true for our new home business. Last year, we established a solid foundation for safer operation and optimized business conduct of the new home transaction service industry. We have improved service capability.
for the high quality IsoE developers. And in Q1, the proportion of the new home cells has increased to nearly 46%.
Our cooperation with a larger number of ISO developers is also a validation of our ability to provide high quality surveys and our high cell-suiting efficiency.
We have transformed the industry payment mechanism to protect the receivable security of the service providers. Protests were the permission in advance.
have higher self-efficiency than those without, which is a win-win situation for all parties involved.
We have also established a safer working environment for both consumers and service providers.
This is the right choice, regardless of the market environment. In this year, the overall market is experiencing a multiple car wait.
Strategic-wise, we will maintain consistent understandability, without focusing on the short term or being overly aggressive and blindly pursue scale. We will focus on better collaboration with upstream developers and further safeguard the interest.
of all of the service providers in BECO. First, we have set minimum commission speed with our channel partners to prevent the bland pursuit of profit, which would lead to a deterioration of downstream ecosystem.
Second, we are strengthening the requirements of the reciprocal protection period, which is then our receivable requirements to ensure the equal protection of the agents and the developers. Third, the refined management of the way are strengthening the management of the new home withword Let me share a few of them previously and
to achieve the desired measurement, further empowerment, and to allocate resources more efficiently to them.
We also conduct the rating for the new home project in order to better organize and allocate our agents to accelerate the sales through of the high quality listings.
the rating for the new home project in order to better organize and allocate our agents to accelerate the sales through of the high quality listing, therefore improving the efficiency.
And fourthly, we are enhancing our efforts in ecosystem governance with more than 5,000 new home projects, including private phone number protection services.
and more than 4,000 new home projects covered by commitment from both developers and the platform to transparent operations. Overall, with our four strategic initiatives and a stable market environment, we expect our new home business will achieve more win-win situations, more electricity, and more dynamic growth in this year. Thank you.
Thank you. We're approaching the end of the conference call. I will now turn the call over to your speaker host today, Ms. Sateen Lee, for closing remarks.
Thank you once again for joining us today. If you have any further questions, please feel free to contact the Bay Coast Investor Relations team through the contact information provided on our website. This concludes today's call, and we look forward to speaking with you again next quarter. Thank you and goodbye.