Q2 2023 KE Holdings Inc Earnings Call

Speaker 1: Hello, ladies and gentlemen. Thank you for standing by for K.E. Holding, Inc.'s second quarter 2023 earnings conference call. At this time, all participants are in listen-only mode.

Hello, Ladies and gentlemen, thank you for standing by for <unk> Holdings, Inc. Second quarter 2020, you see earnings conference call.

At this time, all participants are in listen only mode.

Today's conference call is being recorded I would now.

Speaker 1: I will now turn the call over to your host, Ms. Sze Ting Lee, IR Director of the company.

I'll turn the call over to your house messaging Li IR director of the company. Please go ahead sitting.

Speaker 2: Thank you operator. Good evening and good morning everyone. Welcome to KE Holdings or Baker's second quarter 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on our company's IR website, elansus.ke.com.

Thank you operator.

Good evening and good morning, everyone will come to pay your holdings or they cause second quarter 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on our Companys IR website investors <unk> com.

Speaker 2: On today's call we have Mr. Stanley Peng, our Co-Founder, Chairman and Chief Executive Officer and Mr. Tao Hsu, our Executive Director and Chief Financial Officer.

This call we have some research jelly Po, our co founder Chairman and Chief Executive Officer, and Mr. Tao, Our executive director and Chief Financial Officer, Mr. <unk> will provide an overview of our strategies and business development and Mr. Hu will provide additional details on the company's financial results.

Speaker 2: Mr. Peng will provide an overview of our strategies and business development, and Mr. Xu will provide additional details on the company's financial results. Before we continue, I refer you to our safe harbor statement in our earnings press release. Please apply to these calls as we will make forward-looking statements.

Before we continue I refer you to our Safe Harbor statement in our earnings press release.

Please apply to these calls as we will make forward looking statements. Please also note that because 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.

Speaker 2: Please also note that Baker's earnings press release and this conference call include discussions on 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. Lastly, unless otherwise stated, all figures mentioned during this conference call are in R&D.

Of the unaudited non-GAAP measures to comparable GAAP measures lastly, unless otherwise stated all figures mentioned during this conference call are in RMB, We got I will now turn the call over to our chairman and CEO Mr. Sandeep.

Speaker 2: With that, I will now turn the call over to our Chairman and CEO , Mr. Stanley Teng. Please go ahead, Stanley.

Please go ahead, sir thank.

Thank you Cindy.

Speaker 3: Hello, everyone. Thank you for joining us for the second quarter of 2023. So it is called.

Hello, everyone.

Joining the second quarter <unk> conference call.

Speaker 3: In the first half of a year, our performance improves significantly compared with the sample rates last year.

In the first half full year performance improves.

Significantly compared with the same period last year.

Speaker 3: With 43% year on year growth of our total GTV and 51% year on year growth of our total revenue.

This 43% year on year gross total of GBP, 61% year on year gross total value.

Speaker 3: Although the housing market experienced a surge and subsequent adjustment on the quality basis...

Although the housing market there is a search and a subsequent adjustment.

Passes.

Speaker 3: compared to the same period last year, China's real estate and residential market as a whole speaks to the sequ finale.

<unk> centre with last year.

On us real estate.

Initial market as a whole still demonstrating recovery either.

Speaker 3: In addition, during the market correction, we successfully retained service providers, refactored, reduced costs, and raised our efficiency.

Sure.

We're in the market with Kashi, we successfully reached.

Service providers.

<unk> reduced costs and raise our efficiencies.

Speaker 3: All while Rhapsody is pending, our emerging business...

Oh, Wow Rhapsody is pending our emerging businesses.

This combination of initiatives has enabled us to customize more essentially on the market with bone and outperformed the market.

In the first half of this year.

Speaker 3: For our primary business or home transaction sources, we continue to attend our BCN, optimize ecosystem and refine platform operations while exploring grassroots in Lientia. This all prepared organic growth.

Commerce business some conjunction sources they continue to the panel.

<unk> how.

How would you mind ecosystem and refine pencil them operations while exploring.

Pouring grassroots you Didnt jump this all propel.

Gross.

Speaker 3: the capabilities of our solution writers have also attended.

The capabilities of our solution providers. How also has turned it on.

Unless you're in for Nishu cirrhosis Hopkins Raptor growth momentum.

Speaker 3: we constructed the industry companion mechanisms to have the goal.

We constructed the industrial comparative mechanisms tactical.

Speaker 3: The good get better and established capabilities in customer acquisition, conversion, project delivery data products.

It got better as it had been kind of a bit of use in customer acquisition Congress conversion.

<unk> delivery theater.

Heard that spreadsheet and others. This has lead to grassroots users quantity this gap.

Speaker 3: This has led to broad rules in our service quality and scale, as well as the economic performance of our home innovation and information services business.

As the economic performance on our homeland in relation to that Felicia So some businesses.

Speaker 3: while total contract sales in the first half of the year reached 6 billion RMB and total revenue reached 4 billion RMB.

While the total contract sales in the first half of the year rich six bidding, beating R&D and total revenue, which won't be the RMB.

Speaker 3: Going forward, we expect to replicate our success in leading cities to more areas and gradually establish a virtual cycle across the board.

Please slower lease pact to replicate our success, leading cities to more areas and gradually embellish a virtuous cycle.

Cost per block.

Speaker 3: Our rental property management services business has also achieved meaningful development in the second quarter.

Our rental property management services business has also achieved meaningful developments in the second quarter.

Speaker 3: scale of our carefree ramps improve significantly to reach 120,000 units under management and occupancy rate reaching 94.5%.

The scale of the carefree rents improved significantly to rich.

120000 units.

<unk> under management and occupancy rates, which.

94, 5%.

Speaker 3: Today's house industry has reached an inflection point in the course of its development. The traditional golden edge of real estate was accompanied by the famous

How's the industry has reached an inflection point.

Most all of these developments the Phoenician, let's go to ACH or real estate was a comp.

Our companies.

Speaker 3: by 30 years of reform and opening up.

My city years always full and opening up.

Speaker 3: along with rapid urbanization and a substantial demographic.

Our language rapid urbanization and a substantial demographic.

Dividend.

Speaker 3: as the per capita living area increased, houses have been in short supply, leading to a one way increase in property price.

The per capita living area increased house houses, how be short supply leading to a linear increase in property prices buying a house becomes the pogo.

Speaker 3: buying a house become the core goal of many people in China. In the process, real estate has gradually...

People in China, either process real estate is gradually.

Speaker 3: straight away from its initial function to provide residential homes. Instead, it has been

Straight away from these initial function to providing to provide substantial sums is that strictly.

Strictly on the euro.

Investment assets.

Speculative tool.

However.

Speaker 3: However, all that deviation from their intended hot costs will return to their original track. And today the industry is reverting to its core value proposition. The essential function of real estate is once again serving people with quality living. And the true golden edge of focusing on people and living has just begun.

Oh that's.

The nation from the intended hog cost returned to their original China and today. The industry is reverting to its core value proposition the essential function, how real estate is blessed again, seven people with quality of living.

The true go to Ash a.

Focusing on people and a living has just begun.

Speaker 3: And this shift, customer rising demand for better living is far from being fulfilled. In other words, there is a central challenge in today's housing market and the foreseeable future.

This shifts customary rising demand for better living is five from B to C U E.

In other words there is.

Is a central challenge in today's housing market.

So seeable future.

Speaker 3: all of the disparity between customer demand for more joyful living and inadequate supply or quality services and products.

All of the disparity between customer demand for module for living and inadequate supply of quality services and the progress.

Speaker 3: This contradiction motivates us to climb our next mountain and introduces substantial growth opportunities in our future.

This contradiction motivates us to cotton, our next month end and introduces substitutional crews out maturities in our future.

Our solution to resolve the supply demand imbalances, including cruise two essential components.

Speaker 3: Our solution to resolve the supply and demand imbalances includes two essential components.

Speaker 3: Providing joyful living for customers in China. In Chinese, we call it Anji and facilitating fulfilling careers for service providers, which we call Le Yi in Chinese. This is also a continuation of our mission of admirable services Joyful Living

Providing joyful and youthful customers in China, Chinese we call it Angie.

Facilitate facilitating fulfill two fewer and careers for citizen Vermonters, which we call <unk> and Chinese. This also a continuation of our mission and my voice services join for living.

Speaker 3: Specifically, we have upgraded our corporate strategy to one body three weeks accompanied by our organization alignment.

This is a duty we have upgraded them.

Hep registration to lend body suit please.

Our companies by Oh, I'm going on there.

Thanks.

Speaker 3: This evolution represents the strategic intention and the dipping of a one body to win this model with a focus on our customers and frontline value creation.

This evolution represents the strategically the passion and the deepening of our one body two latest model with a focus on our customers and our frontline value creation.

Speaker 3: We have established four business lines, housing transactions...

We have we have established four business nice housing transaction services hungry and especially on the finishing of citizens homes rental services and our newest addition.

Speaker 3: Home renovation and furnishing services, home rental services, and our newest addition, pay house, where we are engaging new home supply side upgrades. Each of this chatter business.

Yeah, well, we are engaging new home supply site upgrades.

Each of this tender businesses.

Speaker 3: cultures to customer residential aspirations and service providers diverse career.

Cultures to customers, we still show us broader issues and service providers.

Over his career eschar ratios.

Speaker 3: in the process of providing a joyful living and beautiful customers.

In the process of providing joy for living and youthful customers superior, whose cirrhosis will see great benefits.

Speaker 3: The computer vehicles and services will see great benefits.

Wednesday.

Speaker 3: relate to the property itself or the provision of a wide range of residential necessities such as renting.

Related to the property itself on the provision of a wide range of risks.

Residential.

Necessities, such as renting purchases.

I'm trying to shoot home renovation and are finishing and solo next I will go into more detail about how we define good products and services. So a joy for living within the context of all of our wind bodies release strategy.

Speaker 3: and trust the ship, home renovation and the furnishing, and so on. Next, I will go into more detail about how we define good products and services for joyful living within the context of our webinar history win strategy.

Speaker 3: Regarding our one body home transaction service of businesses its value will be more of a viewers of the market No, I add

Regarding our body of home transaction. So it was a businesses is value and there'll be more of a as yours after market I'm at 90 days.

Speaker 3: in operating more sustainable and healthier development.

Aberdeen Nuance is tenable and he has heater development well.

Speaker 3: When identified, the right property becomes more challenging and emotional for customers.

Why don't you find it probably becomes more challenging and emotional for our customers.

Speaker 3: Service providers must establish trust, emphasizing the importance of building emotional connections around this relationship.

So it's a rather small.

You shouldn't be ish cost I'm assigning that you've put his old dirty emotional connections.

This relationships.

Speaker 3: and fostering this type of customer relationships which allow service providers the opportunity to provide more value-added services and change in value for communities.

So it's really a this type of customer relationships, which allow switch providers maturity to provide more value added services and it turns into value for communities.

Speaker 3: around joy for living. It will also enable consumers to redefine how social providers view and unleash the huge potential of our ACM.

I will enjoy for a living.

Also he never consumers to redefine how social providers of you.

Unleash the huge potential of our ACN.

Speaker 3: We also have significant room to further enhance customer experience with our home transaction services. On one side, the bargaining power of home buyers continues to rise. On the other side, homeowners are replacing intense demand for quick property sales and exchange. This will Simulate loads of

We also have some easing in June .

To further enhance customer experience with our home transaction services and website, the Buck and empower our homebuyers continue to rise on the hottest summer on Assai homeowners I was crazy intense demand for property sales and he can change isn't really can be used.

It's funny.

Speaker 3: reshape the service dynamics of the brokerage industry and direct the way to better consumer experience in the next phase of industry evolution. Meanwhile, we see room for further value creation in deeper integration with communities and in the evolution of consumer.

The shaft, the surface dynamics or the brokerage industry and direct to the way to better consumer you're always in a nice pace of industrial evolution means.

Meanwhile, we see room for further value creation and deeper integration with communities and a yield of your voice.

The evolution of consumers' aesthetics.

Speaker 3: All these opportunities are allowing our whole business to become a key force in joyful living. Next, we come to our first-week business, Home Renovation and Foundation.

All of this our maturities.

I'm, Paul business to become a key force enjoy for Lilly.

Next we come to a first lien business home renovation initiatives.

Speaker 3: at a time when housing aberracies is becoming increasingly important.

At a time when housing Joris, he's is becoming increasingly important.

Speaker 3: consumers have high expectations for housing improvement.

Consumers, how high penetration so housing improvements.

Speaker 3: As such, home renovation and furnishes are often top of mind when consumers require a better home environment.

As such home renovate organization finishes I, often top of mind when consumers require a bit of a home.

Speaker 3: But the 10 points for this industry are very clear. To address these 10 points, we are moving away from an assembly model and toward a product-centric philosophy and focus on people.

But the pinpoint for this industry are very clear to eyeglasses pinpoints, we are moving away from any assembly model and toward a product centric philosophy and focus on people.

Speaker 3: customers should feel at ease when they undertake innovation.

She was field ftes when they're under attack.

Hughes.

Speaker 3: and we can help them through this process. This means providing one stop.

And we can have them. So it is a process.

Meats, providing one stop cirrhosis.

Speaker 3: which removes many of the complications felt by customers. We should also be able to help consumers pursue better living. For example, in addition to construction and installation, our refined capabilities facilities, smart homes, maximizing the efficiency of a home's living area and offering flow designs that complement customers preference.

Which removes many of the complications felt by customers. We should also be able to happen.

Consumers.

Sure better living for example, in addition to construction and these stored issue, although refine capabilities facilities smart homes maximizing the efficiency of our homes living area and offering fluid designs and accomplishments.

Customers' preferences to achieve this we will continually push industry transformation, so decided visualization and Comcast working process reconstruction. So you have customer experience and increase service providers efficiencies.

Speaker 3: To achieve this, we will continually push industry transformation through digitalization and complex working process reconstruction to enhance customer experience and increase service providers efficiency.

Speaker 3: Our second wing is big, the rental services. Today, renting is gradually becoming a way of life.

Secondly, when you speak for eventual services today renting is gradually become economy, a way of life. We are with house houses for Lilly Lilly muscle speculation.

Speaker 3: with houses are for living, living in, not for speculation.

Speaker 3: We're shaping the market dynamics that have previously Bot

We're shaping the market dynamics that had previously further property sales over rentals.

Speaker 3: the resonances between growing rental supply and demand.

The reason it is is between green rental supply and demand.

Speaker 3: represents a historical opportunity for us to expand our rental services. On the supply side, a substantial portion of Chinese assets is tied to real estate, making preserving a reasonably appreciating property value crucial to families.

At present.

Since our historical maturity philosophies, and our rental services on the supply side.

<unk> portion of the Chinese assets is tied to real estate, making preserving and they're a reasonable reasonably a pre appreciating property value crucial to families.

Speaker 3: More homeowners want their properties to be better cared for, and the rental property management services can be streamlined and more convenient. On the demand side, for tenants, we aspire to comprehensively elevate their property.

Muslim owners, one of their properties to be better.

Careful and rental property management services can be streamlined and more convenient.

On the demand side.

The tenants, we aspire to comprehensively.

Anyway.

Speaker 3: and rental and build it through customer-centric products and services.

The rental darice through customer centric products and services.

Speaker 3: transforming the concept of renting a house from a transitional

Transforming the concept of renting a house from our trend transitional.

Speaker 3: on promise to a peering option. In turn, this can foster a balanced approach between renting and purchasing.

Promise two are purely a function. He was in turn this consult foster a balanced approach between renting and purchasing.

Speaker 3: We are pleased that our carefree reps have made initial strides in the rental space. We will keep looking for ways to use our technological platform and operational adventures to create value for the marketplace and society.

We are pleased that our peer free rents has met our initial strides in in the rental space and we will keep looking for ways to use on the technological platform and a fresh new adventures to create value for the market Chinese Society.

Speaker 3: Moving to our newly added shirt wing.

Moving to our newly added as sort of we basically yeah.

Speaker 3: The traditional model has been driven by first home buying demand, increased leverage and attempt to rapidly acquire a house and enjoy asset appreciation. These driving forces are becoming outdated in the market with stabilizing housing prices.

The traditional model has been driven by first home buying demand increased leverage and attempts to wrapping it up to a cleaner acquire a house and they enjoy asset appreciation appreciation.

This try these sources I'd be coming out in the market with stabilizing how housing prices.

Speaker 3: A new consumer trend is checking shop, then prioritize quality and experience.

New consumer trends you check your shot.

<unk> quality and they get the orbitz as ever.

Speaker 3: As a result, there is increasing evidence demand for high quality housing products.

Results there is increasing evidence.

Known for high quality housing housing products.

Speaker 3: Going forward, market differentiation might come from the difference in the quality of houses being built.

For market differentiation might come from the difference in the quality of how houses built.

Speaker 3: This translates to a call for supply-side improvements in the new home market. It's our responsibility and opportunity to hit this call. We will establish capabilities and explore innovative offerings in order to define quality houses based on customer demand.

This translates to a call for supply side improvements in the new home market is our responsibility and opportunity to Hey, Hey, This call.

Where do these type of dish capabilities.

Operator: Hello ladies and gentlemen, thank you for standing by for KE Holding Inc's second quarter of 2023 earnings conference call. At this time, all participants are in listen only mode. Today's conference call is being recorded.

Floor <unk>.

<unk> offers in order to define quality houses based on customer demand.

Speaker 3: build good products and services, and enable value chain partners to promote the housing industry supply-side upgrade.

You have good products and services and enable value chain customers to promote housing industrial supply side upgrades.

Siting Li: I would now turn the call over to your host, Missy Ting Li, IR Director of the company. Please go ahead, Siting. Thank you, operator. Good evening and good morning everyone.

Speaker 3: Moving to how we can make service providers have a full, fulfilling career. Le ye. La recidensia o Places does bring more Internet bar and says more about the people we are looking for which are both living ones.

Moving to how we can make.

Service providers have a full fulfilling career.

Siting Li: Welcome to KE Holdings or the second 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 our company's IR website, inletters.ke.com. On to this 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 development and Mr. Xu will provide additional details on the company's financial results.

The residential services center operator.

Speaker 3: operates and resolves around agents and stores. Service providers are our core assets, investing in their goods and guiding their self-improvement results in a steady increase in our corporate atmosphere.

Our price and our resolve around the edges and our stores service providers on our coal assets in West team. There goes on regarding any of the ourself improvement results in a steady increase in our corporate assets.

Speaker 3: As real estate assumes is a fundamental purpose of providing a space to live, stores and agents will also shift from skill expansion to optimize efficiency. In this regard, several trends come into view.

It's really a statement.

It seems easy fundamental purpose of providing a space to leave stores.

Agents will also shifts from skill is pension to Arlington My efficiency in this regard several China coming into view.

Siting Li: Before we continue, I refer you to our third cover statement in our earnings press release. Please apply to this call as we will make forward-looking statements. Please also know that fake earnings press release and this conference call include discussions on unoutited gap financial information as well as unobited non-guet financial measures. Please refer to the company's press release, which contains a reconciliation of the unoutited non-guet measures to comparable gap measures. Lastly, unless otherwise stated, our few years mentioned during this conference call are in R&E.

Firstly Judy.

Speaker 3: Building sustainable relationships based on professionalism and integrity is increasingly crucial for real estate agents.

Judy This is tenable relationship based on professionalism and integrity is an increasingly crucial for example for real estate agents.

Speaker 3: As properties return to the most fundamental with substantial function, the dynamic between customers and agents change from information base to cost base.

As properties, we tend to have the most of them under mentally essential function.

Dynamic between customers and edges, China from information base to trough debased.

Speaker 3: A knowledgeable and reliable agent becomes more valuable when market transactions slow down and it becomes harder to identify the right property. As such, agents' role and skills must evolve from transaction facilitators to long-lasting community housing sources after the blockchain run.

Knowledgeable reliable agent becomes more valuable.

Transaction slowed down and it becomes harder to identify the right property is such I just drove on Skus must be evolving from transaction for facilitators to long lasting community housing experts, we see many areas of this dynamic we are we cannot for example.

Stanley Peng: With that, I will now turn the call over to our chairman and CEO, Mr. Stanley Peng. Please go ahead, ma'am. Thank you, Mr. Xu. Hello, everyone. Thank you for joining me for the second quarter of 2023 audience conference call. In the first half of the year, our performance improves significantly compared with the same coverage last year. With 43% year-on-year growth of our total GDP and 51% year-on-year growth of our total revenue.

Speaker 3: We see many areas of this dynamic where we can have. For example, the operational efficiency of mid-level agents has the potential to be significantly improved. Additionally, there is great room for development in terms of community engagement. Our goal is to support our agent to become the bridges that connect community with better living conditions in the future.

Then I'll fractionally efficiency.

Mid level agents has the potential to be significantly improved.

Really there is great room for development in terms of community engagements.

Goal is to support our hedging to become the bridges.

<unk> communities is better leasing conditions in the future.

Stanley Peng: Although the housing market violates our search and our subsequent adjustment on our positive basis, compared to the same period last year, China's real estate and residential market as a whole still demonstrating recovery. In addition, during the market correction, we successfully retain service providers, effectively reduced costs, and erased our efficiencies. All while rapidly expanding our emerging businesses, this combination of initiatives has enabled us to recover more effectively on the market rebound and outperform the market.

Second.

Speaker 3: The trend toward a large store model is unquestionable.

The trend towards large store model is it.

Questionable.

Speaker 3: As more commission might be directed to agents who provide value to customers directly, store owners' profitability might decrease. As such, bigger stores with higher revenue potential are crucial to improving efficiency.

As more commission might be directed to agents, who will provide value with customers directly.

And there's profitability might decrease as such speaker stores with higher revenue potential are crucial to improving efficiency.

Speaker 3: and realizing greater returns for both stores owners and agents.

Realizing graduate returns for both doors Windows and Andrews.

Speaker 3: to this end, we have persistently pursued a large store strategy since 2022. By the end of June this year, we have effectively restructured for some 500 stores.

And we have consistently pursue larger store strategies is 2022 by the end of June this year, we have effete factually restructured over one of Osama <unk>.

Stanley Peng: In the first half of this year, for our primary business or home transaction services, we continue to depend on ICPC and optimize the ecosystem and refine platform operations, while exploring grassroots union jobs, this all prepared our organic growth. The capabilities of our social writers have also extended. Our home renovation and the furnishing of services have gained rapid growth movement. We constructed the industrial compatibility of the transism to have the good, the good get better and is tech-based capabilities in customer acquisition, conversion, project delivery data, products, supply chain and others.

Hunter stores started on our platform achieved our efficiency improve.

Speaker 3: Still, our platform achieved an average efficiency improve of 80...

Oh, a T a percent.

Speaker 3: year-over-year in the first half of this year. Certainly the light store model fosters a new relationship between our store owners and agents.

Year over year in the first half of this year.

The life store model.

<unk>, a new relationship between nurse and edges.

Speaker 3: That goes beyond mere employee relationships revolving into a partnership or collaboration. Store owners must treat agents as both employees under management and clients who require support.

Then it goes beyond a mere employer employee relationship evolving into a partnership or collaboration stoma nurse must treat engines I suppose employees under management and our clients who require support.

Comment and services.

Speaker 3: On our end, we need to stimulate creative thinking amongst the owners in order to benefit from the new trend.

On our end, we need to stimulate create crowd. He was thinking I'm on skilled nursing you ought to have benefited from the neurocrine.

Stanley Peng: This has led to grassroots, you know, social quality and scale, as well as the economic performance of our home renovation and the furnishing services businesses. While total contract sells in the first half of the year, rich 6 billion, billion R&B, and total revenue rich 4 billion R&B, going forward, we expect to replicate our success in leading cities to more areas and gradually tech-based, a virtual cycle across the board. Our rental property management services business has also achieved meaningful debt development in the second quarter. The scale of our care-free rent improves and needs to continue to reach $120,000 units on the management and occupancy rate, which 94.5%.

Speaker 3: With these changes, we hope not only to make timely adjustments but also to become a trendsetter. We have started by tabulating entire rankings infrastructure for stores and engines as well as standards for both stores and individuals.

With this changes we hope, although we need to have met a timely adjustment, but also to become.

Action Center, we have started our champion issue entire entire rankings infrastructure for stores and engines.

Standouts for those stores and the new features.

Speaker 3: These are the first steps to enhance the management and operational capabilities of the platform and store owners, helping to cultivate a robust agent talent pool. Our continuous efforts encompass seminars on values, rules, and the protocol-based management, training and empowerment programs, certification systems, and the establishing a more rational payment distribution structure.

These are the first steps to enhance our management and operational capabilities of the platform and install nurse flipping to calculate and robust.

Talent pool.

And our first.

Encompass seminars on various juice and the political basta management's trinny and impairments programs saved the crushing systems.

Ambition Margaret I shouldn't.

More irrational payments distribution structure.

Stanley Peng: Today's house industry has reached an inflection point in the course of its development. The traditional golden edge of real estate was a company, by 30 years of reform and opening up, along with rapid urbanization and a substantial demographic, and the poor capital living area increased. House houses have been in short supply leading to a one-way increase in property prices. Buying a house became the core goal of many people in China. In the process, real estate has gradually strayed away from its initial function to provide with their initial cost.

So with this initiatives, we can enhance the efficiency of a storm nurse committed to taking good care of them for service providers and necessity test or as a provider of transact transformation from taking a job to entering your professional and he gave you guys here.

Speaker 3: Through these initiatives, we can enhance the efficiency of store owners committed to taking good care of service providers and facilitate service providers' transformation from taking a job to entering a professional and engaging in fulfilling careers.

Fulfilling careers.

To close.

Speaker 3: I'm both energized and awed by the tremendous possibilities and the growing pain I have.

Buzzy energized.

All under tremendous possibilities and a growing Tam right.

Speaker 3: and house industry transformers from high growth to a focus on quality and experience. We will continue to solidify our core competence.

How's the industrial Transformers from high grows to a focus on quality and experience we will continue to solidify our core competencies.

Speaker 3: At the same time, we will have the courage to reform the BRAC's new route.

At the same time.

We will have the courage to go slow, Nebraska, new rock.

Speaker 3: all together creating new values while undertaking historical mission and social responsibility.

Altogether, creating new values lie on the checking historical mission and our social responsibilities.

Stanley Peng: Instead, it has taken on the dual role of an investment asset and speculative tool. However, all that variation from their intended hot pass will return to their original track. And today, the industry is reverted to its core value proposition. The essential function of real estate is once again serving people with quality living, the true golden edge of focusing on people and the living has just begun. And this shift, customer rising demand for better living is five from being fulfilled.

Speaker 3: We are in the foothills of the next mountain on our quest, and we look forward to an exciting roadmap ahead.

We are in the in the <unk>.

You know for the heels of the next months.

Oh, Gosh, I don't know and we look forward to the exciting roadmap.

Speaker 3: Thank you everyone. I want to invite our CFO , Mr. Xu Tao, to present the financial highlights for the second quarter.

Thank you everyone for your blood sample.

To present.

Presenting the financial highlights for the second quarter.

[noise] Echo Sunday and thank all mindful of juniors before going into the details of all of our second quarter financial results I would like to provide a brief update on the housing market is always the first half of this year.

Speaker 4: Thank you Stanley and thank you everyone for joining us. Before going into the details of our second course of financial results, I would like to provide a brief update on the housing market over the first half of this year.

Speaker 4: The market trends for the first half of the year are in line with the projections that were made at the beginning of this year.

The marquee transports in the first half of the unit in line with our prediction.

Stanley Peng: In other words, there is a central challenge in today's house market and the foreseeable future, all of the disparity between customer demand for more joyful living and inadequate supply of quality services and products. This contradiction motivates us to climb our next mountain and introduce substantial growth opportunities in our future. Our solution to resolve the supply and demand imbalances, including tools to essential components. This is providing joyful living for customers. In China, in Chinese, we call it Anju, and facilitating for fuel, for fueling careers for service providers, which we call Luei, in Chinese. This is also a continuation of our mission of an emergency services, joyful living.

That's the beginning of this year.

Speaker 4: Overall transaction volume gradually normalized following by the low-slide rebound filled by the pent-up demand.

Overall transaction volume gradually normalized 40 bytes up slightly bummed fueled by a pent up demand.

Speaker 4: Since the second quarter, the lingering effects of the pandemic have become more pronounced, with the pressure of household income and employment expectations.

Since the second quarter, the lingering effects of the pandemic, although it become more pronounced with the pressure on household income.

And then finally to your expectations sluggish exports.

Speaker 4: Sluggish exports and declining FDI posing challenges to the economy recovery.

Finally, you asked Dr holding tenders to the economy recovery.

Speaker 4: In the real estate market, divergent price expectation between buyers and sellers, along with the policy loosening speculations, have intensified the market weight and seep attitude, leading to a deceleration in transaction cycles.

Is the real estate market coverage and the pricing expectations between buyers and sellers along with the policy loosening speculations about intensifying some marquee to wait and see attitude.

Leading to a deceleration in transaction cycles.

Speaker 4: Meanwhile, in the high-tier cities, policy optimization targeting the unleash of the home upgrade demand have year two mature lines.

Well, he's a high tier cities policy of optimization puck pizza on the shelf the home operating month of year to materialize.

Speaker 4: maintaining obstacle to the release of the reasonable demand.

Maintaining obstacle to the release of the reasonable demand.

Speaker 4: under the various factors, the market underwent a noticeable quote-unquote adjustment in transaction volume in Q2. Meanwhile, the home market continues to grieve always the debt risks of demand.

All of the various factors.

Stanley Peng: Specifically, we have upgraded our corporate strategy to web-body through wins, accompanied by our organizational alignment. This evolution represents the strategic expansion and the deepening of our web-body towards model, with a focus on our customers and the front-line value creation. We have, we have established four business lines, housing transaction services, home renovation and furnishing services, home rental services, and our newest addition, pay halt, yeah, where we are engaging new home supply side upgrades.

Lucky win on.

Throw wage noticeable cold silviculture adjustments being transaction volume in Q2.

Meanwhile, the whole market that continues to grow you've always thought that risk so give others.

Speaker 4: All supply and demand have remained awake due to the constraints of the effective new home supply and ongoing consumer concerns about project delivery following a series of defaults based on top property development.

Oh supply and demand remains weak due to the constraints of the five.

New home supply and ongoing consumer concerns about the predictive debris falling or theories self default based on pulp pops could give out of us.

Speaker 4: However, we also noticed that the leading indicators of the home demand have been relatively resilient.

However, we also noticed that the leading indicators of the home demand hope your Investor day.

Speaker 4: For instance, the number of the home tools made in Q2 remained above the historical average in recent years, which is indicative of the continued underlying strength in overall demand.

For instance, the <unk>.

The home choose maybe in Q2 remained above the historical average University years, which as you indicated.

Stanley Peng: Each of this teller, businesses, cutters to customer residential aspirations and service providers, diverse career aspirations. In the process of providing joyful living, Anju for customers, superiors, and services, we'll see great benefits. Whether they relate to the property itself or the provision of our web-body or residential neighborhoods, such as renting, purchasing, transportation, home renovation and furnishing, and so on.

Continue with other lines to it I'm overlooking moms.

Speaker 4: In general, the overall market saw a notable year of real growth in the first half of 2020.

In general the overall market. So notable year over year growth since the first half of the year.

Speaker 4: we have always maintained a neutral monkey view, and our persistence is being proved.

We have always maintained a neutral monkey view and our persistency speeding foods.

Speaker 4: We have continuously enhanced the support for the service providers and the store owners, implemented effective cost reduction and efficiency improvement, and the fun tune of operations.

<unk> continues to you has the support or the service providers and installments.

If I could cost reduction and efficiency improvement.

One child all patients.

This mirrors, coupled with the rapid growth of our merchant business. However result in overall spending performance and have a better position to seize opportunities as the market recovery.

Speaker 4: These matters, coupled with the rapid growth of our emerging business, have resulted in our outstanding performance and have a better position to assist opportunities in market recovery to meet the situation.

Stanley Peng: Next, I will go into more detail about how we define good products and services for joyful living within the context of our web-body through wins strategy. Regarding our web-body home transaction service of businesses, its value will be more of a virus after marketer number 9s. In appalling, more sustainable and a hearseater development, where a daddy find that right property becomes more challenging and emotional for customers. Service providers must establish trust, emphasizing the importance of building emotional connections along these relationships.

Just the fluctuations.

Speaker 4: In the first half of this year, our TTV reached RMB 1.75 trillion, up 43% year-over-year. During the second quarter, our TTV amounted to RMB 780.6 billion, reflecting a 22.1% year-over-year increase.

In the first half of this year, although T. T V reached RMB 175 trillion.

Up 43% year over year.

During the second quarter, our T V amounted to RMB 786 cities.

Reflecting a 22, 1% year over year increase.

Speaker 4: Furthermore, our net revenue in Q2 increased by a faster rate at 41.4% year-over-year to reach RMB 19.5 billion, beating both high ends of our guidance under strict consensus.

Furthermore, our net revenue in Q2 increased by a faster rate of 41, 4% year over year to reach RMB 19 5 billion.

The team both high end of our guidance under the Street's consensus.

Stanley Peng: First of all, this type of customer relationships will allow service providers the opportunity to provide more better added services and attended value for communities that are growing joy for living. It will also enable consumers to redefine how social providers view and unleash the huge potential of our ACN. We also have significant room to further enhance customer experience with our home transaction services. On one side, the pocketing power of home buyers continue to rise.

Decent.

Speaker 4: Next revenue from the new home sales services have responded culture over culture for the past five quarters. Our business apart from the housing transaction service is a major part of the business.

Revenue from the new home seller services, probably spunky the cultural the culture for the past five quarters, our business apart from the housing construction services.

Speaker 4: which includes home renovation and furniture and rental services, to achieve significant on-year growth, contributing to a revenue share of over 20%.

Which equaled the home renovation functions and the rental services achieved a significant year of girls contributing to a revenue share off of over 20%.

For the first time.

Speaker 4: In Q2, our gross margin is due at 27.4% and the gap net income reached RMB 1,300 million. On a non-gap basis, our net income reached RMB 2,364 million compared with the net loss of RMB 690 million for the same period last month.

In Q2, our gross margin stood at 27, 4% on the GAAP net income your child B cells in just 300 meter at.

Stanley Peng: On the other side, homeowners are praising intense demand for key property sales and exchange. This will be in vitory reshap, the service dynamics of the brokerage industry and direct the way to better consumer experience in a mass phase of industry evolution. Meanwhile, we see room for further value creation in deeper integration with communities The evolution of consumers and aesthetics, all of these opportunities are allowing our whole business to become a key force in joyful living.

Oh, no he got basis, while net income reached RMB 2000 364 million.

With a net loss of RMB 619 million for the same period last year.

Speaker 4: By fixing segments, in Q2, its income transaction PDB increased by 16% year over year. But the market recovered to a certain extent from the lower base last year, and thus through our continued enhancement in the operation efficiency, which further supported our performance. Nevertheless, our quarter overall

By business segment in Q2, it's in home transaction Ptv increased by 16% year over year, that's a monkey recovered to a certain extent from the lower base last year and there's the wall will continually enhance means he's all breaching efficiency, which affords us the policy all the performance level.

Nevertheless, our cultural closer basis.

Speaker 4: the in-home market experienced a considerable adjustment in Q2 following the intensive release of pent-up demand, resulting a 31.3% sequential decrease in our in-home PTV.

In home markets generous, Okay Super Bowl adjustment in Q2 holdings in Tennessee, with the release of pent up demand.

Stanley Peng: Next, we come to our first-wing business, home renovation and the furnishings. At a time when housing bureau is becoming increasing important, consumers have high expectations for housing improvements. As such, home renovation and furnishings are often top of mind when consumers repire our better home environments.

All team of 51, 3% sequential decrease you all were seeing home P. T V.

Speaker 4: In particular, due to the more pronounced market sentiment adjustment in the fourth-tier cities, Renjian's sequential adjustment in its in-home DTV was notably higher than that of the connectedple of the rest of the Spectreaeus and all of their home countries were much higher

In particular due to the more pronounced the market essentially an adjustment in the first tier cities.

In just the crucial adjustment you're seeing home Ptv was notably higher than that that's all for Tonight Brian .

Speaker 4: with a relatively stable market position rate in Q2. That revenue from the in-home transaction services amounted to RMB $6.4 billion, up 15.9% year-over-year, and down 30.1% culture-over-culture.

With a relatively stable my physician rate in Q2, that's revenue from existing home transaction services.

Stanley Peng: But the pinpoint for this industry are very clear. To address these pinpoint, we are moving away from an assembly model and to all a product-centric philosophy that focuses on people. Customers should feel at ease when they undertake renovations. And we can have them so it's a process. This means providing well-stop services, which removes many of the complications felt by customers. We should also be able to have consumers pursue a better living.

Thank you to RMB six point, we'll get it.

Up 15 point I have to say year over year on the down 31% quarter over culture.

Speaker 4: While the overall new home market remains subdued, the willingness of developers to adopt external sales channels continues to increase, offering a resilient target market.

While its overall new home market remains subdued so what Denise I'll give others to adopt axon themselves trying to continue to increase.

Offering are so resilient and Kentucky markets.

Speaker 4: Building around this foundation, our new home business maintain the robust operational moment and the commencement of cell-sue rigged, hosted by our ongoing refund operations, ecosystem optimization and our commissioning the month model, which is repaired by the live per.

Building, our bounds as a foundation.

Homelessness and maintain their robust no appreciable momentum, although commenced volt sell sooner great.

Good bye all ongoing refined operations ecosystem optimization, and our commissioning amongst modal Rishi, it's a great power if I could I'd purse.

Stanley Peng: For example, in addition to construction and installation, already find capabilities, facilities, smart homes, maximizing the efficiency of our homes living area and offering flow designs and accompaniment customers' preferences. To achieve this, we will continually push industry transformation through digitalization and a complex working process reconstruction to enhance customer endurance and increased service providers' efficiencies.

Speaker 4: In Q2, new home transaction GTV on our platform increased by 32.4% year-over-year and 6.2% quarter-over-quarter. Next revenue from new home goes by 30.4% year-over-year and 3.5% quarter-over-quarter.

In Q2, new home construction T V or purple increased by 32, 4% year over year under six 2% quarter over culture, that's revenue from new home builds by 34% year over year in the three 5% quarter over quarter.

Speaker 4: total RMB 8.7 billion, of which commissions from IsoE developers, county secures 46.8% and the project with the commissioning demands contributes 53% of the total commission collected remaining at a high level.

So RMB eight 7 billion.

Bleach commissions format, so we'd give out those coaches skus 46, 8% on the per cap with the commissioning of the bumps contributes 53% of total commission flat remaining at a high level.

Stanley Peng: Our second wing is big or rental services. Today, renting is gradually becoming your way on life. With house houses are for living, living more for speculation. We're shaping the market dynamics that previously further property sales over rentals. The resonances between growing rentals supply and demand represents a historical opportunity for us to expand our rental services. On the supply side, our substantial portion of the Chinese assets is time to a real estate, making preserving and a reasonable appreciating property value crucial to families.

Speaker 4: Our home renovation and front-chain business has taken off this year with breakthroughs in both skill and efficiency, reaping the benefits of this DAFAR investment in our capability over past few years, as well as a successful integration with Chengdu.

Although home renovation a function business.

Oh this year, whereas the breakthroughs in both scale and efficiency.

The benefits open with their thoughts and investment capability over the past few years as well as the successful integration with Cindy.

Speaker 4: Starting from February , monthly contracted cells have consistently exceeded RMB1 bidding for 5 consecutive months.

Starting from February buffet construct yourselves have consistently exceeded RMB 1 billion full fine the subject you amongst others.

Speaker 4: and total concretic cells for the fourth half of this year, the switch over on the sixth sprintel.

And the total kind of car T cells, but the first half of this year.

Over RMB 6 billion.

Speaker 4: In Q2, total concurrency cells stood at RMB 3.4 billion, reflecting a year-over-year increase of 170% and a sequential increase of 28.2%.

In Q2 total contract yourselves stood at RMB, three 4 billion, reflecting a year over year increase what countries, 70% and a sequential increase of eight 2%.

Stanley Peng: More homeowners want their properties to be better care for and a rental property management services can be streamlined and more convenient. On the demand side, for tenants, we aspire to comprehensively innovate. The rental, the bill rates, through customer-centric products and services, transforming the concept of renting a house from a transitional compromise to an pureing option. In turn, this can foster a balanced approach between renting and purchasing. We are pleased that our care-free rent has many initial strides in the rental space, and we will keep looking for ways to use our technological platform and operational adventures to create a value for the marketplace and society.

Speaker 4: Our pace of random recognition accelerated in Q2, but the signal factor from the spring festival subsided and our delivery...

Our pace of remnant accretion accelerated in Q2.

In fact, their phone close to being fussy both subsets.

Subsided and our delivery capabilities improved.

Speaker 4: As such, we achieved net revenue of RMB 2.6 billion, up 157.5% year-over-year and 86.4% quarter-over-quarter.

As such we achieved net revenue of RMB, two 6 billion.

157, 5% year over year, and 86, 4% quarter over quarter.

Speaker 4: Net ground news from the first six months of this year exceeded RMB 4 billion.

Net revenues from the first six months of D. C. It exceeded RMB 4 billion.

Speaker 4: In our leading cities, such as Beijing, we have established positive operational cycles. In Beijing, our monthly contract sells the POMS RMB200 million in May and June . With the city level net margin exceeding the industry ceiling, the verified business model in Beijing provides a foundation for our rapid replication in additional cities. We will roll out this proven model in new cities. We enter.

In our D D cities, such as Beijing established policy appreciable cycles.

Our monthly contract itself. So pulse RMB 200 at Midnight you May end of June with the city level, that's Martin exceeding that you'd actually city.

So verified the visits motor in Beijing for why is the foundation for our rapidly.

Vacation you know additional cities.

We will go out with just a proven molecule Union cities, we entered it.

Stanley Peng: The traditional model has been driven by the first home buying demand, increased leverage and attainment to rapidly acquire a house and enjoy effort appreciating appreciation. This driving forces are becoming outdated in the market with stabilizing housing prices. A new consumer trend is taking shape that are prioritized quality and experience as a result. There is an increasing evidence demand for high quality housing products. Going forward, market depreciation might come from the difference in the quality of houses in build. This translates to a call for supply-side improvements in the new home market, its responsibility and opportunity to hate this call.

Speaker 4: which will gradually make higher contributions to our total revenue as we expand.

Well gradually make a higher contribution to our total revenue I said, we just bumped.

Speaker 4: In Q2, our net revenue from emerging and other services increased by 213.9% year-over-year and 36% quarter-over-quarter to reach RMB 1.7 billion.

In Q2 of next.

Revenue from your merchant services increased by 213.9% year over year on the 36% quarter over quarter to reach RMB, one 7 billion.

Stanley Peng: Whether it's head-bidage, capabilities and evidence for this law, innovative offers in order to define quality houses based on customer demand, build products and services, and enable value-chair partners to promote the housing industry supply-side upgrades.

Speaker 4: primarily driven by the growth of our eventual property management services and financial services.

Primarily driven by the girls hope all our rental property management services.

Initial services.

Speaker 4: In terms of the profitability, contribution margin for its pre-home transaction services expanded by 8.9 points year over year to 45.6% in Q2.

In terms of the public entity.

Do some marketing voice hometown different services expanded by eight nine points year over year to 45, 6% in Q2 driven.

Speaker 4: During budgets, income revenue growth will decline in fixed labor costs and a relatively stable variable cost ratio from previous years.

Driven by these home revenue growth, but declining fixed labor cost on a relatively stable cost ratio from previous years.

Speaker 4: On the sequential basis, despite the 30% quarter of quarter reduction in revenue scale, contribution margin for the in-home construction services only decreased by 3.4 points from Q1, remaining at over 45%. This signifies a sustained and robust profitability in our coal business.

On a sequential basis.

Despite the 50% quarter over quarter reduction you'd revenues good contribution margin for the new home construction services only decreased by three four points from Q1 Dominion X over 45% is a 65 to sustain robust therapy in our coal business.

Contribution margin for the new home construction services rose by three six points year over year to reach 27, 2%.

Speaker 4: Contribution margin for the new home transaction services goes by 3.6 points year over year to reach 27.2%

Speaker 4: resulted from the running function and the relatively streamlined personnel cost, making the highest point since our listing for fine perceptual courses.

Stanley Peng: Moving to how we can make service providers have a full, fulfilling career. The residential services sector operator operates and resolves around agents and stores. Service providers are our core assets, investing in their goods and guiding their self-improvement results in our steady increase in our corporate assets.

Resulting from the remnants function on the rescue base streamline personnel cost.

To highlight this point since all of these teams will find the effect you cultures.

Speaker 4: Our gross profit in Q2 registered 97.3% yield via growth to RMB 5.3 billion. As we benefited from the improved contribution margin of our major business segments, as well as a decrease in store and other costs as a proportion of revenue, our gross margin stood at 27.4% compared to 19.7% in the same period of last year.

Our gross profit in Q2.

The 97, 3% year old vehicles to RMB five 3 billion.

So we have benefited from the improved contribution margin of all of our major business segments.

Well I said because he's stolen after the cost that's a propulsion of running all the gross margin stood at 27, 4% compared to 19, 7% in the same period of last year.

Stanley Peng: As we were yesterday resumed, it's fundamental purpose of providing our space to live. Store and agents will also shift from skill and tension to optimize efficiency. In this regard, several trends come into view. Firstly, building sustainable relationship based on professionalism and integrity is increasingly crucial for real estate agents. As properties return to the most fundamental with substantial function, the dynamic between customers and agents changes from information-based to cost-based, unknowledgeable and reliable agent becomes more valuable when market transaction slow down and it becomes harder to identify the right property.

Speaker 4: The slide 3.9 points declared from Q1's heart was mainly due to the change in our revenue mix with the adjustment of Eastern Home revenue.

Slide three nine points from Q1's heart was mainly due to the change you know all of the revenue mix with the adjustment of the home revenues.

Speaker 4: In Q2, our gap operating expenses amounted to RMB 4.3 billion, among which sales and marketing expenses for RMB 649 million, increasing by 47.1% year-over-year and 27.5% quarter-over-quarter, due to the uptick in the marketing expenses for the home renovation and the furniture services on our home transaction business.

In Q2, Okay operating expenses amounted to RMB, four places where you're bidding on.

Wage south and the marketing expenses were RMB six.

649 million, increasing by 47, 1% year over year on the 27, 5% quarter over quarter due to its upbeat into marketing expenses for the home renovation that 'twenty two services on all of our home.

Inspection business.

Speaker 4: General and others with trade deal expenses were armed in 2,005 minutes, down sight today from 2,250 minutes in the same period of last year.

General and other expenses.

Stanley Peng: As such, agents' role and skills must evolve from transaction for facilitators to long-lasting community housing service experts. With the many areas of this dynamic where we can have, for example, the operational efficiency of mid-level agents has the potential to be significantly improved. Additionally, there is great room for development in terms of community engagement. Our goal is to support our agent to become the bridges that connect community with better living conditions in the future.

RMB 2000, 5 million downside do they fall in the 2000 250 million in the same period of last year well.

Speaker 4: while increasing by 29.9% from Q1.

While increasing by 29, 9% from Q1.

Speaker 4: primarily due to the lack of the better provision written back in Q2. The increase in the share face competition and the growth of emerging...

Murray do Tuesday vehicles to bad debt provisions, we can box in future.

The increase in the share based compensation I'm just girls so your merchant business.

Speaker 4: While we have a job on a rigorous provision method, over the past two years, to fully provide the null ballot after all foreseeable risk.

While we have a job or reduced provision method over past two years to fully per watt for old foreseeable risks.

Speaker 4: we have encountered unforeseen incidents of continued bad crises faced by the top property developers, with the growing number of developers fighting for the liquidation of bankruptcies.

We have you counted on both in Houston.

Continuing to fight the crisis fits by the pulp pups keeps them out of us with the accordion Unbilled kilowatt Perth fighting for the liquidation or bankruptcy.

Stanley Peng: Second, Chen, toward a large store and model, is unquestionable, as more commission might be directed to agents who will provide value with customer directly. Store owners' profitability might decrease. As such, beaker stores with higher revenue potential, are crucial to improving efficiency and realizing greater returns for both stores owners and agents. To this end, we have consistently pursued a large store strategy since 2022. By the end of June this year, we have effectively restricted over, for some of the 500 stores, store our platform achieved average efficiency improved of 80% a year over year in the first half of this year.

Speaker 4: We have further raised the dispatch loss ratio for developers, with some being elevated to 100%.

Our fourth or rate expansion.

Loss ratio will get back to us with.

Some being elevated at 200%.

Speaker 4: Especially in Q2, we set aside approximately RMB 64 million yuan as a better provision for country garden, with the provision ratio exceeding 85 percent. We hope the industry can emerge quickly from this predicament and achieve stable and healthy development.

Especially in Q2, we set us at approximately RMB 64 million U N.

The provision for country Garden.

It's a provision ratio exceeding the 85%.

The industry how are you.

Looking quickly bumped his predictions on the chip to stable and healthy environment.

Speaker 4: Research and development expenses depressed by 39% year over year to RMB 475 million, primarily due to a high cost reduction leading to a lower personnel cost under shared base compensation.

Research on gift items expenses, he puts by 13, 9% year over year to RMB 475 million, primarily due to a high carbon reduction leading to a lower personnel cost on their share based compensation.

Sequentially.

Speaker 4: R&D expenses remain relatively stable, with a slight increase of 4% from Q1. Our non-gap operating expenses for Q2 amounted to R&D $3.3 billion, down 4.6% yield.

R&D expenses as the amended rapidly stable with a slight increase of 4% from Q1.

Stanley Peng: Certainly, the large store model foosters a new relationship between our store owners and agents. There goes beyond a mirror employee relationship, revolving into a partnership or collaboration, store owners must treat agents as both employees on the management and clients who require support, empowerment and services. On our end, we need to stimulate creative thinking among store owners in order to benefit from the new trend. With this changes, we hope not only to make timely adjustments but also to become a trend center.

non-GAAP operating expenses for Q2, among pizza to RMB, three 3 billion down four 6% year over year.

In Q2.

Speaker 4: In Q2, revenue from operations amounted to RMB 1,081 million, a significant improvement from the loss from operations of RMB 1,580 million to be this imperial last year.

Revenue from operations.

Monkey to RMB thousands on a T. One many of.

A significant improvement from a loss from multiple operation of arm b cells into 518 million in the same period last year.

Speaker 4: The operating margin increased to 5.5% in Q2, from negative 11% in the same period of 2022. Thanks to our gross margin dysfunction and greater operating leverage.

The operating market you equates to a five 5% in Q2 from negative 11% in the same material between 'twenty two.

Turning to our gross margins function and greater operating leverage.

Our non-GAAP income from accretion for Q2 reached RMB 2000, 148 million compared with a non-GAAP loss from operations of RMB 619, many in the same period of last year.

Speaker 4: Our non-gap income from operations for Q2 reached RMD 2,148 million compared with the non-gap loss from operations of RMD 690 million in the same period of loss.

Stanley Peng: We have started by diminishing entire rankings in infrastructure for stores and agents, as well as standards for both stores and individuals. These are the first steps to enhance the management and operational capabilities of the platform and store owners, shaping to cultivate a robust agent talent pool. Our continuous efforts encompassed seminars on values, rules, and protocol-based management, training and empowerment programs, certification systems, and establishing a more rational payments, distribution structure.

Speaker 4: Our non-cap operating margin was 11% compared to 95% in the same period of 2020.

non-GAAP operating margin was 11.

11% compared to a net two 5% you just say material contingent to neutral.

Speaker 4: Q2Net income was RMB 1,300 million. Compare with the net loss of RMB 1,866 million in the same period of last year.

Q2, net income was RMB 300 million compared with a net loss of RMB 866, many of the same.

Period of last year.

Speaker 4: Nongak net income for Q2 reached RMB 2,364 million versus the net loss of RMB 690 million in the same period of 2D2D2.

non-GAAP net income for two treatment.

RMB 2364 meeting what's at a net loss of RMB 619 million in the same material between didn't do too.

Stanley Peng: Through these initiatives, we can enhance the efficiency of store owners committed to taking good care of service providers, and the facilities with providers transact transformation from taking a job to entering a professional and engaging in fulfilling careers to close.

Our balance sheet remains robust.

Speaker 4: As of June 30, 2023, the combined violence of cash, cash equivalents, the street cash and the shorting investments amounted to RMB 60.8 billion, or your $1.4 billion.

As of June 22 needs to read it.

Combined balance of cash cash equivalents with strict cash and short term investments amounted to RMB 15, 8 billion U S. Dollar 88 it is.

Speaker 4: We spend approximately USD 346 million or RMB 2.51 billion in the share repurchase in Q2.

We spend approximately 346 million or RMB 251 billion share repurchase in the future.

Stanley Peng: I'm both energized and awed by the tremendous core possibilities and the growing pain I had, and the housing industry transformers from high growth to a focus of quality and ignorance. We will continue to authorize our core competencies. At the same time, we will have the courage to reform the brand new realm, up together creating new values while undertaking historical mission and social responsibilities.

Speaker 4: On top of that, of total cash liquidity, which accrues calcium deposit payable, amounts to the 79.4 billion, or 680 million from Q1.

On top of that of total cash and liquidity, which at cruise passengers deposit payable amounted to RMB 79 4 billion up.

680 million from Q1.

Speaker 4: On that, operating cash outflow was on the 196 million Q2.

Oh net operating cash outflow was RMB 296 million in Q2.

Speaker 4: excluding custom deposit payable, the operating cash inflow was RMB 754 minutes.

Holding customer that you posted a payable to operating cash flow. The operating cash inflow was RMB sells into 754 minutes.

Stanley Peng: We are in the foot of heels of the next mountain in our past, and we look forward to the exciting roadmap ahead.

Speaker 4: We remain stoned in our commitment to rigorous receivable management. In Q2, our cash collection from new home business increased to RB 10.06 billion, surpassing the new home revenue for the eighth consecutive quarter.

We remain staunchly you know all of our commitment to Avengers receivable measurement in Q2, our cash collection from new home business increased to RMB 10.06 bidding so parking to new home revenue was the eighth consecutive culture.

Stanley Peng: Thank you, everyone.

Tao Xu: I want to invite our staff to present the financial highlights for a second quarter. In the beginning of this year, overall transaction volume gradually normalized the following by the social side rebound, filled by the pent-up amount. Since the second quarter, the lingering effects of the pandemic have become more pronounced, with the pressure on household income and the employment expectations.

Speaker 4: New home diaso in Q2 was 52 days, making a new record low since we went public.

Yeah. So in Q2 was 52 days, making a new record low since we went public.

Speaker 4: Turning to our guidance for the South Courts of 2020-3. We expect the total RAMU to be between the R&D 15.5 billion and the R&D 15 billion in Q3. We're sending a decrease of approximately 9.1% to 11.9% from the same period of 2020.

Turning to our guidance for the sort of cultural between the 20th Street, we expect total revenue to be between RMB 55 on the RMB 16 billion in Q3.

Thinking a decrease of approximately 19, 1% to 11, 9% from the same period opportunity to get to.

Speaker 4: This forecast consists of potential impact of the real estate related policies a democracy called microbial status.

This forecast because it's the potential impacts of real estate related policies at the macro economy recovery status.

Speaker 4: that constitutes the current and preliminary view on our business situation and market condition which are subject to change.

As it comes to choose the carnage and the preliminary view all of our business situation and the market condition, which are subject to change.

Tao Xu: Slotish export and declining FDI posing trenders to the economy recovery. In the real estate market, Everton the price expectations between buyers and sellers, along with the policy loosening speculations, have intensified the market weight and seem attitude, leading to a disseleration in transaction cycles. Meanwhile, in the high-curricities, policy optimization, targeting the ambition of the home upgrade amount, have yet to matured.

We have always placed great emphasis on the shareholder returns.

Speaker 4: We have always placed great emphasis on the shareholders' return.

Speaker 4: leverage of robust cash reserves and prudent financial management, while enhancing shareholder value through the proactive shareholder return initiative.

Leverage all the robots cash reserves on our prudent financial management.

Hudson shareholder value. So, it's a proactive shareholder return initiatives.

Speaker 4: We have maintained strong share repurchase efforts. And from the program initiation in September 2022, we have concluded a year of bye bye.

We have maintained a strong share repurchase office.

From the program initiation in September Syngenta, and Youtube, we have concluded a year of buybacks.

Speaker 4: Over this period, we collectively repurchase the share worth around USD $205 million. We are sensing approximately 57% of our free cash flow during 2022.

Over this period, we can make you Blake repurchase share for so long U S. Dollar 600 in the family.

Tao Xu: Maintaining obstacle to the release of the reasonable amount, under the various factors, the market would underwent a noticeable cultural adjustment in transaction volume in the future. Meanwhile, the home market continues to grieve with the debt risks of dividers. Both supply and demand have remained weak due to the constraints of the effecting new home supply and ongoing consumer concerns about productivity delivery, following a series of defaults by some top-party developers. However, we also notice that the leading indicators of the home demand have been distributed resilient. For instance, the number of home tools made in Q2, remember about historical average in recent years, which is indicated of the continued underlying trends in overall demand.

Approximately 57% of our free cash flow given changing to a new tube.

Speaker 4: The ADS bolts back totaling nearly 41 million, accounting for approximately 3.24% of the copies total share prior to launch of our 2022 repurchase program.

The eight yes votes that totaled nearly 41 million accounting for approximately three two so he upon the two 4% of the Companys total ship prior to launch all ballpark 222 repurchase program.

Speaker 4: this share have already been fully cancelled.

Sure I've already been fully consult.

Speaker 4: This year long, we have spent close to USD 414 million in 5X and the repurchase share amount for 2.12% of our total share.

This year alone we have spent close to 414 million in buybacks and repurchase share a month four.

A replay of one 2%.

The total shares.

Speaker 4: Moreover, today, ComptiSpot approved the extension of the distinct share repurchase program until August 31, 2024, with the repurchase authorization being increased from USD 1B to USD 2B.

Moreover today.

Healthy spot pool, the extension of the existing share repurchase program.

So do you foresee 2024.

With every person authorization.

Crazy from U S dollar one bidding to U S dollar to bid.

Tao Xu: In general, the overall market, so noticeable year-over-year growth in the first half of the year, we have always maintained a neutral market view, and our persistence is being proved. We have continuously enhanced the support for the service providers and installments, implemented the effective cost reduction and efficiency improvement, and the fun to our operations. This mirrors coupled with the rapid growth of our emerging business, how the result in our outstanding performance, and how the better positioners to assist our communities in the market recovery of mixed fluctuations.

Speaker 4: At the same time, we are pleased to announce that the board has approved a special cash dividend of US$0.057 per ordinary share or US$0.171 per ADS to holders of ordinary shares and the holders of ADS. That's all recorded September 15, 2023.

At the same time, we are pleased to announce that the board has approved a special cash dividend of U S. Dollar General 0.05, Southern Palton reshape all U S. Dollar 0.1, southern Wattenberg gas to holders of ordinary shares.

Holders of Etfs, that's all recorded.

September 15th 22 industry, respectively.

Speaker 4: The aggregate amount of the special dividend to be paid will be approximately US$200 million, which will be funded by the surplus cash on the Congress balance sheet.

My mom so the special dividend to be paid wealthier approximately just over 200 million.

Which will be funded by surplus cash on the companys balance sheet.

Speaker 4: We hope to share the benefit of development with like-minded investors who accompany the company in the growth journey and the transcendent cycle.

Tao Xu: In the first half of this year, our TTV reached R&B 1.75 trillion, up 43% year-over-year. During the second course, our TTV amounted to R&B 780.6 billion, reflecting 22.1% year-over-year increase. Furthermore, our natural revenue in Q2 increased by our faster rate at 41.4% year-over-year. To reach R&B 19.5 billion, beating both high ends of our guidance under strict consensus. In addition, net revenue from the new home services have expanded the culture of culture for the past five quarters.

We hope to share it's a benefit to give admins with like minded investors, who are complicated company. He's a growth journey under transcends cycles.

Speaker 4: While distributing the dividends, we are also continuously expanding into new business, seeking organic and sustainable growth.

Well contributing to dividends. We have also continues to respond to new disease seeking organic and sustainable growth.

Speaker 4: At this stage, the primary contradiction in our society is the contradiction between the unbalanced and inadequate development of the people's ever growing needs for a better life.

At this stage the primary contradiction you almost a therapy is the compute diction between the on balance sheet and the inadequate at development of the <unk>.

Post ever growing need for battery life.

Speaker 4: The Protebio meeting held in late July , made an important assessment of the new situation where supply demand dynamics of the real estate market have undergone major changes.

So part of the meeting.

Out into late July maybe an important assessment of the new situation, where supply a few months and that makes up the rest of the market of all the recall major change.

Tao Xu: Our business apart from the housing transaction services, which include home renovation and furniture and rental services, which achieve the significant annual growth, contributing to a revenue share of over 20%. For the first time, in Q2, our gross margin stood at 27.4%, and the gas net income, which are on the 3300 million, on non-gas basis, on net income reached on the 2364 million, compared with the net loss of R&B 619 million for the same period last year.

Speaker 4: The real estate market is going through a rapid transformation from a seller's market to a supply of the amount of balance.

The real estate market is going through a rapid transformation from a sellers market to a supply demand imbalance.

Speaker 4: against this backdrop, the home upgrade oriented demand is gaining prominence.

Against this backdrop.

The whole upgrade oriented demand, it's gaining problem.

Prominence.

Speaker 4: This trend is accompanied by the elimination of excess capacity.

Just trend, it's a company that biotech elimination of excess capacity.

Speaker 4: consumers strong demand for the better living and the establishment of the long-term mechanism within the roads and markets.

Tumor strong ski mountain spoke about her leaving.

Stablish momentum for longtime opinions and we think the real estate market.

Speaker 4: All of this will all contribute to a more stable environment and sustained impetus for the industry development.

All of these will all contribute to a more stable environment.

And Peters.

Tao Xu: By business segment, in Q2, this income transaction GDP increased by 16% every year, as the market recovered to a certain extent from the lower-based last year, under throughout the continued enhancements in the operation efficiency, which further supported our performance.

The industry environment.

Yeah.

Speaker 4: Our financial strategy entails maintaining a robust balance sheet and a healthy cash flow while practicing stringent risk management.

Our financial strategy entails and maintaining a robust balance sheet under healthy cash flow well practicing stringent risk management.

Speaker 4: We will persistently have efficient capital allocation, concentrated on critical growth progress.

They'll persistently efficient capital allocation.

Concentrate on critical growth drove us.

Tao Xu: Nevertheless, our cultural culture basis, the income market experience of considerable adjustment in Q2, following the intensive release of pent-up demand, resulting of 31.3% sequential decrease in our active income GDP. In particular, due to the more pronounced market sentiment adjustment in the first tier cities, the enhanced sequential adjustment in this income GDP was multiplied higher than that of the tonight's brands. With the R&B stable marketization rate in Q2, net revenue from the income transaction services amounted to R&B 6.4 billion, up 15.9% year-old year, under down 30.1% culture of the culture.

Speaker 4: Officer frontline endeavor supports continuously efficiency gain for our agents and store, respond our agents within a healthy platform ecosystem, increase income for the service providers and solidify the fundamental capability of emerging business including home renovation.

Both the frontline and Denver, suppose continuously efficiency gain for our agent installed.

Despite all the ethane and we've seen a house you Praful I'm ecosystem interest income for the service providers under solidifying the fundamental trends in each of your merchant business equally in home renovations.

Speaker 4: to the midst of the recovery of the real estate market and ongoing breakthroughs in our new business.

So that means that the recovery of the real estate market and ongoing breakthroughs in all of our new business wins.

Speaker 4: We will make reasonable investments in scale and marketing to further boost our business movement.

We will make it reasonable investments you skew on the monkey. She reports a boost to our business at the moment.

Speaker 4: For the more, Oregon ????? leadping platform transformation and upgrades in other Jews related to here metros area.

What's a more well prudently explore transformation and upgrade and author ideas related to fight the levy.

Speaker 4: On the coast side, we will have a clear, total cost level. Managing efficiency of the investments, I'm not sure that. Money should be spent, must be spent, and the money that the shouldn't be spent will not be spent. And the money should be demonstrated to clear efficiency and effectiveness. So supporting the business of pressure, if I can...

On the coal side, we will have a clear total cost level.

Tao Xu: While the overall new home market remains subdued, the wordiness of developers to adopt actual sales channel continue to increase, offering a resilient target market. Building around this foundation, our new home business maintain the robust operational moment and the conventional sales rate, hosted by our ongoing refined operations, ecosystem optimization, and our commissioning amongst model, which is repaired by derived purse. In Q2, new home transaction GDP, on our profile, increased by 32.4% year-old year, under 6.2% culture of the culture.

Management and the efficiency of the investment and ensure that money should be spent must be spent the money that they're shifting the spend will now be spent lots of money spend that shifted demonstrating clear efficiency and effectiveness.

Supporting the base accretion if I keep it.

Speaker 4: We believe that in the vast market of the residential services, we will gain huge potential and certainty of growth.

We believe that the use of Boston market over the road Central services, well again huge potential uncertainty also grows well.

Speaker 4: where we will always upholds neutral market perspective, while formally believing that the Chinese economy will continue to adjust, consolidate, enrich, and enhance the long path of the high-cost growth.

Well, we are always eye beholds mutual monkey, despite your while formulate believing that the Chinese economy will continue to adjust.

So to date you can reach and then you kind of a long parcel for high quality growth.

Tao Xu: Net revenue from the new home goes by 30.4% year-old year, under 3.5% culture of the culture. Total R&B 8.7 billion, of which commissions from our survey developers consist of Qs, 46.8%, and the program with the commissioning the bumps contribute 53% of total commission collected, remaining at a high level. Our home renovation and the function business has taken off this year, where the brick suits in both scale and efficiency, breaking the benefits of this damper's investment in our capability over past few years, as well as a successful integration with Chengdu.

Speaker 4: We still hold strong belief that the next China is China.

If you are holding strong belief that the next.

China is China.

Speaker 4: This concludes our prepared remarks. Now, we're open for questions. All greater, please go ahead.

This concludes our prepared remarks, well open for the questions. Operator. Please go ahead.

Speaker 1: Yes, thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced.

Yes. Thank you if you wish to ask a question. Please press Star then one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press Star then two.

Speaker 1: If you wish to cancel your request, please press star than two.

Speaker 1: If you are on a speakerphone, please pick up the handset to ask your question.

If you'll ask speaker phone please pick up the handset to ask question.

Speaker 1: For the benefit of all participants on today's call, please leave them in yourself to one question and if you have additional questions, you can re-enter the queue.

Benefit of all participants on today's call. Please limit yourself to one question and if you have additional questions you can reenter the queue.

Speaker 1: If you are going to ask a question in Chinese, please follow with the English translation. At this time we will pause momentarily to assemble the roster.

He was going to ask a question in Chinese please follow up with English translation.

Tao Xu: Starting from February, monthly contracting sales have consistently exceeded R&B 1 billion for five consecutive months, and the total concrete cells for the fourth half of this year, reach over R&B 6 billion. InQ2, total concrete cells stood at R&B 3.4 billion, reflecting a year-over-year increase of 170%, and a secretional increase of 28.2%. Our pace of run recognition accelerated in Q2, a decision factor from the superimpossible subsidence. Subfitted and our delivery capability improved, by such, we achieved net revenue of R&B 2.6 billion, up 157.5% year-over-year, and 86.4% total of quarter.

At this time, we will pause momentarily to assemble the roster.

Yeah.

And the first question comes from Alex Yao with Jpmorgan.

Oh excuse me plenty of time to go.

Speaker 5: Know know how the sen chon parart incl chquen.

Speaker 3: Will you go? When you go who? Where should chma when you G types? You sued them a prepared remarks in May area time go. sombania should on the Board. Don on while.

Where you've got quite a few years ago western corn belt when T. Sometimes you should I think of prepared remarks.

Or somebody I should turn the bullets on Wow.

Speaker 3: and to share it with people who have love forOL We truly recognize every person who have peace and proudness, whether it is like this, everyone who depend on them, nobody always always realises the same dissolved recognize people who their loved ones who think that

But what do you mean, it seems and Chicago.

But remember that Tim you could chalk HEICO majunga on submission.

Thanks, Tom Bakke E&P trying to shoot from the boardroom.

Speaker 3: VVS Images This is the video fun with Nico Thank you.

You can't change that.

The coupon Joe you should trend up going with future Air Cool Yeah Wow.

And then the suite of genes XI Jinping black ink.

On the timeshare side.

Tao Xu: Net revenues from the first six months of this year exceeded R&B 4 billion. In our leading cities, such as Beijing, we have established positive operational cycles. In Beijing, our monthly contract cells surpassed R&B 200 million in May and June. With the city level, net margin exceeding the industry ceiling, diversified its motor in Beijing, provides a foundation for our rapid replication in additional cities.

Jinyan shop, I Wonder about Washington.

I know what you're finding Shah.

Speaker 3: Can you guys talk about the property market volatility in the first half this year? And also whether the supply and demand structure have changed in the current home transaction market?

Can you guys talk about the Mark.

What I'm trying to come to the market, but I'm kind of taking the first half this year.

And also whether the supply and demand structure.

Have changed.

Home transaction market.

Speaker 3: And finally, how do you think about the market outlook after the recent policy from policy statements? Thank you.

And finally, how do you think about the market outlook option anything read some policy from a policy statement. Thank you.

Tao Xu: We will draw out this proven motor in new cities where it enters, which will gradually make higher contributions to our total revenue as we respond. InQ2, our net revenue from emerging and after services increased by 200, 13.9% year-over-year, and the 36% total of quarter to R&B 1.7 billion. Primarily driven by the growth of our rental property management services and the financial services. In terms of the profitability, contribution margin for its home plantation services, expanded by 8.9% year-over-year to 45.6% inQ2, driven by this income revenue growth, but declined in six-day-hour cost, and a relatively stable, verbal cost ratio from previous years.

Yeah.

Yeah, I think Alex although with it it's a it's a handful marketed well you can approach this year.

Trading conditions continue to need to at the bottom of the cycle there.

The recovery trend will strengthen confidence seem to market both supply and demand side has become more responsible to policy relaxation, the monkeys recovery under supposedly policies I E.

I had to eat the lingering effects of the sweeteners pandemic.

Speaker 4: We believe the China economy cycle has a strong vitality, and we believe the property market will usher in a new period of the recovery and growth.

We believe the China economy cycle has its drawbacks healthy new wafer deems appropriate market will usher in a new period of the recovery and the girls.

Speaker 4: The new home market faces the risk of concluding the year with a yellow beer decline.

The new home market.

Risk of concluding the year with a year over year decline.

Speaker 4: Considering the current market is causing pressure on employment rate and the rest of the expectations, there is still required further improvement and the impact of continuing that crisis leading the private developer phase.

Considering the car to them uncle, he called me pressure.

Tao Xu: On this sequential basis, this by the 30% total of quarter reduction in revenue scale, contribution margin for the income plantation services only decreased by 3.4 points from Q1. The remaining at over 45%, this is 65% to sustain the robust profitability in our coal business. Contribution margin for the new home plantation services, grossed by 3.6 points year-over-year to reach 27.2%, resulted from the remnant function and the rate raised to dream land personnel cost, making the highlights of the point since our listing for five consecutive quarters.

Pressure unemployment rate and the western mutation, that's doing across Florida equivalents.

So you can power through continued without depressing center, leading to probably give up a piece.

Speaker 4: the willingness of the developer to adopt external self-channel continues to increase.

So what do you see yourself, if you've ever to atopic eczema or self channel continues to increase.

Speaker 4: Rather than succeed on the overall market scale, we place a greater emphasis on the sustainable, healthy, and stable growth of the broken retinal cell smart.

The other thing fixates uncle overall monkey scale, when we place a greater emphasis on the sustainable healthy and stable gross over the broker channel sales market.

Speaker 4: This is our target dressing market and where we see more opportunity to be Modified for concentration with a

It's all of our pocket drive some market.

Where we see more opportunity.

Engage.

Speaker 4: In the first half of the year, we experienced a market surge and a subsequent fall. The rapid increase in the first quarter elevated the market expectations.

It's the first hobbles here, we experience a monkey search and a subsequent full the rapidly increasing defaults culture elevated some market expectations since April some market Hudson be tricky, notably with.

Tao Xu: Our cost profit inQ2 registered 97.3% year-over-year growth to R&B 5.3 billion. As we have benefited from the improved contribution margin of our major business segments, as well as a depressing store and author cost as a proportion of revenue, our gross margin stood at 27.4%, compared to 19.7% in the same period of last year. The slide, 3.9 points, declined from Q1's heart, was mainly due to the change in our revenue mix, with the adjustment of its income revenue.

Speaker 4: Since April , the market has been retreating notably, with its steam home sales on our platform continuing to decline from April to June .

In home self all possible continued to decline from April to June .

Speaker 4: New home cells also contracted on a sequential decline and showed a year-over-year decline insociety for over 28%.

New home sales also Kentucky on the sequential decline on the showed a year over year decline in June well over 10%.

Speaker 4: The recent forces decreased threefold. First, the market is normalizing. Second, the market's previous expectations were too high. During the normalization, the gap between the reality and the recovery positions for the–

The reason for this decrease all threefold first to market normalizing second to market, our previous expectation, what youre doing to normalization to that between the variety in the us.

Tao Xu: In future, our gap operating expenses are marked to R&B 4.3 billion, among which, sales and the marketing expenses are R&B 1649 million, increasing by 47.1% year over year, and 27.5% cost over cost due to the update in the marketing expenses for the home renovation and furniture services and our home transaction business. General and others with creative expenses were R&B 2,005 million, down Saturday following 2,250 million in the same period of last year, while increasing by 29.9% from Q1, permarried due to the lack of the better provisions within banks in the future. They increased in the share-based composition and the growth of the emerging business.

The E.

E petitions foretell dampens a monkey confidence.

Speaker 4: Third, the mercury calming has been under pressure since the second quarter of this year. This has shown in the employment rate and the import-ex

So Martin the Macroeconomy has been under pressure since the second quarter of this year.

<unk> has a strong use of your primary rates and the Eplex with data, which also caused a fluctuation you'd western companies.

Speaker 4: The three-year pandemic has left a long-lasting impact on the economy, and it will take time and effort to force this prolonged effect to further eliminate.

The three year pandemic has left a long lasting impact on economy.

Well take time athletes to fault is a prolonged effect to both or you didn't niche.

For the market.

In the first half of the year first the monkey trends of a severity of diverging well.

Speaker 4: In the first half of the year, first the monkey trans have a severity divergent, where seeing this even in different the history of eating a single city.

We are seeing these you can defend the history, but losing a single seeking.

The recent five years.

Speaker 4: Just take Beijing and Shanghai as an example. The core area of Beijing and Shanghai has performed very differently than that used to alter supper.

Tao Xu: While we have a job or readers provision method over past 2 years to fully provide for all possible risks, we have encountered unforeseen incidents of continuing the bad crisis faced by the top property developers, with the growing number of developers filing for the liquidation of bankruptcy. We have further raised the expected loss ratio for developers, with some being elevated to 100%. Especially in Q2, we set aside approximately R&B 64 million, as a better provision for country garden, with the provision ratio exceeding the 85%.

Let's just take our Beijing and Shanghai. So example, the acquirer of Beijing, Shanghai has performed work differently since athene to altra suburbs.

Speaker 4: with a housing price index of the former to reach 40 to 50% pages.

With the housing price index also former to reach 40% to 50%.

Agent pause Harrison to later.

Speaker 4: Second, the internal supply of the amount of structure.

Secondly in terms of the supply came out of that structure.

Speaker 4: The home operating mount is built the most essential for the system market.

The home upgrade the monkeys do the most essential full season market.

Speaker 4: House supply side, the proportional to new latest homes, which age under five years and the age over 20 years has increased the most significant.

Oh supply side, it's a propulsion and uniqueness of.

The homes with age on there for years and it's an age over 20 years as the increase the most significantly.

Tao Xu: We hope the industry can emerging quickly from this predicament and achieve the stable and healthy development. We set on development expenses, depressed by 39% year of year, 2R&B 475 million, primarily due to a high-come reduction leading to a lower personnel cost and the share-based compensation. Sequentially, R&B expenses remain directly stable, with a slightly increase of 4% from Q1. Our non-cap operating expenses for Q2 amounted to R&B 3.3 billion, down 4.6% year of year.

Speaker 4: The increasing supply of the high quality and relatively new homes in the existing home market provides more choices for buyers.

The increasing supply of high quality and the rapidly new homes, you can say existing home market for why some old twice this for buyers.

Speaker 4: From a demand perspective, in the first half of the year, the proportion of transactions involving the demographic and housing unit type of this home upgrade demand have further increased.

Demand for <unk>.

In the first half of the year to propulsion the transaction involving the demo Brosky got into hosting union kind of overseas home upgrades month, how before the increased.

Speaker 4: The proportion of the customers aged 35 to 44 have a increase by 2% to 35% compared with the year of 2022. And the proportion of the unit about 90 square meters has increased by 3% to 37 compared with the year of 2022.

The propulsion of Kosmos, aged 35 to 44 of the increased by 2% to 35% compared with the year of two new two new tube.

Propulsion for the unit.

Bob 90 square meters has increased by three percentage to 37 compared with year opportunity to neutral.

Tao Xu: In Q2, revenue from operations amounted to R&B 1000 and 81 million, a significant improvement from the loss from the operation of R&B 1000 and 580 million in the same period of last year. The operating market increased to 5.5% in Q2 from negative 11% in the same period of 2022, since to our cost margin function and greater operating leverage. Our non-cap income for more operations in Q2, R&B 248 million, compared with the non-cap loss for more operations of R&B 690 million in the same period of last year.

Speaker 4: weather forms supply demand as per you. To houses in P City, I ran the homes from upgrade or rent to demand, I still the primary market focus.

Their phone support demand aspire to the houses in key cities of Eylea in the homes bump upward over the month of Utah Penry Monkey focus.

Speaker 4: Third, the in-home are playing a bigger role in satisfying the home upgrade demand, supporting the overall in-home demand to be stable. Whereas in the new home market, it is still taking time to digest the cumulative risks ready to develop.

Sure So you're seeing home on paying a big hurdle in SEC filings of home upgrade demand supporting so overall scheme home demand to be stable.

Whereas in your home market. They just do take pumps with you Chad it's accumulative risk rating should give all of us on that.

Speaker 4: and the effective supply in coal areas is limited. We are in a market with a strong performance of the eastern home and the demand for the new home continues to be diverted to the eastern home market.

So you're fighting new supply in coal Iris.

Got it.

Well you know a market with a strong performance in home and there's a demand for the new home continues to beat that work you did to the equal monkey.

Tao Xu: Our non-cap operating margin was 11% compared to 95% in the same period of 2022. Q2 net income was R&B 1300 million, compared with the net loss of R&B 1800-66 million in the same period of last year. Non-cap net income for Q2 reached R&B 2364 million, which is the net loss of R&B 690 million in the same period of 222. Our balance is Renaissance robust, as of June 30, 2023, the combined balance of cash, cash equivalent, the street cash, and the shortening investments, among it to R&B 60.8 billion, or US dollar 8.4 billion.

Speaker 4: The comparative advantage of the sinking home remains significant and the sinking home demand is also relatively stable. In June , our monthly sinking home choose in that, through only by 1.7% on April . And even directly as a rebound in July . Or causing to our research, in the second quarter of the number of the residents with a home purchase plan, even those by 11% can carry to the Q1.

The compare to Q, what the bumpy there'll be thinking home.

Remains to keep guns, and you're seeing home D Mountain also drug can be stable.

In June our amongst they you're seeing home choose you guys, who made by one 7% from April .

You can record it as a rebound in July .

Talking to our research in the second cultural.

The number of the residents with a home purchase.

And it goes by a 1% comparable to the Q1.

Speaker 4: The study, amongst us, data support, and support our views as the market governments in the second quarter are shortening normal corrections, not a implication point indicating a long-term trap.

The study amongst our data supports this.

So our view that's the monkey adjustments in the second quarter of Shelton normal collections.

But you.

No not of unification points, you're indicating a long term trend.

Tao Xu: We spend approximately US dollar 346 million, or R&B 2.51 billion in the share of purchase in Q2. On top of that, of total cash liquidity, which accrued customer deposit payable amounted to R&B 79.4 billion, up 680 million from Q1. Our net operating cash outflow was R&B 196 million in Q2. As could in cash in deposit payable, the operating cash flow was R&B 1700, 54 minutes. We remain still in our commitment to various receivable management in Q2. Our cash collection from new home business increase to R&B 10.06 billion, surpassing the new home run new for the A's consecutive culture.

Speaker 4: For the second half of this year and going forward, we first want to emphasize that our market is not suitable for linear ease drop relation based on a single quarter situation. It has inherent cycle and dreams for structure and the direction across.

For the second half of this year and going forward, we forced the lung to emphasize that our market is.

L. A is suitable for linear AAA midnight vignette calculation.

Ah patient based on a single quarters fluctuation.

Hi, So you are in the cycle on the dunes with Doctor on the directional growth.

Speaker 4: In the future, we believe the active policies will bring better support for the market economy. And based on our objective on the study of market dynamics and the neutral market perspective, we also believe the market will become...

These are future waves could eat jockey policies Walgreens better support for the market recovery.

I'll update you on studying the market dynamics and the unusual monkey perspective, we also believe it's a monkey voting cards.

Speaker 4: So part of the Bureau of Mating held on to lighten the force, I emphasize that the need to defy today prevent and resolve the risks in the Piairie.

So quite a few of them, making held on July 24th I emphasize that it's a need to evacuate prevent tend to be sold the risks in the key areas.

Speaker 4: particularly while adopting the significant change in the supply demand dynamics of China's real estate market. It is necessary to adjust and optimize real estate policies in a timely manner, make good use of policy toolbox for city specific measures to better meet the rigid and improvement oriented housing demands, promoting the stable and healthy development of the real estate market.

Particularly well adapting to significant change you just subtract them out and that makes them trying to go to the market.

Tao Xu: New home DSL in Q2 was 52 days, making a new record low since we won the public.

It's necessary to have Jonathan the optimized dosing.

The policies have the menu and make good use of policy to box for city specific measures to better meet the ratchet Truman oriented the housing demand.

Tao Xu: Turning to our guidance for the short course of 2023, we expect the total run new to be between R&B 15.5 billion and the R&B 15 billion in Q3, representing a decrease of approximately 9.1% to 11.9% from the same period of Q2. That forecast consists of potential impact of the real estate-related policies and the macroeconomic coverage status that constitutes the current and the preliminary view on our business situation and the market condition, which are subject to change.

Promoting the stable and healthy the violence of the go to market.

Speaker 4: with the implementation of the relevant support policies, we spare the city hall market to be bought in the Union and recover in the second half. While the new hall market will find the boating among the fluctuations in the so-called.

With the implementation of the government supported policies, we used that to.

Sitting home market to be Bolton Museum and recover in the second half.

While it's in your home market will find that <unk> amount of fluctuation in the so called <unk>.

Speaker 4: Since the Polybirone meeting, we have observed that in Beijing and Shanghai, the number of home tools, new customer demands, and the transaction volume are the first to pick up. The potential rollout of the improvement in demand related policies is expected to activate more than 50% of the population in demand structure for the amplifying and activating the home replacement chain.

It's a part of you were making we have observed that in Beijing or Shanghai.

The number of home two's, new customer demands are there.

Tao Xu: We have always placed great emphasis on the shareholder returns, leverage our robust cash reserves and approve the financial management, while enhancing shareholder value through the proactive shareholder return initiatives. We have maintained strong share repurchase efforts, and from the program initiation in September 2022, we have concluded a year of buyback. Over this period, we can lately repurchase the share worth the wrong, your $1.505 million. We are exchanging approximately 57% of our 3 cash flow during 2022.

Morning.

<unk> to pick up.

It's a potential go out so the improvement in the amount of your policies.

Starting to activate more than 50 per cell population amongst structure.

The fighting and activating the.

Humphrey Places Min Chen.

Speaker 4: At the same time, the road is not only a steel and concrete, but also a carrier of the economy, pipelines and inspiring dreams. In the long run, the road to the ISS, service and efficiency need to be comprehensively improved to better align with the customers' demand for better living.

The same time real estate is not familiar with you on our concrete, but also caveat, obviously economy hotdogs and sparing dreams.

It's a long run.

The ISS service and efficiency needs to be competitive and improve to bite her long ways with our customers' demand for the petrol evening.

Tao Xu: The ADS bolts back totaled nearly 41 million, accounting for approximately 3.24% of the carpet's total share prior to the launch of our 2022 repurchase program. This share has already been fully cancelled. This year alone, we have spent close to $414 million in buybacks and the repurchase share amount for 2.12% of our total shares.

Speaker 4: Recently, the government authority issues measures on promoting home function consumption.

Recently, the government authorities issues, a mattress on promoting home furniture consumption focusing on smart homes once that one stop home furniture solution awful old homes in Wuxi, etc.

Speaker 4: focusing on some of the homes, once that, or once that home furniture solution, or home renovation structure, the recommendation put forward measure to comprehensively promote the house furniture consumption, fully release the potential of the house industry value chain and facilitate the over-improvement of people's quality of life. We believe that

Commendation put forth measure to comprehensively promotes a house only between consumption familiar at least the potential of the housing boom bust through Baidu, Tien and syndicate to overly preliminary people's cadre of light weight to the extend into the future.

Speaker 4: The housing industry will be more mature and enhancing entering into a new stage of scrolls funded by higher quality. Thank you.

Tao Xu: Moreover, today, accounting sport approved the extension of the distinct share repurchase program on March 34, 2024, with the repurchase authorization being increased from your $1 billion to your $2 billion. At the same time, we are pleased to announce that the board has approved a special cash dividend of US$0.057 for ordinary share, or US$0.171 for ADS, to holders of ordinary shares and the holders of ADS, that's all recorded September 15, 2020, respectively.

<unk> got to work your most mature under competency entry into a new stage open schools don't need to buy higher quality. Thank you.

Okay.

Okay.

Okay got it thank you.

And the next question comes from Timothy Zhao with Goldman Sachs.

Yeah.

Speaker 6: Please, the recording is now being recorded. We would like to thank you for your time. We hope that you will continue to be able to participate in the discussion. We hope that you will continue to be able to participate in the discussion. We hope that you will continue to be able to participate in the discussion. Comment and share your thoughts on how we should look at the longer term growth outlook for the core home transaction businesses, including the new home and secondary home transactions. As well as what is the room for the further efficiency enhancement in the core businesses. And what is your specific strategic actions in this regard. And any color that you can share on the progress here today will be helpful. Thank you.

Hello.

You bet.

I was asking if I calculate it's home when you're going through that cycle, you set out a year not all questions arent when I tell you now I'm, a young guy who have cut back on so that's how I see that because I don't go to the top ones you know women side to help me on that <expletive> ton.

Tao Xu: The aggregate amount of the special dividend to be paid will be approximately US$200, which will be funded by the plus cash of the company's value sheet. We hope to share the benefit of the development with like-minded investors who are company's company in the growth journey and the transcendent cycles. While disputing the dividends, we are also continuously spouting into the new business, seeking organic and sustainable growth.

So you're keeping an eye on women's I told me like Ginger.

Command of just share your thoughts on how we should look at the longer term growth outlook for the core home benefits, including a new home and secondary home transactions all asked.

That's about as how what is the room for the further efficiency Hoffman to into corvette NSS and what is your specific.

Strategic actions in this regard and any color that you can share on the progress year to date would be helpful. Thank you.

Yeah, I think I can see.

Speaker 4: Yeah, simple, himsy. Ben fitting from the veteran requirements and their retention of the service providers. Effective cost reduction and the efficiency, you had some of the matter of during the market production. They go to the right period to grow during the market recovery in the first quarter of the year.

Tao Xu: At this stage, the primary contradiction in our society is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. The portfolio meeting held until late July, meeting important assessment of the new situation were supply-demand dynamics of the growth market have undergone major changes. The real estate market is going through a rapid transformation from a seller's market to a supply-demand balance. Against this backdrop, the home-upgrade-oriented demand is gaining prominence. This trend is accompanied by the elimination of access capacity, consumers' strong demand for the better living and the establishment of a long-term mechanism within the real estate market.

Benefiting from the bedroom apartments, and the retention of the service providers effective cost reduction and efficiency. He hasn't been a matter of doing some market corrections. They go to the right to grow students a market recovery in the first close off this year.

Speaker 4: Our housing construction services have built on this foundation and continue to multiply, refine, and perform operations and drive breakthroughs of the Lien Jia-

Halting petrol services, how do you tell them.

Its foundation and are continuing to multi play we find a formal accretions on their drive brick sue so being jets business jets.

Speaker 4: just have a led to the steady growth of our housing transaction services while allowing BACO to better meet customer needs and elevate service provider's efficiency and income.

Just have led to this steady gross up all the housing transaction services, while allowing baker to better meet customer needs and elevate the service providers efficiency on E com.

Speaker 4: As for our core business, we are implementing policies according to the distinctive development status of different regions.

A fall of a corporate piece, we argue continuing policies. According to the <unk>, Inc. Q you buy them at the center itself given the regions.

Speaker 4: In the cities where our existing connected stores are insufficient in scale, we aim to run back the connection with the high quality stores, while supporting stores' ability to recruit agents, conduct suitable training and over management.

Cities, where our.

Tao Xu: All of this will all contribute to a more stable environment and the sustained impetus for the industry development. Our financial strategy includes maintaining a robust balance sheet and a healthy cash flow while practicing stringent erasement. Where we are persistently enhancing the capital allocation, concentrate on critical growth progress. Both the frontline endeavor supports continue state efficiency again for our agent and store, which found our agent within a healthy platform ecosystem, increasing income for the service providers, and a solidify the fundamental capacity of emerging business, including home renovations.

Tonight, you stole all used sufficient that you scale into rumbaugh connection with a high quality stores, while supporting spot's ability to recruit agents conduct suitable twinning an over amendments.

Speaker 4: The number of followers stored in the first half of this year increased by almost 10% from the end of last year. And the number of agents increased by 17%.

The number of followers stall in the first half this year increased by almost 10% from last year number.

The number of agents increased by 17%.

Speaker 4: You see, it's where we reach the certain scale. We are dedicating our efforts to enhancing our efficiency and quality, which are mutually reinforcing and separating.

You will see is where we reached a certain scale. We are dedicating all of our efforts to enhance our efficiency and quality, which are mutually reinforcing.

Separately.

August storefronts, we're out promoting.

Speaker 4: On the storefront, we are promoting a...

Speaker 4: competitive mechanism based on store ramping, which has also been extended to our Ismium home sales channel. We are also dedicated to promote our large store strategy.

Compared to Q, the Pennington based on still ramping which has also been Upended The chart, where you sit in your home.

Tao Xu: So that means the recovery of the real estate market and ongoing breakthroughs in our new business, we will make a reasonable investment in scale and the marketing to further boost our business momentum. For the more, what we have proven today is broad transformation and upgrades in other ideas related to better living. On the cold side, we will have a clear total cost level, manage the efficiency of the investments, and ensure that money should be spent, must be spent, and the money that should be spent will not be spent, and the money should be demonstrated to clear efficiency and the effectiveness. So, supporting the business operation effectively.

Home sales channel, while also dedicate to promote our largest store strategy.

Speaker 4: and creating that edit home page for the owners.

Creating dedicated homepage supposed to owners.

Speaker 4: And our Navaraging Digitalized Operation Analysis tools to enhance their efficiency in business management and facilitate more intuitive.

Leveraging digital lives accretion analysis tools to enhance their efficiency you business management.

Facilitates more unique.

Q2.

Speaker 4: interaction with our platform. Our next step will be help the owners elevate their business understanding and improve their management approach using online products and the dedicated operations support staff, thereby driving successful of store and brokerage price.

You your traction with our platform.

That well be helps to owners.

Elevate their business on Sunday and the inputs that are mentioned in our protein.

Using all of that put us and the dedicated operations to full stop.

Therefore, driving successful stall on the brokerage Bryce.

Speaker 4: Talking three more

Tucking Sri.

Tao Xu: We believe that in the vast market of the residential services, we will gain huge potential and certainty of growth. We will always upholds neutral market perspective, while formally believing that the Chinese economy will continue to adjust, consolidate, enrich and enhance the long path of the high-quality growth. We still hold strong belief that the net China is China.

No.

<unk>.

Speaker 4: There are new elements in our operation, the houses, customers and agents. We continue to refine our EC operations and promote collaboration and more focused operations by agents, ultimately achieving...

Granular elements you know, we're all accretion so policies customer on agents, we are continuing to refine our resale accretion and to promote collaboration and a more focused operation by agents ultimately achieving you had the efficiency.

Speaker 4: For instance, on the homelessness side, in the first half of this year, on the time by our systematic capabilities, we implement homelessness operation mechanism of homelessness maintenance score and store to home listing project, matching nationwide. This allows agents to focus on specific community while improving home maintenance capability and the contextual vision.

For instance of the homeless King side in the first half of this year on the powered by our magic capabilities, where implements a homeless operation mechanics of homeless mentally school and store to home. This pea protein are making a nationwide.

Tao Xu: This concludes our prepared advance.

Unknown Executive: Now, while hoping for the questions, all greater please go ahead. Yes, thank you.

Operator: If you wish to ask a question, please press star than one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star than two. If you are on a speaker phone, please pick up the hand set to ask your question. For the benefit of our participants on today's call, please join yourself to one question and if you have additional questions, you can re-enter the queue. If you are going to ask a question in Chinese, please follow with the English translation.

Just a lot of the agents to folkstone's supposed to take our community, while improving home maintenance capability and their transaction efficiency.

Speaker 4: on your home site while also you can take the focus project strategy to drive sales questionthat's.

Home sites, while also you competing so focused programming strategy to drive sales through efficiency.

Speaker 4: In terms of home customer matching, we launched a product called Point to Point as an inter-agent channel for the flow of the home listing, improving the home customer matching efficiency and the home listing inventory liquidity. As a result, the 14-day sales rate of our home listing shows this to improve by 6%.

Income softball home customer Nike, we launched a product called the point to point, that's our internal agent channel.

Operator: At this time, we will pause momentarily to assemble the roster.

For the homeless D improving home customer matching efficiency and the homebuilding human to liquidity.

Alex Yao: And the first question comes from Alex Yao with JPMorgan. Thank you for your time. I have a question about the red market market. In fact, there is also a discussion about the growth of the market in Puerto Rico. Can you guys talk about the property market volatility in the first half of this year? And also whether the supply and demand structure has changed in the current home transaction market. And finally, how do you think about the market outlook after the recent policy for policy statements? Thank you. Yes, thank you, Alex.

The great Salt the voting day sell through rate of all of our homeless thing so as to improve Bom six.

Percentage were around 12%.

Speaker 4: As for Agent Cotton Matching, we completed the comprehensive optimization of our online sales leads allocation for the Steam Home and New Home Transcendent Services.

At full Eaton cotton Medici.

We completed a comprehensive optimization of our online selves meets allocation plus existing home on the new home transaction services.

Speaker 4: which is taking to account all fairness and efficiency to support junior age scrolls. With respect.

You should take into account, both fairness and efficiency to support doing that agent growth.

With respect to the ecosystem governance.

Speaker 4: To address the issue of the private transfer orders that every platform in the industry is facing, we achieved new breakthroughs in our business conduct options. We empower our climate treatment team by creating digital tools and promoting closed-loop management awareness, to identify risks and fix any issue forms.

Sure drives the issue of the probably the transfer of older Center every platform into industrial facing.

We achieved a new breakthroughs you know where it's coming on top of this we empower our climate human T microwave and digital to promote new closed loop Metromail runs I think these five risk on the fixed and the issue of bonds. So I'll be brief on along the alteon governance system.

Speaker 4: So our bridge is an online offline government system. Service providers are platform now in case you're proactive self-review instead of being possibly supervised.

As for why this all our platform now you can get your email IP himself with you you started off being possibly supervised.

Speaker 4: The owners and agents now hold elevated trust in our prefoot, and their sense of compliance has improved. For new homes, we promote developers with old self-China to jointly abide by the Sunshine Promise, the series of paradigms of their transparent operations. And the promoted investment.

The onus on the agents now hope to trust you know all of our people.

They are essential components has improved.

While new homes.

Promote developers with old selves, China to jointly abide by the Sunshine promise.

Unknown Executive: All our representatives are thinking how market will improve this year from the trend conditions in 2022 as a bottom of the cycle. The recovery trend will strengthen confidence in the market, both supply and demand side, have become more responsible to the policy relaxation. The market's recovery and the supportive policies are expected to eat the lingering effect of this year's pandemic. We believe the China economy cycle has a strong vitality, and we believe the property market will assure you a new period of the recovery and growth.

A series of pagers, although transparent operations.

And promoting you got through why the compliance.

Speaker 4: As of June , more than 5,000 cooperative real estate projects have been covered by this assumption permit.

As of June more than 5000 calls with your real estate. The protests have been covered by this assumption pardon me.

Speaker 4: Going forward, we'll continue to focus on the kind of thing our service capability, those to owners and the homeowner.

Going forward, we will continue to focus on placing over services kind of better T plus the onerous in the homeowners.

Speaker 4: in the context of the increased cross-district new home projects and the chain transaction of existing homes.

In the context of the increased cross district, new home protests.

<unk> transaction will be some homes.

Speaker 4: We hope to further improve our customer targeting capability to match customers with respect to new home projects and enhance our understanding of the customer needs in a more systematic way, thereby strengthening our collaboration network and improving matching efficiency.

We hope to further improve our customer targeting capability to match customer with respect to new home protest and the peso while extending of the cotton nice you know almost two weeks.

Unknown Executive: The new home market faces a risk of concluding the year with a year of your decline. Considering the current market with current pressure, unemployment rate, and the rest of the expectations just still require the further improvement. And the impact of the continue with that crisis that leading the private developer phase. The willingness of the developer to adopt the actual sales channel continued to increase. Rather than six states on the overall market scale, we placed a great emphasize on the sustainable policy and stable growth of the bulk of the channel sales market. This is our target as a market and the where we see more opportunity to benefit.

By strengthening our collaboration network and the improving matching efficiency.

Speaker 4: In the cities where our network coverage is already at the high level, we are for the enhancing efficiency and the quality of our ACA.

And the state is where all network coverage already at a high level.

Well fourth enhancing efficiency Claudio E C.

Speaker 4: We're pursuing a gross off-water call in the emerging business and the Brick suit of our emerging business.

Assuming the gross off Barbara corn in your merchant business in the brick Sue so Barbara merchant business.

Speaker 4: Meanwhile, despite the possible volume decline in the new home market, developers have been more willing to adopt external sales channels.

Well, despite the possible volume declines of new home market. If you buy it for us I'll be more willing to adopt excellent sales channels.

Speaker 4: This data of the total dressable market went for the moon, emphasized on and the benefit of the moon from this sustainable, healthy and aesthetic girls of our dressable market. That is the broken, Chinese sales market.

Is that off the total addressable market where to put the mol emphasize all benefit demand from sustainable healthy and steady growth of our addressable market that is the brokerage channel sales in Marquis.

Unknown Executive: In the first half of the year, we experienced a market surge and a subsequent fall. The rocket increased in the first quarter, elevated the market's expectations. Since April, the market has been retreating in North Korea with the spin-home sales on our platform continue to decline from April to June. New home sales also contracted on a sequential decline and showed a year-over decline in June for over 20%. The reason for this decrease are threefold.

For our direct operations Yeah, a couple of things first we continue to leverage all of our largest store model to take our agent in comps next level in the first half of this year. So average number of eating pretty ingestible reached 18 up.

Speaker 4: Four-hour direct operation in the end-to-the-end business. First, we continue to leverage our large-store model to take our agent income to the next level. In the first half of this year, the average number of agent per day in just store reached 18. About 16% of the...

Up 15% year over year.

Speaker 4: Just average age's income to every social income index also improved by 40% ELB.

And just average agent's income to IV social income pet.

Unknown Executive: First, the market is normalizing. Second, the market's previous expectations were too high. During the normalization, the gap between the reality and the expectations for the demand and the market confidence. Third, the market economy has been under pressure since the second quarter of this year. This has shown in the primary rate and the import-expo data, which also caused the infatuation in Western confidence. The three-year pandemic has left a long lasting impact on the economy and it will take time and effort to force its prolonging effects to further eliminate.

Index also improved by 40% year over year.

Speaker 4: Second, we continue to power innovative agents in St. John Mechanism. Our goal is to create a working environment that benefits professional agents and managers long-term development.

Secondly, we continue to have powered innovative agent. Thank you Mackenzie Oracle used to create a working environment.

Any fees professional agents and managers longton vitamins.

Speaker 4: Third, we will continue to enhance our service capability and the increase investment in traffic acquisition to boost brand momentum, evaporating the Lianjia brand. In the first half of this year, we will focus and standardize our service commitment, and then we will invest more brands, cultivating going forward.

Well well continue to enhance our service capability and the increased investment in traffic acquisition to boost our brand momentum.

Waiting to link up rounds in the first half of this year, where do we focus on both centralized all of our service commitments and then we will invest more Brian calculating going forward. Thank you.

Speaker 1: Thank you. And the next question comes from Harry Chen with City Group.

Thank you and our last question comes from Henry Chien with Citigroup.

Unknown Executive: As for the market current, in the first half of the year, first the market trends have a severely divergent. We are seeing this even in different districts within a single city. In recent five years, just take Beijing and Shanghai's example. The core isle of Beijing and Shanghai has performed very differently than that in the outer suburbs, with the housing price index of the former to reach 40-50%. Page points higher than the later.

Yeah.

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Tiny tiny share watching how that Harry.

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I seem to be they could just shutting down and stuff like.

That's S 40, each time, we cant that donlin, Daiichi IPL gunshot shouldn't need to phils.

But niche eval AT&T moistened, it's quite let's say you're buying.

Speaker 7: The thanks maner, for the opportunity. Has your hungry innovation and furnishing service business progressing any updates on the development of your cocapabilities? Could you share some key operating metrics and the unique economics model for the benchmark cities like hunjo and the piing?

Yeah.

Thanks management for the opportunity How's your hunger and obesity and furnishing service business progressing any updates on the development of our core capabilities could you share some key operating metrics and the unit economic small adults for the benchmark cities like Hangzhou and Beijing.

Unknown Executive: Second, in terms of the supply demand structure. The home upgrade demand is due to most essential falls in the market. How supply side? The proportion of new-related homes, which age under five years and age over 20 years, has increased the most significantly. The increasing supply of the high-quality and directly new homes in the single market provides more prices for buyers. From demand perspective, in the first half of the year, the proportion of the transaction involving the demographic and the housing unit capital.

Speaker 4: Thank you, Henry. The progress of our home renovation and furniture business continue to exceed our expectations. In the second quarter, our home renovation and furniture service business sustained its growth momentum. The contract itself reached around 3.4 billion in the second quarter, making the first half of contract itself volume to reach more than RMB6 billion. The year-over-year growth rate in the second quarter continued to reach over 100%.

Thank you Henry.

Well, it's a poker ourself Barbara home renovation in the furniture business continued to exceed our expectations.

In the second quarter, our home renovation and the furniture services business sustained its growth momentum.

So contract itself reach around the $3 4 billion in the second quarter.

<unk>, the first half compared yourselves voting to reach more than RMB 6 billion. So youll get a close rate in the second quarter continuing to reach over 100%.

Unknown Executive: The proportion of the customers aged 35 to 44 have increased by 2% to 35% compared with the year of 2022. And the proportion of the unit above 90 square meters has increased by 3% to 37% compared with the year of 2022. Chu, whether from supply demand perspective, the house is in key city area and the homes from upgrade or rent to demand are still the primary market focus. Third, the single home are paying a big role in satisfying the home upgrade demand, supporting the overall single home demand to be stable, whereas in the new home market, it is still taking time to digest its accumulated risk, rate to develop us, and the effective supply in whole areas is limited, while in a market with a strong performance of the single home, and the demand for the new home continues to be developed to the single market.

Speaker 4: Not to belabor home renovation order volume increase by over 90% year over year contributing significantly to our founding skill as a project condition and delivery accelerated our revenue for the second quarter surpassed RMB 2.6

Multiple HR homeland away from older volume increased by over 90% year over year.

Do things to get them to Chihuahua East Pony School.

The completion and delivery accelerated our revenue for the second quarter surpassed RMB, two 6 billion, making a 19, 1% increase year over year and up 86% increase quarter over quarter.

Speaker 4: making a 91% increase year over year and 86% increase quote over quote.

Speaker 4: In cities where we have leadership, we have established a virtual cycle of the school, ecology and economy performance.

In cities, where we have the leadership, we have established a virtuous cycle of the Scoop hockey and you called me performance.

Speaker 4: Beijing and Hangzhou were the four cities we entered and leading the way in establishing virtual cycles.

Pacing in the Hangzhou cities, we entered and the odds are leading the way you're staffing machine a virtuous cycle.

Speaker 4: Just take the United Showcase. In terms of the school, our contracted cells in the city exceeded the RB 600 million in the second quarter. With monthly contracted cells surpassing R&B 200 million for two consecutive months.

Just take the kind of showcase in terms of the scale or contract itself into city exceeded RMB 600, many in the second quarter with a monthly contract itself, surpassing RMB 200 million, while two consecutive months wisdom.

Speaker 4: with the cost of revenue to reach over RMB 500 million.

What's the pulse of revenue to reach over RMB 500 minutes.

Unknown Executive: The comparative advantage of the single home remains significant, and the single home demand is also relatively stable, in June, our monthly single home choose in that, through only by 1.7% on April, and even directly as a rebound in July, or causing through our research in the second quarter of the number of the residents with a home purchase plan, even those by 1% compared to the Q1. The steady demand side data supports our view that the market adjustments in the second quarter are short and normal corrections, not a implication point indicating a long-term trend.

Speaker 4: We expect Beijing's annual contract sales to exceed RMB 2 billion in this year. For Hangzhou, the contract sales falling for the second quarter also reached over RMB 500 million. We expect their annual contract sales in this year to reach most RMB 1.8 billion.

What are your thoughts as you sign new contract itself to exceed RMB 2 billion this year.

For home do the contract itself falling for the second quarter also reached over RMB 500 million.

We expect there and new contract itself easier to reach most of the RMB, one 8 billion.

Speaker 4: We can now simultaneously initiate and complete thousands of home renovation units from us in Beijing. This is just a brief zoom for the industry.

We can now simultaneously illustrates and compete sells into home renovation unis promote CPG just as a significant breakthrough for the industry.

Speaker 4: In terms of the possibility, the cost of the operating property in Beijing's great RMB 50 million. As the monthly operating property is treated, the RMB 10 million four file consecutive amounts.

In terms of the profitability.

Culturally all breaking party gene reached RMB 50 million.

Amongst L. Britten Party city, the army some meaningful filed because up to a month.

Speaker 4: Using Beijing and the Hongzhou as guiding examples, we are replicating the model and experience from this well-established city across the entire country. Shanghai is expected to bring through the milestone of Army one-billion in Iron Contract sales, and it's a contribute to Iron Revolution and Iron Revolution of Army 700 million years this year, which means it will reach the same scale as Beijing treating one area behalf.

Uhm painting, a hunk of like the <unk> samples, we are replicating the model and experience from this well established city across the entire country.

Unknown Executive: For the second half of this year and going forward, we first want to emphasize that our market rate is not as suitable for linear use to play a linear use to operation based on a single quarter's fluctuation. It has a inherent cycle and a room for structure and the directional growth. In the future, we believe that active policies will bring better support for the market recovery, and based on our objective understanding of market dynamics and the neutral market perspective will also believe the market will recover.

Shanghai is expanding to two breakthrough of the milestone of RMB 1 billion in new contract sales.

Contributes items revenue.

RMB 700, many of them this year, which means it will reach the same scale as aging trading why it would be at.

Speaker 4: We expect cities like Wuhan, Ningbo, Sudo, and so on to reach the same scale as Beijing and Hangzhou in our third wave of expansion.

We expect to see this type of what meaningful pseudo on us so long to reach the same Scotts Beijing, Hangzhou, you're almost 30 wasteful expulsions.

Unknown Executive: The popular meeting held on July 24, emphasized that the need to effectively prevent and result risks in the key areas, particularly while adopting the significant change in the supply dynamics of China growth and market. It is necessary to adjust and optimize growth rate policies in a timely manner, make good use of policy two-box for city-specific measures to better meet the budget and the improvement or rent the housing demands, promoting the stable and the housing development of the real market.

As of mid of this year. After just nine months after the integration of Hudson due on the vehicle well achieved RMB 240 million in contract itself on the RMB hungry children. Many revenue, it's showing that goes through it exceeding 120% year over year, which are used to.

Speaker 4: as of mid-August this year after just nine months of the integration of Wuhan Shen Duan's vehicle, we were accused of the R&B 240 million in contract sales and the R&B 120 million in revenue. It showed in the growth rate, exceeding 100, 20% year year, which is the strong testament to the effectiveness of our laser focus, the self-strategy. Dr. Zashen ten additional allocation points.

Testament to the effectiveness of Bolivar, Nathan the south strategy.

Poker as a means of hypothetically vitamins.

Speaker 4: So, which is cycle way, how to establish that city level. That's a result of our committed effort in developing capability, combined with consistent the iteration for the improvement over years.

So we're just cycle, we have a stoppage at the city level that's ever been solved so while we're committed I thought in the bathroom capability combined with consistently.

Unknown Executive: With the implementation of the relevant support policies, we spare the city-home market to be bought in June and recover in the second half, while the new home market will find the potent amount of fluctuation in the subculture. Since the part of your meeting, we have observed that in Beijing, Shanghai, the number of home choose, new customer demands, and the transition morning are the first to pick up. The potential drawouts of the improvement in the amount of the policies is disbanding to activate more than 30% of the population in demand structure, for the amplifying and activating the home replacement change.

The equation for the improvement over years.

Speaker 4: Number one, for the cost of micro-station, we continue to empower agents to become the community expert and home advisor.

Number one for the customer acquisition, we continue to empower <unk> to become a comedian I suppose and otherwise.

Speaker 4: Their effective and intensive customer acquisition and conversion has helped us break through the home renovation and furniture industry both tonight at the top of the funnel.

Theres effective under extensive customer acquisition and the conversion has helped us break through its a homerun, we shouldn't the furniture industry report Tonight at the top of funnel.

Speaker 4: This year, more than 45% of the home renovation customers would be followed by other corporate

This year most of them 45 yourself the home renovation customers will be followed by all of our core business.

Speaker 4: Simultaneously, home renovation business is contributing to the growth of the home transaction and home rental services. The other way around.

This thing home renovation business is contributing to the growth of the home transaction and the home rental services to other weird ones.

Unknown Executive: At the same time, Rosé is not only a spew and a concrete, but also a carrier of the economy, high-class and the inspiring dreams. In the long run, Rosé's eyes, surface and efficiency need to be comprehensive and improved to vitalize the customer demand for the battery being. Recently, the government authorities issued measures on promoting home function, focusing on some of our homes, once that will once stop home furniture solution, old home renovation schedule.

Speaker 4: In Beijing, designers are involved in the merriment during the initial stage of the home transaction and create the renovation design plan during the negotiation stage to facilitate the transaction completion. Our customer acquisition of the bank is free to us out from putting our man effort into acquiring the customer like our peers, keep keep going.

In Beijing. He centers are in both ease of amendments during the initial stage of the home transaction.

Great. Congratulations did sometime during the negotiation stage to facilitate the transaction completion.

Our customer acquisition at the bumpy it frees us up from putting over Manhattan.

You can chew up claiming so a customer like our peers keep call they do.

Speaker 4: Instead, we can focus more on enhancing our core capabilities in home renovation and front-trip

Is that we can focus more on enhancing all the coal capabilities in home renovation in the furniture business.

Unknown Executive: The recommendation put forward measures to comprehensively promote the house furniture consumption, fully release the potential of the housing industry value chain and facilitate the overwhelming improvement of people's quality of life, we believe that in the future, the housing industry will be more mature and comprehensive, entering into a new stage of scrolls funded by higher quality.

Speaker 4: This enables us to concentrate on the sense of the operation and overcome growth barriers.

This enables us to constantly.

Concentrate on the sense of the accretion and overcome gross barriers.

Speaker 4: I'm sure for the management of the service provider, we have invested our resources in service providers. But the monthly redefined how they can earn the income and how they participate in the industry.

For the amendment of the service provider.

Have a investing our resources in service providers fundamentally redefine holiday.

Whereas the income on the Jose.

And in the industry.

Speaker 4: This is achieved by the positive and the systematic order is paid to.

This achieved by the policy and that's as much older.

It is patchy timely settlement.

Speaker 4: Providing the incentive and the respect for the high-quality service providers. Both financial and the COT.

Providing the incentive and the respect for the high quality service providers, both financially and culturally.

Unknown Executive: Thank you.

Speaker 4: This sheet has transformed the industry's power of the bad money, drives out of good money into the good quality wing.

She has a transformed you guys to be pumped practice open to buy money drops out of the money into the good coffee wins.

Timothy Zhao: And the next question comes from Timothy Zhao with Goldman Sachs. Good. Thank you for your time.

Unknown Executive: I'd like to ask you about the business of the company, including the new house and the educational industry. How do we look at the long-term growth of the company? In this way, we have some examples. In this case, we have some examples of how we should look at the long-term growth of the company, including the new home and secondary home transactions, as well as what is the room for the efficiency enhancement in the core finances.

Speaker 4: Number three, for the delivery capabilities, we invested technology and the research, focusing on two things. First, we enhanced our reliance on the system and the rules for the progress management. Not just on-

Number three floater delivery capabilities, we invested <unk> hundred research.

Focusing on two things first we enhanced the over reliance on the system and the juice for the progress amendment knocked out some people. So we can do to ensure assistance at a Congress pizza construction materials and supply chain.

Speaker 4: So we can build an Android system that covers design, construction, materials, and supply chain.

Moreover, we install the AI driven.

Into our improved.

Improved customer acquisition efficiency, which empower batesville go beyond their traditional boundaries of the party amendment enables so distinctly and efficiently mentioned timeline.

Unknown Executive: And what is your specific strategic actions in this regard and any color that you can share on the progress years day will be helpful. Thank you. Thank you, Timothy. I've been thinking about the better requirements and retention of the service providers. Effective cost reduction and the efficiency enhancement measures during the market corrections. Baker achieved the right key to growth during the market recovery in the first quarter of this year. Our housing competition services have built out its foundation and continue to multiply with final form of operations and draw a brief source of the lean job business.

The government and the service I'm not just sure a Hong Kong key breakthrough in scale.

Speaker 4: Number four, for our product capability, we invested in product capabilities. Our products are based on deep user insights covering the rich SKU offers to meet specific user demands.

For fall, we're profiling capability, we invested in production entities are put off based on the deep user insights covering did reach out to you all.

Unknown Executive: This has led to the steady growth of our housing competition services, while allowing Baker to better meet customer needs and elevate the service provider's efficiency and the income. As for our corporate needs, we are in continuing policies, according to the distinct key development status of different regions. In the cities where our city connected store are insufficient in scale, we aim to run out to connection with the high-courtage stores, while supporting store's ability to recruit agents, conduct suitable training and overmanagement.

To meet a specific 60 months.

Speaker 4: As we keep developing our capabilities, we are confident that we can continuously improve our business towards a virtual cycle of quality, scale, and economic retention across various regions. Thank you.

It's a week keep developing obligate Betty we had.

Pumped and that we can continuously.

<unk> improved our business towards the virtuous cycle of kottke scale economies, we can across.

The cost of batteries the reason.

Good.

Thank you. Thank you Matt next question.

Okay.

Thank you. Our next question comes from Randos wrong with Banc of America Securities.

Speaker 1: Thank you and next question comes from Randers, wrong with the Bank of America Securities.

Thank you.

Oh I'm sorry.

Based on what she's done to Suncor.

Because you don't want you to say that foundation.

Speaker 8: Now just you comple one from G, di are bor the familily she year. Now your tissues are out, the sourmon teach and next year the jger. So J gian now D to the jation in the counil. They hold a J, some about hundred in SHO this year.

No it does.

If you're a company that's been running from Goldman Sachs.

She is our marquee Salomon Suzanne.

Unknown Executive: The number of power stored in the first half of this year increased by almost 10% from the end of last year, and the number of agents increased by 17%. You see, it's where we reach the certain scale. We are dedicating our efforts to enhancing our efficiency and quality, which are mutually reinforcing and inseparable. On the stall front, we are promoting a competitive mechanism based on storm ramping, which has also been extended to our e-small new home-south China.

Yeah that would take us below.

Yeah, No I can't.

It does tend to have oh that sounds about right.

Speaker 8: So, thank you for taking my question. So, can management elaborate more on the recent organization upgrade and structural change? So, what other changes that have taken?

Oh, Thank you Scott.

For taking my question. So can management elaborate more on the recent organization upgrade and structural change so what other changes that have taken place and what his thoughts behind this great. Thank you.

Speaker 8: and what are the thoughts behind this upgrade. Thank you.

Speaker 3: Okay, thank you Miranda. The purpose of our organization's structure is to establish a new formation to achieve our strategic goals. The strategies and business concepts require new organization structure to undertake and implement them.

Okay, that's a good Amanda.

First of all all of the organizational structure or the adjustment it was temporary issue anew.

Unknown Executive: We are also dedicating to promote our large-store strategy and creating dedicated home page for the owners. And our leveraging digitalized operational analysis tools to enhance their efficiency in business management, and facilitate more intuitive interaction with our platform. Our next step will be how to store owners, elevate their businesses on spending, and improve their management, promoting, using online products, and the dedicated operations for staff, thereby driving successful or store-on-the-board page price. Contracting three more granular elements in our operation, the policies, customer and agents.

Information to achieve our.

Our strategic goals.

This strategy is a business concept through cars, new organization structure to undertake and implement them.

Speaker 3: focusing on joyful living, fulfill careers services.

Focusing on jaws, we're leaving fulfilled career services.

So it says in the springs at the call, we upgraded Australia to run volumes through lease or postponing of an additional adjustments.

Speaker 3: and that aspirated the cult. We upgrade our strategy to when bodies through wins. Our core is burning up in additional adjustments. It's also the upgrade of our management philosophy and the mechanism.

Also the upgrade of our management philosophy, and the Canada and U S.

Speaker 3: The new organization structure is center on customers and praising the frontline at the center of our value creation with how it's established for business lines.

In addition, structuring center on customers and appraising the phone line at our central all value creation, we've always had been aged four business lines.

Speaker 3: There are home transaction services, home renovation and furnishings, rental property management services, and a pay hot job. A nice function line.

Home transaction associates homeland nutrition finishes rental property management services on our behalf.

Nice function lines, comprising finance R&D strategy quality assurance human resources users compounds.

Speaker 3: complicing from finance R&D strategy quality assurance human resources users compliance

Unknown Executive: We continue to refine our recent operation and promote collaboration and the more focused operations by agents, ultimately achieving your high efficiency. For instance, on the home-listing site, in the first half of this year, on the time by our systematic capabilities, we implement home-listing operation mechanisms of home-listing maintenance school and store-to-home listing. This allows agents to focus on specific community while improving home maintenance capability and professional efficiency. On the home side, we are also integrating the focused project strategy to drive faster efficiency.

Speaker 3: public affairs and cooperate collaboration. Together, these are designed to provide you a living for customers and for future years for service providers.

Let me go first on the comp rate.

Operations together.

Designed for launch of ILUVIEN for customers and fulfill careers, Paul So basically waters.

Speaker 3: Our business alliance will work to take care of our customers, inspiring jobs for customers in Richard City and fulfilling careers for different types of service providers.

Our business Alliance will look to take care of our customers use borrowings youll forgive him for customers in Asia.

City and are fulfilling careers for different types of service providers.

Speaker 3: The function lines will leverage the professional capabilities to provide good services. To hold and identify and companies internal customers and have different cities to achieve the goals of the admirable services to our living.

The functional lines, you'll average professional capabilities to provide good services to hold that defines our company's internal customers and have different cities, but she would it goes on a marble services job for living.

Speaker 3: So these actions we aspire to get rid of many of our quitting and becoming diseases.

Oh shows we aspire to get it right.

Unknown Executive: In terms of our home customer matching, we launched a product called point-to-point as an inter-agent channel for the flow of the home listing, improving the home customer matching efficiency and the home listing inventory liquidity. As a result, the 14-day sales rate of our home listing shows this to improve from 6% to around 12%. But for agent custom matching, we completed the comprehensive optimization of our online sales leads allocation for the single and new home transaction services, which is taking into account both fairness and efficiency to support junior agents growth.

Maybe a quick quaky and become a big company to disease.

Speaker 3: I return to the pre-nature, how we view ourselves, our customers and internal partners.

I returned to the Punisher Halloween ourselves, our customers and internal partners.

Speaker 3: The adjustment of our organizational structure lays the foundation for company-wide consensus. And in wide-every individual to participate in very cool, cool creation, we reveal for cities ununifying ideas and growth, specialized graphs. That is, since our industry surrounds the cycle.

An adjustment or organizational structure.

The foundation for company wide cost sensors, I mean, why every individual participated in very cool co creation of Alpha.

Hey, a unifying our gears and goals.

Clasps, eastern's, allowing industry somewhere else or cycles I returned to the natural the house yourself with leading E and in service people and I'm 90.

Speaker 3: I return to the natural houses of living and in service for people. And I would want demands, demands of a vital living. Thank you.

90 minutes.

Unknown Executive: With respect to the ecosystem governance, to address the issue of the private transfer orders that are ever performed in the industry facing, we achieved a new breakthroughs in our business conduct governance, where we empower our client achievement team by creating digital tools and promoting closed loop management awareness, identify risk and affect initial funds. So our increased online offer and governance system, service providers are our platform now engaging in a proactive self-review instead of being passively supervised.

Humans.

Thank you.

Yeah. Thank you.

Speaker 1: Thank you. We are now approaching the end of the conference call. I will not come to call over to your speaker host today, Mr. Ting Lee for closing calls.

Thank you we are now approaching the end of the conference call I'm not trying to call over to your speaker host today, Mr. Tim Lee for closing comments.

Thank you operator.

Speaker 2: Thank you, again, for joining us today. If you have any further questions, please, please read to contact by cooking Dr. Alicia Tune. It will contact information provided on our website. She's concludes today's call, and we look forward to speaking with you next, again, next quarter. Thank you, and goodbye.

Once again for joining us today, if you have any further questions. Please feel free.

You can contact information provided on our website. This concludes today's call and we look forward to speaking with you Matt.

Got it thank you and goodbye.

Unknown Executive: The owners and agents now hold elevated trust in our platform and their sense of compliance has improved. For new homes, we promote developers with old self-channel to jointly abide by the some-shine promise, the series of packages on their transparent operations, and the promoted industry-wide compliance. As of June, more than 5,000 of the cooperative real-state projects have been covered by these some-shine promise. Going forward, we will continue to focus on the enhancing our service capability, those to owners and homeowners, means the contacts of the increased cross-district new home projects and the planned transaction of these new homes.

Speaker 1: Thank you. The conference has all concluded. Thank you for attending today's presentation, and we now present, connect your life.

Thank you. The conference has now concluded thank you for attending today's presentation.

Connect your lines.

Okay.

[music].

Okay.

[music].

Unknown Executive: We hope to force the new power of customer marketing capability to match customer with the respective new home projects and enhance our understanding of the customer needs in our most systematic ways, thereby strengthening our collaboration network and improving matching efficiency. In the cities where our network coverage are already at the high level, we are forcing enhancing efficiency and the quality of our ACN, we are pursuing a growth of our core and emerging business and the breakthroughs of our emerging business.

Okay.

Okay.

[music].

Unknown Executive: Meanwhile, despite the possible volume decline into new home market, developers have been more willing to adopt external self-channels. This data of the total dressable market, work for the moment, emphasize on and benefit the moment from sustainable, healthy, and aesthetic growth of our dressable market, that is the bulk of China's self-market. For our direct operation in the entire business, first, we continue to leverage our large-store model to take our agent income next level.

Unknown Executive: In the first half of this year, the average number of agents per day and just store reached 18, about 15% of year. The interest average agents income to average social income impact also improved by 40% of year. Second, we continue to power innovative agents in sentient mechanisms. Our goal is to create a working environment that benefits professional agents and managers long-term development. Third, we will continue to enhance our service capability and the increasing investment in traffic acquisition to pose the brand momentum. In the first half of this year, we will focus on the centralizing of our service commitments and the way we invest more brand, cultivating, going forward. Thank you.

Harry Chen: And the next question comes from Harry Chen with City Group. Thank you for the opportunity.

Unknown Executive: As your home renovation and furnishing service business progressing, any updates on the development of your core capabilities could share some key operating metrics and the unique economic models for the benchmark cities like Hangzhou and Beijing. Thank you, Henry. The progress of our home renovation and furniture business continued to exceed our expectations. In the second culture, our home renovation and furniture service business sustained its growth momentum. The contracted sales reached around 3.4 billion in the second culture, making the first half the contracted sales volume to reach more than R&B 6 billion.

Unknown Executive: The year over goes to rate in the second culture. Our home renovation order volume increased by over 90% year over year, contributing significantly to our zoning school. As the project completion and delivery accelerated, our R&U for the second quarter surpassed R&B 2.6 billion, making a 91% increase year over year and 86% increase cultural culture. In cities where we have the leadership, we have established a virtual cycle of the school, faculty and economy performance.

Unknown Executive: Beijing and Hangzhou was the first cities we entered and leading the way in establishing virtual cycle. In terms of the school, our contracted sales in the city exceeded R&B 600 million in the second quarter, with monthly contracted sales surpassing R&B 200 million for two consecutive months, with a quarter running to reach over R&B 500 million. R&B 3.2 billion in this year. For Hangzhou, the contracted sales volume for the second culture also reached over R&B 500 million, and raised by their annual contract sales in this year, to reach more than R&B 1.8 billion.

Unknown Executive: We can now simultaneously initiate and complete sales in the home renovation units per month in Beijing. This is the significant breakthrough for the industry. In terms of the probability, the culturally operating population rate R&B 50 million, as the monthly operating population exceeded R&B 70,45 consecutive months. Using Beijing and Hangzhou as guiding examples, we are replicating the model and experience from this well-established city across the entire country. Shanghai is expected to bring through the milestone of R&B 1 billion in R&B contract sales, and to contribute R&B 700 million in this year.

Unknown Executive: Returning, it will reach the same scale as Beijing, treating one year ahead. Returning by cities like Wuhan, Ningbo, Suzhou, and so on, to reach the same scale as Beijing and Hangzhou in our third wave of expansion. As of middle of this year, after just nine months of the integration of R&B 500 million, we have achieved R&B 240 million in contract sales and R&B 120 million in revenue. It is showing the growth rate exceeding 100-20% year year, which is the strong testament to the effectiveness of our latest forecasts of the sales strategy.

Unknown Executive: Poker Attings of Capability Development. The workers cycle way have established at the city level as a result of our committed effort in dividing capability, combined with consistent the iteration for the improvement over years. Number one, for the cost of liquidation, we continue to empower agents to become the community expert and home advisor. There are effective and the extensive customer acquisition and the conversion has helped us break through the home renovation and furniture industry both to Nike at the top of the funnel.

Unknown Executive: This year, most in 45% of the home renovation customers will be forward by our core business, simultaneously, home renovation business is contributing to the growth of the home transaction and home renovations, the other way around. In Beijing, designers are involved in the merriment during the initial stage of the home transaction, and create the renovation design plan during the negotiation stage to facilitate the transaction completion. Our customer acquisition of the volunteers is free to adopt from putting our main effort into acquiring the customer like our peers.

Unknown Executive: Instead, we can focus more on enhancing our core capabilities in home renovation and the furniture business. This enables us to concentrate on the sense of the operation and overcome growth barriers. Number two, for the management of service provider, we have invested our resources in service providers, for the monthly, redefine how they can earn the income and how they participate in the industry. This is achieved by the passive and the systematic order of dispatching family settlement, providing the incentive and respect for the high-quality service providers both financial and culturally. This should have transformed the industry's past practice of the bad money drives out of good money into the good quality wins.

Unknown Executive: Number three, for the delivery capabilities, we invested technology and the research, focusing on two things. First, we enhanced our reliance on the system and the rules for the progress management, not just on people. So, we can build an system that covers design, construction, materials, and supply chain. More wins bought AI, driven, according to improved customer acquisition and efficiency, which in power-based go beyond the traditional boundaries of the product management. It enables the difficulty and efficiency management timeline. Countdown, the government and the service online, this you ensure a high-quality breakthrough in scale.

Unknown Executive: Number four, for our product ability, we invested in product abilities. Our products are based on the deep user insights covering the research that you offer to meet a specific user demand. As we keep developing our capabilities, we are counting that we can continue to improve our business towards a worker cycle of the quality, scale, economy return across the various regions.

Unknown Executive: Thank you. Thank you, Max. Thank you.

Miranda Zhuang: And next question comes from Miranda Zhuang with a Bank of America Securities. Thank you. [inaudible] Gua. Thank you, Mr. Gua. [inaudible] Gua. Thank you, Mr. Gua. [inaudible] Gua. Thank you, Mr. Gua. Thank you.

Operator: We're now approaching the end of the conference call.

Siting Li: We're not going to call over to your speaker host today, Mrs. Ting Li, for closing calls. Thank you, operator. Thank you once again for joining us today. If you have any further questions, please, please read to contact us in Dr. Malaysia team. It will contact information provided on our website.

Siting Li: She's concludes today's call and we look forward to speaking with you again next quarter. Thank you and goodbye. Thank you.

Operator: The conference has all concluded.

Operator: Thank you for attending today's presentation and we'd also like to connect your lines.