Q1 2024 KE Holdings Inc Earnings Call
Operator: Hello, ladies and gentlemen. Thank you for standing by for Ke Holdings Inc.'s First Quarter 2024 Earnings Conference Call. Please note that today's call, including the management preparers' remarks and question and answer session, will all be in English. Simultaneous interpretation in Chinese is available on a separate line for the duration of the call. To access the call in Chinese, you will need to dial the Chinese language line. At this time, all participants are in listen-only mode.
Hello, Ladies and gentlemen, thank you for standing by for <unk> Holding Inc. First quarter 2024 earnings Conference call. Please note that todays call, including the management of their parents and my <unk> question and answer session, albeit English simultaneous interpretation.
In Chinese is available on a separate line for the duration of the call to.
Speaker Change: To access the call and Chinese you'll need to dial into the Chinese language line.
Speaker Change: At this time, all participants are in listen only mode.
Operator: Today's conference call is being recorded. I will now turn the call over to your host, Ms. Siting Li, the IR Director of the company. Please go ahead, Siting.
Speaker Change: Today's conference call is being recorded.
Speaker Change: I'll now turn the call over to your host Fittingly IR director of the company. Please go ahead.
Siting Li: Thank you, Operator. Good evening and good morning, everyone. Welcome to KD Holdings for Baker's third quarter 2024 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's investor relations website, investors.kd.com. On today's call, we have Mr. Stanley Peng, our co-founder and chairman, 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 performance. Before we continue, I refer you to our Safe Harbor Statement in our earnings press release, which applies to this call as we make our look-in.
Speaker Change: Yeah good.
Speaker Change: Good evening and good morning, everyone and welcome to Katie Holdings for because third quarter 'twenty 'twenty four earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website investor Scotts Dot com on today's call. We have Mr. Sally post our co founder Chairman and Chief.
Speaker Change: Executive Officer, and if it's how she our exceptional director and Chief Financial Officer.
Speaker Change: Paul will provide an overview of our strategy and business development and Mr. Hu will provide additional details on the company's financial results.
Speaker Change: Important thing I refer you to our Safe Harbor statement in our earnings press release, which applies to this call as we will make forward looking statements. Please also note that because earnings press release on this conference call include discussions of unaudited GAAP financial information as well as I love It as non-GAAP financial measures.
Speaker Change: Please refer to the company's press release, which contains a reconciliation of the non-GAAP measures to comparable GAAP measures lastly, unless otherwise stated all figures mentioned during this conference call are in RMB for today's call management will use English language. Please know that the Chinese.
Speaker Change: Transformation is sports convenience, but it's only in the case of any discrepancy management statement in the original language will prevail.
Siting Li: Please also note that Bankers Earnings Press Release and this conference call include discussions of unnoticed GAAP financial information as well as unnoticed non-GAAP financial measures. Please refer to the Company Press Release, which contains a reconciliation of the unnoticed non-GAAP, measured to a comparable gap. Lastly, unless otherwise stated, all figures mentioned during this conference call are in our inbox. For today's call management, where we use English as the main language, please note that the Chinese translation is not available, for convenience purposes only. In the case of any discrepancy, management. With that, I will now turn the call over to our Chairman and CEO, Mr. Stanley Peng. Thanks, guys. Thank you, Mr. Chen. Hello, everyone.
Speaker Change: I will now turn the call over to our chairman and CEO Mr. Chen.
Speaker Change: Please go ahead Sir.
Steve: Thank you Steve.
Stanley Yongdong Peng: Thank you for joining FACO's First Quarter 2024 Onions Conference. In the first quarter of 2024, the transaction volume of existing homes on our platform prevailed. The Passengers of New Homes in 74 Cities, to find a high-paying state in the first quarter of next year. Existing home transactions continue to show year-over-year growth in 13 cities. [inaudible] 630 billion in the fourth quarter, down 35% year-over-year. At the same time, GTV of existing home and new home transactions declined by 32% and 45% year-over-year.
Speaker Change: Hello, everyone. Thank you for joining saltwater too unusual earnings conference call.
Speaker Change: This was part of our whole Chinese gives more transactional volume.
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Speaker Change: Yeah.
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Speaker Change: Once the lease is kind of hot water.
Speaker Change: Horner on last year.
Dan: Existing home transaction continue to show year over year growth is due to some cities. This is Dan.
Ruth: Ruth you existing home.
Speaker Change: From B C.
Speaker Change: It was 130 billion in the fourth.
One of them.
Speaker Change: 35% year over year at the same time.
Speaker Change: <unk> resistive home, new home transaction declined by 72%.
Speaker Change: <unk> year over year.
Speaker Change: Gotcha.
Stanley Yongdong Peng: The overall performance is expected to improve in the coming quarter. At the end of the first quarter, the total number of actual stores on our platform reached over 42,500, an addition of nearly 3,000, primarily attributable to a substantial increase in the number of connected stores. In particular, our strategy of active conferring with connected stores has paid off, with additional key partner brands joining us across Wuhan, Xiamen, Nanjing, Jilin and other cities.
Speaker Change: The overall performance.
Speaker Change: In the coming quarters.
Speaker Change: And all the first quarter the total number of actual store.
Speaker Change: <unk> reached <unk> 42.
Speaker Change: 100, and unusual nearly three solid.
Speaker Change: Compared with last year.
Speaker Change: I am really attributable to a substantial increase in novel managed stores in particular our strategy.
Speaker Change: Countries with National General.
Speaker Change: Additional key partner brands.
Speaker Change: Hi, gentlemen.
Speaker Change: Judy.
Stanley Yongdong Peng: It also demonstrated that more industry partners are fighting in rows to improve efficiency nowadays. Since the fourth quarter of 2023, the performance of newly connected stores has also exceeded our expectations. There has also been a positive surprise in Asian productivity in the new Canada stores, with only a handful of employees compared to those of last year's heavy-duty stores, major market fluctuations. This smaller store boasts operational efficiency and community outreach capabilities far beyond our expectations; their performance has also motivated us to improve our service competence.
Speaker Change: Yes.
Speaker Change: So demonstrating that a more in depth industry partners are finding employee efficiency nowadays.
Speaker Change: The fourth quarter of 2023 and performance on our newly come out of school and all of those did you always a penny tissues Dear.
Speaker Change: <unk> also been policies.
Speaker Change: Raj you agent productivity in the New York nationally with only a handful of employees compared to dose or not and then.
Speaker Change: Currently stools major city Metro market fluctuations.
Speaker Change: This small smaller stores, mostly rational efficiency and our community ultra rich capabilities five beyond our expectations.
Speaker Change: The outperformance ultimately Randy to improve.
Speaker Change: So these competencies to bear.
Speaker Change: So.
Speaker Change: Sorry.
Speaker Change: Our two five times.
Stanley Yongdong Peng: [inaudible] The scaling up of the ancient and stone network also further enhances the most fundamental infrastructure of our landfill residential services. I'm an agent, and so Lianjia, Shanghai has adopted a new innovative business format to achieve growth. Looking back at 2022, our homeless encovery rate in Shanghai was around 35%. This told us there was room for improvement in our community outreach, and that our traditional large-scale model was too heavy-
Speaker Change: We're scaling up our engine and strong nano also further enhances the most fundamental infrastructure.
Speaker Change: Our last call, we said casuals sources.
Speaker Change: On the agent in soft launch.
Speaker Change: Shanghai.
Speaker Change: In the lithium business will match to it.
Speaker Change: <unk> groups looking back at 2022, <unk> coverage rate Shanghai.
Speaker Change: 65%.
Speaker Change: Pulled us there was room for improvement from our community outreach and thereafter.
Speaker Change: Traditional <unk> model was too heavy handed in personal.
Stanley Yongdong Peng: We advocate for a limitless aging storm model, where stores and service providers with strong community ties are in dispensable strategic competition. Over the years, we have explored many ways to make improvements on the agent side, and in 2023, Dianjia Shanghai discovered more possibilities on the storefront. [inaudible] Under the large-scale model, with nearly 50% of the budget going to the community, many service outlays derive... from this last talk, which we call community means. This streamlined approach, including providing local convenience services such as ordering at various small stores or mobile service kiosks and reception points located in high-traffic areas like community centers, shopping malls, and subway stations, by deepening our employer-enabler relationship and establishing a close community of rational, present, and responsible employees.
Speaker Change: And Brett to vacate.
Speaker Change: <unk> is a new store model, we are strong and our service providers with strong community ties.
Speaker Change: Is it possible strategic component.
Speaker Change: Over the years, we have many.
Speaker Change: Many ways to make improvement on the engine side.
Speaker Change: <unk> history, and Josh Shanghai.
Speaker Change: More possibilities on saw from used car in various innovative.
Speaker Change: Prices under the large store model.
Speaker Change: Producing nearly 60% of community many services Insulates you Ryan.
Speaker Change: From this nostos, which we call committing too many stores.
Speaker Change: This is streamlined approach, including including providing local convenience services, such as printing kind of very small.
Speaker Change: I'll move on those kiosks and reception punts.
Speaker Change: High traffic areas like community centers shopping malls and subway stations.
Speaker Change: A deep bring our employer neighborhoods angst tabulation close community rational process.
Stanley Yongdong Peng: We strengthened customers' as well as agents' sense of security. We have achieved deeper community coverage and better identified local customer needs. Our coverage of the 3.5 million target residential households rose to 95% compared to 87% in 2022.
Speaker Change: We strengthened customers as realized agents since all security.
Speaker Change: We have achieved deeper community coverage and better identify local customer needs.
Speaker Change: Turning to Q3.
Speaker Change: Our coverage.
Speaker Change: Three 5 million target.
Speaker Change: Annual household realistic grew 19, 5% tier two.
Speaker Change: 87% in 2022.
Stanley Yongdong Peng: And our home listing coverage rate in Shanghai soared from 65% to 84%. We also made many new attempts to enhance the cost-reduce in housing transactions. In terms of online operations, the rise of new media platforms over the past few years has led more agents to leverage those channels to acquire and engage customers. Capitalizing on this trend, agent and store owners of our platform also began using tools like short videos and live streaming to present home listings, introduce residential neighborhoods, and share real estate knowledge. Despite these early efforts, the lack of a new media strategy resulted in inconsistent customer acquisition efficiency. In response, we kicked off the Galaxy Initiatives in 2022.
Speaker Change: Home listing carved you're raising your Shanghai song from 65% to eight 4%, but.
Speaker Change: We also met many new attempts to enhance our customer of yours, you housing transactions in terms of online with brushes their margin on new media platform over the past few years have needed more hedges to leveraging those channels to our partner and engaging customers.
Speaker Change: Capitalize on this trend agent and <unk> on our platform also began using tools like short videos and live it's Jamie.
Speaker Change: Streaming to present homeless us introduce residential neighborhoods and assure really real estate knowledge.
Speaker Change: Alright.
Speaker Change: These early efforts the leg of our new media strategy, resulting in Congress.
Speaker Change: Customer acquisition efficiency.
Speaker Change: This fall we kicked off the galaxy initiatives in 2022 in Q abating in the empowering more agents and historical nearer to acquire customer sort of short videos and live streaming.
Speaker Change: End of the first quarter of this year, our fleet useful in certain amount of work as greenfield over corresponded.
Stanley Yongdong Peng: [inaudible] with almost 36 million followers, making it one of the largest real estate MCN networks nationwide. The traffic led to thousands of transactional... More importantly, this can better satisfy customer needs. Service providers can connect with a wide audience via those new media platforms, which offer potential customers a more impartial interaction compared with traditional online methods. This approach gives agents an edge in uncovering hidden customer needs. For us, the emergence of this realistic content and influencers is not just a chain of a result. Rather, it's a reflash.
Speaker Change: With almost <unk> six meetings followers Mickey to win with the largest real estate AMC networks nationwide.
Speaker Change: Traffic leads to the salaries are transaction last year.
Speaker Change: Importantly, this campaign on satisfying customer needs.
Speaker Change: Our vendors can connect with a wider audience liners, new media platforms, which offer potential customers are more impartial interaction compared with traditional online masters.
Speaker Change: Approach.
Speaker Change: Ages.
Speaker Change: Uncovering heightened customer needs for us, but you can alert emergency emergence of this real estate can content you have lasers is not just auction of a result of technological advancement.
Speaker Change: Gardner with flash.
Stanley Yongdong Peng: And the results from the further specification of buyers and sellers agents within the industry. As for our offline operations, we have been advancing the iteration of a series of services that directly improve the customer experience. This includes a direct connection with the housing provided fund to facilitate, We also implemented measures that enhanced the customer experience by elevating our business partners' engagement, such as a public supervision and control program to enhance ecosystem governance and the entire agent operation.
Speaker Change: And the results from the further specification of buyers and sellers agents within the industry.
Speaker Change: As for offline.
Speaker Change: Operations, we have.
Speaker Change: Sensing <unk> duration of a serious on the services that are done virtually improve customers experience.
Speaker Change: This includes a direct connection with the housing improvement.
Speaker Change: <unk> fund capacity tight.
Speaker Change: Easier access, we also implemented mayors and enhanced customer experience.
Speaker Change: Our business partners and cashman, such as public supervision and control program.
Speaker Change: Honest ecosystem governance and.
Speaker Change: And entire <unk> operations.
Stanley Yongdong Peng: Taking the windstorm transaction system model we implemented in Suzhou, as an example, historically, customers need to go to four separate places to complete the required procedures for existing home transactions and are often hand-pressed to schedule appointments in advance. The internalized process also hinders our ability to ensure assembly's endurance throughout the entire transaction.
Speaker Change: Taking the Winthrop transaction. So some model that you can mention in Suzhou. As example, historically customers need to go to work a separate place it passes to complete the required procedures for existing home transactions.
Speaker Change: And our open hand pressed to schedule appointments and events.
Speaker Change: If you turn the last process also.
Speaker Change: Hinder our ability to ensure a seamless experience throughout the entire transaction.
Stanley Yongdong Peng: We sought ways to streamline this process by promoting collaboration among local government agencies, banks, and Related Enterprises in Suzhou, alongside our technology support. All this effort provides one-stop wholesale services for existing home transactions, covering transaction funds as well as face-to-face bank mortgage sign-ups, home title transfers, tax payments, and collection of property ownership. As Suzhou successfully pioneered the wind-solid cells model with an end-to-end post-sales transaction process,
Speaker Change: So we sought ways to streamline this.
Speaker Change: By promoting collaboration among local government agencies banks and enterprises in Suzhou alongside our technology support.
Speaker Change: All this effort providing restaurant wholesale services for existing home transaction covering transaction from phones as true phase.
Speaker Change: Faithful face bank mortgage sign ops home title transfers highest payments and collection on property ownership so duplicates.
Speaker Change: As <unk> successfully pioneered the windstorm services model.
Speaker Change: And post sales transaction process.
Stanley Yongdong Peng: We plan to replicate this model in most cities and significantly improve customer experience going forward. Regarding customer experience, there is still ample room for improvement as we delve deeper into customer needs and iterate our service products. For example, in Home Rental Services, last year, we conducted a survey involving the needs of 100,000 tenants and identified several major pain points, such as delay, Service Response, Non-Standard Housing, and a lack of live termination guarantee.
Speaker Change: For existing homes, we plan to replicate this model <unk> significantly improved concentrate there as we go forward.
Speaker Change: Regarding concentrate goodness.
Speaker Change: Initiatives.
Speaker Change: There's still ample room for improvement as we go deeper into customer needs and then iterate our finished products.
Speaker Change: Sample Johan rental services last year, we conducted a survey involving the needs on one hand.
Speaker Change: <unk> filed and tenants and identified several major pinpoints.
Speaker Change: Such as delayed.
Speaker Change: So this is a response normal stemmed on housing.
Speaker Change: Amenities after movie the high cost of changing rentals, and a lack of lease termination guarantees.
Stanley Yongdong Peng: As a response, I'm marking, In 2023, we upgrade our services to include seven service offerings that can be required, such as prepare housekeeping, broadband setup, smart door lock, Worry Free Rental Change, Flexible Payments, and Dedicated Boundaries. Also, we implemented the fire source community. 3-Day Unconditional Reform, Upon Least Termination, Guaranteed Reform for Rental Change, and a Home Security Guarantee. Compensation for Unsatisfactory Mental Illnesses and the Timely Deposit Reform
Speaker Change: As a response on March 16, 2023, we upgrade our services to a <unk> seven.
Speaker Change: <unk> service offerings.
Speaker Change: We retired.
Speaker Change: Repair housekeeping broadband Saddam smart door lock.
Speaker Change: <unk> III vento change flexible payments and dedicated.
Speaker Change: Bouncers also we implemented fires those communities three day.
Speaker Change: Conditional.
Speaker Change: Upon lease termination guaranteed reform for a vendor change a home security guarantee.
Speaker Change: Compensation for officers at factory inventory bonuses and the timely you posted with pumps.
Stanley Yongdong Peng: If so, it's just a benefit, is specifically designed to address customers' most critical pain points. We have created a standardized service fulfillment process based on best practice in this area. The result has been a notable improvement in standardized service. The fulfillment rate, high customer satisfaction rate three days after moving in, and a better customer recommendation rate. I have just touched on some of the key initiatives we have been exploring over the quarter.
Speaker Change: It was just benefits.
Speaker Change: And it guarantees.
Speaker Change: A specific specifically designed to address customer most critical pain points, we have created a standardized.
Speaker Change: With limited processes.
Speaker Change: Based on best parties in this area. The result has been a notable improvement in our stand on dice services fulfillment rate high customer satisfaction rates three days after movie and a better customer would come in tissue mix.
Speaker Change: The area I have just touched on <unk> some of the key initiatives, we have been preparing all of the quarters.
Stanley Yongdong Peng: What we are working toward is assembling a group of people to force a better pace forward that enables us to navigate the changing times. We are looking to evolve our aging store model for housing transactions as part of our new initiative, and then you will elevate the overall big platform to new heights, striving to meet and address the opportunities presented by the new era in China's housing market. Thank you. Next, I would like to turn the call over to our CFO, Xu Tao, to review our first quarter financial... Thank you Stanley and thank you everyone for joining us.
Speaker Change: What are we looking to law.
Speaker Change: Somebody group of people before a better pace forward.
Speaker Change: Enables us to navigate the changing times.
Speaker Change: Looking through your walk on the itunes store model for housing transaction services.
Speaker Change: Asset quality and efficiency of our new initiatives.
Speaker Change: Anyways overall Baker platform to new Heights striving to meet and then address the opportunities presented in a new era in Chinas housing market.
Speaker Change: Next I would like to turn the call over to our CFO. She Todd will review, our first quarter financials.
Tao Xu: Before we dive into the performance of Q1, I would like to briefly touch upon some updates on the recent housing market. The housing market saw a year-over-year decline in Q1, primarily due to the high base effect from the release of pent-up demand early last year following the pandemic. However, compared with the typical first quarter market performance, the home market was fairly stable in this Q1. Some cities' consumption volumes exceeded those of the same period last year.
Speaker Change: Thank you Stephanie and thank you.
Speaker Change: Well everybody bulge on Earth.
Speaker Change: We dive into the performance of Q1, I would like to briefly touch upon some updates on recent housing market.
The housing market is still at Yale with declining to one <unk>.
Speaker Change: I only have a high base effect from the release of the pent up demand early last quarter.
Speaker Change: Yeah.
Speaker Change: The pandemic.
Speaker Change: Ivor comparator with the keep whole fourth quarter market performance.
Speaker Change: The whole market was fairly stable in Q1.
Speaker Change: Ticket transaction volumes exceed those of the same period last year.
Tao Xu: This improvement can be partly attributable to city-specific policy optimization that further relaxes the criteria for home buyer eligibility. Another reason is the active entry of first-time home buyers into the market, primarily driven by reduced mortgage rates and housing price adjustment. This factor further lowers the home purchase threshold and cost, at the same time.
Speaker Change: This improvement can be public input Tucows city specific policy of optimization.
Speaker Change: With a relaxed quite sure of the homebuyer eligibility.
Speaker Change: The other reason.
Speaker Change: The active until the first time homebuyer, it seems with the market.
Speaker Change: Primarily driven by the reduced mortgage rates.
Speaker Change: Housing price adjustment.
Speaker Change: This factor both the lower the home portrait Zac Posen to call.
Speaker Change: At the same time.
Tao Xu: Due to home buyers' performance for readily available existing homes, more demand was met in the existing home market. Turning to our performance in Q1, our Redmi reached RMB 16.4 billion compared with RMB 20.3 billion in the same period last year. Growth Markets stood at 25.2%, compared with 31.3% in Q1 last year. Gap net income reached RMB432 million compared with RMB2.75 billion in the same quarter last year
Speaker Change: Due to the homebuyer performance for a record deal available at home more.
Speaker Change: Demand was not as bad as the whole market.
Speaker Change: Turning to our performance in Q1, our revenue reached RMB 16, 4 billion comparable with the RMB and they place the repeating in the same period last year.
Speaker Change: Gross margin stood at 25, 2% compared to one 3% in Q1 last year.
Speaker Change: Net income reached RMB 432 million compared with RMB 275 billion the same quarter last year.
Tao Xu: And the non-gap net income was RMB1.39 billion, contrasted with RMB3.56 billion in the same period last year. Our Q1 performance was weaker than the same period last year, mainly due to the higher base performance from the one-time impact. It can be partly attributable to the concentrated release of pandemic demand in the same period last year. Another reason was the optimistic expectation for the housing market, which continued to surge demand in Q1 last year. At the same time, the new home market continues to suffer from spirit depression.
Speaker Change: On a non-GAAP net income was RMB 139 billion.
Speaker Change: Oh Trust takeaways RMB, three 5 billion.
Speaker Change: In the same period last year.
Speaker Change: Our Q1 performance was weaker than the same period last year, mainly due to a higher base performance from the one time impact.
Speaker Change: It can be partly attributable to the content with the release of <unk>.
Speaker Change: In the same period last year.
Arthur: Arthur reason with the optimistic expectation.
Arthur: Multi market continued to surge demand in Q1 last year at the same time, the new home market continues.
Arthur: Depression.
Tao Xu: We believe the first two factors are one-time impacts, and our future performance will better reflect our business operation. Regarding home transaction services in Q1, both new and existing home markets saw a year-over-year decline, primarily due to the high base performance from the one-time impact, as I previously mentioned. Revenue from existing home transactions reached RMB5.7 billion, down 37.6%, with GTV reaching RMB453.2 billion, down 31.8% for some year-over-year basis. GTV outperformed revenue year-over-year, mainly due to a higher contribution from the GTV of its in-home transaction service, facilitated by Connect agent. The remaining amount was recorded on a net.
Arthur: We believe the fourth two factor a one time impact on our future performance will be better reflect our business operation.
Arthur: Regarding the home transaction services in Q1, both new and existing home markets, so year over year decline.
Chris: Primarily due to higher base Willfulness found the one time impact that Chris mentioned.
Chris: Revenue from existing home transactions reached RMB, five 7 billion, so 37, 6% with Ptv, reaching RMB $453 2 billion doses.
Chris: The answer to 1.8% both of them year over year basis.
Chris: Good T V outperformed the revenue year over year, mainly due to a higher contribution from the JV of homecare.
Chris: Home care.
Chris: But as indicated by its connect agents.
Chris: They're running with a quality, although not to beat it.
Tao Xu: Our strategic dysfunction of the mall-connected store played a key role in driving this growth. The contribution margin from the in-home transaction services reached 44.5%, remaining steady quarter over quarter, but dropped 4.6 percentage points year over year. This change was mainly due to the increased fixed labor costs related to the growth of the number of Lianjia agents and the negative leverage inference from the reduced revenue. In terms of the new home transaction services, the industry is still in a risk clearance phase, with the planned demand dynamics remaining subdued. CRRC shows that sales from the top 100 developers decreased by nearly 50% year-over-year usage in Q1.
Chris: Our strategic dysfunction of the Moe Mackie stool played a key role in driving growth.
Chris: The contribution margin from the home transaction services reached 44, 5% remains steady quarter over quarter.
Chris: Four six percentage points year over year.
Chris: The change was mainly due to the increase of fixed labor costs related to growth of the number of leads that you're doing now.
Chris: Net leverage improved from the reduced revenue.
Chris: In terms of the whole new home transaction services the impact through the stealing a race face with.
Chris: The amount and that means remaining.
Chris: A few.
Speaker Change: Yeah. He showed that the cells from the top hundred give effort equates by nearly 50% year over year, It's Q1.
Tao Xu: Through the sustained refinement of our new home business operations, we have expanded our channel partnership while upholding our great success goal. In Q1, New Home GTV reached RMB161.8 billion, down 45.4% year-over-year. Revenue from new home transactions was RMB4.9 billion, dropping by 41.5% year-over-year.
Speaker Change: It will just depend refinement of all of our new home purchase operation, we have expanded our channel partnership with upholding our races that colt.
Speaker Change: In Q1.
Speaker Change: MTV rich on the $151 8 billion down 45, 4% year over year.
Speaker Change: Revenue from your home transaction, what the RMB four 9 billion dropping by 41, 5% year over year.
Tao Xu: So our performance of brand new over GTV year over year was due to our strong monetization capability. The contribution margin for new home contracting services was 22.3%, followed by 4.1 percentage points, quote unquote, and 4.8 percentage points year-over-year. The decline was attributable to the rise in the variable commission and the negative leverage inference due to the relatively stable fixed labor cost and the lower revenue.
Speaker Change: The outperformance of revenue over T V.
Due to our strong electrification capabilities.
Speaker Change: The contribution market for new home Health services was 22, 3% voting by a full point of vintage point with all the quota.
Speaker Change: <unk> eight percentage points year over year.
Speaker Change: The decline was attributable to the raws ease of bearable emission and the lack of leverage in Peru, which was a record eight stable fixed labor costs and the lower revenue.
Tao Xu: In Q1, the commission income percentage from SOE developers was around 49%, maintaining a relatively high level. Revenue for Home Renovation and Furniture Design, Home Rental Services, Emerging, and Other Services grew by 112.9% year-over-year in Q1, accounting for an increasing portion of our total revenue at 35% and surging by 21.7 percentage points from the same period in 2023. Our home renovation and furniture business continues to grow at a fast pace. In Q1, contracted sales reached RMB3.4 billion, up 26.1% year-over-year, and revenue reached RMB2.4 billion, rising by 71.1% year-over-year.
Speaker Change: And here, what the commission income percentage by myself.
Speaker Change: What's wrong with a 49%.
Speaker Change: Aggressively hi label.
Speaker Change: Revenue for home renovation and the furniture business.
Speaker Change: Home rental services emerging on other therapies go by hundreds of 12, 9% year over year in Q1.
Speaker Change: Accounting for an increasing portion of our total revenue.
Speaker Change: 5% on the 13th by 10 to one seven percentage points from the same period opportunity to industry.
Speaker Change: Our home renovation in the furniture business.
Speaker Change: He knew that to grow at a fast pace.
Speaker Change: In Q1 contract itself reach RMB, three 4 billion up 26, 1% year over year.
Speaker Change: Revenue reached RMB, two 4 billion rising by 71, 1% year over year.
Tao Xu: The growth rate of renminbi outpaced that of contract sales. This was primarily due to the concentrated release of pent-up demand after the lifting of the pandemic restrictions in the same period, leading to a substantial rise in contract sales and creating a high base of GDP. But due to insufficient delivery capacity, running recognition was slow in the same period, leading to a lower base of revenue.
Speaker Change: The growth rates of revenue outpaced that helps the contract itself.
It was primarily due to the concentrated relief of the penthouse ski mountain the lifting of the restriction Youbet Centurion last year.
Speaker Change: Speaking to a substantial right you can kind of take yourself and they're creating a high base of G. T V.
Speaker Change: But due to insufficient that delivery capacity. The revenue recognition was slow in the same period last year.
Speaker Change: That to a lower base of revenue.
Tao Xu: In terms of the highlights in the first quarter, total contracted sales in March reached nearly RMB2 billion, up around 53% year-over-year. Particularly noteworthy was the record-breaking March contracting sales in Beijing, surpassing RMB400 million. The contribution market for the home renovation and furniture business was 30.6 percent, remaining flat year-over-year and up 2.8 percentage points sequentially. This was mainly attributable to the rebound in gross margins of furniture and home furnishings, quote unquote. The percentage of contracted sales contributed by our home transaction services continues to increase, representing around 51% of total GDP in Q1, making an 11 percentage point increase year over year to further highlight the synergy between our housing transactions and other residential services. Moreover, our home renovation and furniture goodness has grown more diverse.
Speaker Change: In terms of the highlight in the fourth quarter total contract itself March reached nearly RMB 2 billion up around 53% year over year.
Speaker Change: Currently not.
Speaker Change: Let's see what the record breaking March contract yourself in.
Speaker Change: The parking RMB $400 million.
Speaker Change: The contribution margin for the home renovation in the furniture business.
Speaker Change: 36% Dominion front year over year and up two eight percentage points sequentially.
Speaker Change: This was mainly attributable to the rebound in coal market of one true home furnishing Coca Cola.
Speaker Change: The percentage of Kentucky cells contributes valve of Homecare services continued to increase.
Speaker Change: Representing around 51% of total PT being sure.
Speaker Change: Making an 11 percentage point increase year over year.
Speaker Change: It's important to highlight the affinity each hour of housing transaction and author with Central services.
Speaker Change: Moreover, Aloha.
Speaker Change: Our home renovation on the furniture business has grown the most diverse.
Tao Xu: Fund, the home furnishings sales raised around RMB 940 million yuan, accounting for around 27.8% of total contract sales, representing a 5.1 percentage point improvement from the same period of 2023. The Contracted Sales of the Furniture and Home Furnituring Retail, which, outside of our home renovation package, reached around RMB882 million yuan, accounting for around 26% of total contractual sales, representing a 4.7 percentage point improvement from Starting this year, we have begun to disclose the financial performance of our home rental services due to their growing skill and significance in our business, and the revenue from this service accounted for over 10% of total revenue in the first quarter.
Speaker Change: Furniture and home place yourself raised around RMB 940 million in Q1.
Speaker Change: Hunting for Rob can be seven 8% of total contract sales representing a five one point improvement from the same period opportunities into suites.
Speaker Change: The Kentucky, south of the furniture and home furnishings retail.
Speaker Change: I'll start off all the home renovation package rates of around RMB 882, many who what.
Speaker Change: Accounting for around the 25th yourself with total contract yourselves.
Speaker Change: $74 seven percentage points improvement from the same period of two new to industry.
Speaker Change: Starting from this year, we have become too did quote the financial profile of a home rental services.
Speaker Change: Without going too.
You know our business.
Speaker Change: Revenue from the survey.
Speaker Change: For over 10% of total revenue.
Speaker Change: Hold on.
Tao Xu: In Q1, revenue from our home rental services reached RMB 2.6 billion, up 189.3% year-over-year, mainly due to the rapid growth of the numbers of the rental units under our management, and End of Q1, the number of units managed by our home rental services exceeded 250,000, reflecting 159.1% rise year-over-year, which is the revenue generated from our home rental services or decentralized rental management services, have erupted, contributing to more than 95% of total... Other revenue sources include centralized rental apartment services, my position of platform traffic, and online rental management services. In Q1, our net revenue from emerging and other services increased by 85.3% year-over-year to RMB700 million.
Speaker Change: In Q1 revenue from our home rental services reached RMB, two 6 billion.
Speaker Change: <unk> hundred 89, 3% year over year mandated.
Speaker Change: Mainly due to the rapid growth of the number of the reagent.
Speaker Change: Rental unit, although Alba management.
Speaker Change: And end of Q1.
Speaker Change: Unit magnitude the buyout of a home rental services exceeded 250000, reflecting a hungry for 19, 1% rise year over year.
Speaker Change: What was the run up in rates from our home rental services, our decentralized rental banking services.
Speaker Change: Kathy lette contribute to more than 95 herself total.
Speaker Change: Other revenue sources include the centralized the rental apartment.
Speaker Change: This is my position of Python traffic.
Speaker Change: Rental and services.
Speaker Change: <unk> net revenue from the Mercury and other services increased by $85, 3% year over year to RMB 700 meter.
Tao Xu: Next, let's move on to our other costs and expenses in Q1. Our store costs totaled RMB 685 million in Q1, remaining stable overall compared with the same period of 2023. Other costs decreased by 10.7% year-over-year to RMB 379 million, primarily due to the reduction in taxes and the surcharge.
Speaker Change: Now, let's move on all of our other coffee expenses in Q1.
Speaker Change: Stoke halt totaled RMB 685 minutes, each what remains stable overall compared with the same period opportunity to mystery.
Speaker Change: Other costs.
Speaker Change: <unk> by 10, 7% year over year to RMB $379 million, primarily due to the reduction in Texas and the surcharge.
Tao Xu: As a result of decreased operating leverage, our gross profit dropped by 35.1% year-over-year to RMB4.1 billion, with gross margin of 25.2% down 0.3 percentage points, quote-unquote, [inaudible] Year-over-year gross margin fell by 6.1 percentage points, mainly due to the lower contribution margin from its existing and new home transactions, along with the decreasing share of the revenue from the home transaction. This decline in gross margin was partially offset by a larger portion of revenue from our home renovation and furnishings business. In Q1, our GAAP operating expenses totaled RMB4.1 billion, showing a 21.9% year-over-year increase and a 22.7% quarter-over-quarter decrease.
Speaker Change: As a result of a decreased operating leverage all of course puppy dropped by 35, 1% year over year to RMB, four 1 billion West coast margin of 25, 2% from their old planes three percentage points Hotel Dakota.
Speaker Change: Got it.
Speaker Change: Stable.
Speaker Change: Year over year cost market fueled by one.
Speaker Change: One percentage point, mainly due to the lower contribution margin from the existing and the new home constructions.
Speaker Change: Along with a decreasing share of the revenue from these two home transaction.
This decline in gross margin was partially offset by the larger portion of revenue from all of our home granulation on the furniture business.
Speaker Change: In Q1, our GAAP operating expenses totaled RMB, four 1 billion, showing a 21, 9% yoga inquiry under 22, 7% quarter over quarter decrease.
Tao Xu: Specifically, G&A expenses climbed by 24.5% year-over-year to RMB2 billion, driven by the hard personnel costs associated with our home renovation and home transaction services. The rise in G&A expenses on a year-over-year basis was mainly due to the provision for FedEx, totaling approximately RMB19 million in Q1, whereas around RMB127 million of the provision for Baidu was reversed in the same period of last year Sales and marketing expenses went by 25.5% year-over-year to RMB 1.6 billion, propelled by the rapid expansion of our home renovation and furniture business.
Speaker Change: Physically G&A expenses.
Speaker Change: And by 24, 5% year over year to RMB 2 billion.
Speaker Change: Driven by the higher personnel costs associated with all the home renovation on the home transaction services.
Speaker Change: G&A expenses on a year over year basis was mainly due to the provision for bad debt.
Speaker Change: Of course, it makes me RMB 19, many in Q1, whereas the wrong. The RMB 167 of many of the provision for bad debt will be booked in the same period of last year.
Speaker Change: Jonathan the marketing expenses go biogen's at five 5% year over year to RMB, one 6 billion.
Speaker Change: Propelled by the rapidly function.
Speaker Change: Homes on the weekend and our furniture business.
Tao Xu: Our RMB expenses amounted to RMB 467 million, with only a slight change compared with the first quarter last year. In terms of the possibilities, got income from operations totaled RMB12 million in Q1, compared with RMB2.98 billion from the same period of 2023. The gap operating margin was 0.1%, compared with the 14.7% from Q1 to this week. Non-cash income from operations amounted to RMB The Non-Gap Operating Margin was 5.9%, compared with 18.9% in Q1 2023. The year-over-year decline in operating margin was mainly due to a lower gross margin and higher operating expenses ratio.
Speaker Change: R&D expenses amounted to RMB.
Speaker Change: 467 minute with only slight change compared with the fourth quarter last year.
In terms of the pulp identity guard.
Speaker Change: Income from operations totaled RMB 12 million kilowatt.
Speaker Change: Perlitz RMB 298, Eddie from the same period between getting the suite.
Speaker Change: GAAP operating margin was down 1%.
Speaker Change: Compared with a 47% from the cooler tended to disagree.
Speaker Change: non-GAAP income from operations amounted to RMB 902.
Speaker Change: 960 million compared with RMB, three 8 billion from the same period opportunity in history.
Speaker Change: non-GAAP operating margin was five 9%.
Speaker Change: There were 18, 9% from Q1 to meet industry.
Speaker Change: The year over year decline in operating margin was mainly due to the lower gross margin and the higher operating expenses ratio.
Tao Xu: That net income totaled RMB432 million in Q1, compared with RMB2.75 billion from the same period of 2023. Non-Gap Net Income amounted to RMB1.39 billion from the same period of 2023, shifting to cash flow and balance the matrix. We realized a net operating cash outflow of RMB950 million in Q1, largely due to the seasonal impact of the bonds payment during this Q1. On top of that, US$250 million allocated towards the share you purchased during the first quarter. Our total cash liquidity, which excludes customer deposits payable, reached RMB75.6 billion.
Speaker Change: GAAP net income totaled RMB 432 million in Q1, compared with RMB 275, getting from the same period of two new to industry.
Speaker Change: non-GAAP net income amounted to RMB 1.39, Eddie compared with RMB, three 6 billion from the same period opportunity industry.
Speaker Change: Shifting to cash flow and balance sheet metrics.
Realize the net operating cash outflow of RMB 950, many who are largely due to the seasonal empower the bonds payments during Q1.
Speaker Change: Part of that.
Speaker Change: A thorough 202 2 million allocated towards share repurchase.
Speaker Change: Cogent.
Speaker Change: Our total cash liquidity rich ex cruise customer deposits payable reached RMB 75 points.
Tao Xu: This year, the e-commerce market remains challenging, and internally, this is the year we will increase our strategic investment. Despite this as a circumstance, we remain committed to enhancing shareholder return, refining the communist capital structure, and optimizing capital operations. Our goal is to provide shareholders with consistent returns, enabling them to navigate the economic cycles alongside us. Our actions demonstrate that we have delivered on our promise. Throughout 2023, we allocated around US$790 million to the shared buyback program and recently completed the payment of the final cash dividend plan, distributing around US$400 million in aggregate.
Speaker Change: This year, if the market remains challenging.
Speaker Change: That's a year way well increase our strategic investments.
Speaker Change: This is a circumstance.
Speaker Change: We remain committed to enhancing shareholder returns refundings economy type of structure and optimizing capital accretion.
Speaker Change: Our goal is to provide shareholders with consistent returns.
Speaker Change: Enabling them to navigate the economy cycles alongside or.
Speaker Change: Our actions demonstrate that the way how did the neighborhoods of apartments.
Speaker Change: So all of the changes in this way, we allocate the wrong U S. Dollar 719, netting to the share buyback program and the recently completed the payment of the final cash dividend.
Speaker Change: It's beauty around U S dollar for the meeting in aggregate.
Tao Xu: Our total shareholder returns from repurchase and dividends significantly exceeded our net income, accounting for around 159% of our net income in 2023. In 2024, as of May 10, we have allocated around US$344 million for the share repurchase, and the number of the repurchased shares accounted for around 2% of the total number of shares at the beginning of the year. This year, we are focusing on strategic investments to expand our store network, enhancing training for front-line service providers, iterating product technology, upgrading card services, and improving the middle-to-back office operations for our emerging business.
Speaker Change: Our total shareholder return from repurchase and the dividend significantly you'd see it exceed all with Nike com.
Speaker Change: For around 159% of all the net income.
Speaker Change: Mystery.
Speaker Change: Infinity pool, that's often maintained we have allocated around just below $344 million for the share repurchase.
Speaker Change: The repurchase of shares accounting for around 2% of the total shares at the beginning of the year.
Speaker Change: This year, we're focusing on strategic investments to expand our store network.
Speaker Change: <unk> training for the pump length of its providers.
Speaker Change: Iterate the product technology, Ocwen caught activities that the input to middle to back office operations for emerging ethnic.
Tao Xu: This initiative requires more efficient financial management. As such, we are committed to supporting our business in optimizing financial resource allocation and making every effort to help our business achieve long-term development. Simultaneously, we will maintain our high standards for risk management and capital allocation efficiency to ensure our investments generate better returns in the future and create long-term value for our shareholders. Thank you. Operator, we can move to the Q&A session. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.
Speaker Change: This initiative required notification that the initial maintenance.
Speaker Change: We are committed to supporting our business and optimizing financial resources allocation, and then making athletes to hop out of the business to achieve ludington give vitamins.
Speaker Change: Simultaneously.
Speaker Change: Well maintain our high standard for risk.
Speaker Change: Management and the capital allocation efficiency to ensure all reinvestment generate better returns in the future and to create long term value to our shareholders. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay, we can move to Q&A session.
Speaker Change: Thank you if he wants to ask a question. Please press star one on your telephone unlike their name.
Speaker Change: If you wish to cancel your request please press star two if.
Operator: If you are on a speakerphone, please pick up the handset to ask your question. As a reminder, we only accept questions on the English language line. For the benefit of all participants on today's call, please limit 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 an English translation. Your first question comes from Sophie Xiaodan Zhang with CICC.
Speaker Change: You're on a speakerphone please pick up your handset to ask your question.
Speaker Change: As a reminder, we only accept questions on the English language side, but the benefit of all participants on today's call. Please limit yourself to one question unless you have additional questions.
Speaker Change: If you are going to ask the question in Chinese please follow up with an English translation.
Speaker Change: Your first question comes from Southeast Adam Zhang with CIC.
Xiaodan Zhang: Good evening, management team. Thank you for accepting my question. I have two questions to ask.
Speaker Change: Hey, Glenn It's Alicia Hagen said, social it's Oh can I don't know that Mr. Johnson.
Xiaodan Zhang: The first one is about the overall market. I would like to ask the management team to share what you think about the effect of the recent policy launches and the change in the activity and supply-demand structure of market transactions. What should we expect about the market trend in the future? The second question is about customers. With the rise of self-media within the short video, we see that the channels of customers for real estate agents are becoming more diversified.
Do you guys have plenty of junkie that should help Joe Johnson, Glenn as Ofer Shay will go to.
Speaker Change: Thank you good evening <unk> Dow Jones for yourself, what you just said.
Speaker Change: Two quick ones should circled up yeah.
Speaker Change: And then my dad shareholder should also show them quite a bit.
And then Joe will then going Holdco after that that ship since I know, that's what makes it so well.
Speaker Change: Hello folks that go into the polka CIT, all that Delek and janitorial.
Speaker Change: Goldstein, who hooker hot about what's there now.
Speaker Change: It does seem from social J told them kind of have broad okay by showing it that.
Speaker Change: George This is Jim Sheehan hydrogel called clubs now goldfish about holidays, I Shaquille quad attention on their own.
Speaker Change: Second quarter total tobacco.
Speaker Change: <unk> had essentially no doubt on that.
Xiaodan Zhang: How should the company better grasp online traffic? Especially in the area of real estate sales, we see that many developers are also using some new media platforms to attract customers. Should the company consider making more investments in video products and content to better control the traffic on the platform? Let me quickly translate my question. Thanks, management, for taking my questions. I have two questions here.
Speaker Change: Crestwood to phase out at once.
Speaker Change: So thanks management for taking my questions and I've got two questions here first of all could you. Please share your views are ration policies as well as market outlook and secondly answer customer acquisition channels are becoming christianly divers for real estate agencies. How are you going to ensure your efficiency in our traffic acquisition and <unk>.
Stanley Yongdong Peng: First of all, could you please share your views on recent policies as well as the market outlook? And secondly, since the customer acquisition channels are becoming increasingly diverse for real estate agencies, how are you going to ensure your efficiency in online traffic acquisition? And especially regarding the new home transaction services, developers have started to allocate part of their sales and marketing budget to emerging media platforms. So I wonder if the company has considered investing more in video-based products or content to better reactivate the unused traffic. Thank you.
Speaker Change: Specialty regarding the new home transaction services on developers started to allocate part of their sales and marketing budget on emerging media platform. So I wonder if the company has considered about investing more in video based products are content to better reactivate a huge traffic. Thank you.
Stanley Yongdong Peng: Thank you so much for your first question. Despite ongoing price adjustments in the international market, the overall transaction volume has remained relatively stable. The market performance in some cities even exceeded expectations, which made us cautiously optimistic about the future existing home market. Nevertheless, the new home market is still somewhat sluggish with the rollout of the policies aimed at inventory reduction. We anticipate improved liquidity on the new home market supply side and a recovery in market confidence. Let me give you some further elaboration.
Speaker Change: Thank you Sophie regarding your first question.
Speaker Change: Despite ongoing adjustment into the whole market. So overall transaction volume has remained relatively stable.
Speaker Change: The market performance in some cities even exceed it.
Speaker Change: Vacation, which neither of us cautiously optimistic about the future and the whole market.
Speaker Change: Nevertheless, the new home market as do some somewhat sluggish, but they'll go out until the policies and inventory reduction we anticipate the improved the liquidity and yield.
Speaker Change: Home market supply side.
Speaker Change: Recovery in market confidence.
Speaker Change: Let me have it.
Speaker Change: For the elaboration.
Stanley Yongdong Peng: Regarding the policies in this year, the policies can be classified into three categories. Firstly, policies aim at releasing and attracting buying power, such as the consolidation or the optimization of the purchase restriction in cities like Hangzhou, Chengdu, and Shenzhen and removing the minimum mortgage rate. Secondly, policies facilitating the sale of old homes for new ones and the government buying unsold homes to help address human trafficking. Policy to Optimize the Supply of New Homes, such as a Directive to Limit Residential Land Supply in Areas with a high unitary level.
Speaker Change: The policy at the inkjet year, so pocket policies can be classified into three categories.
Speaker Change: Firstly policies and.
Speaker Change: Really soon and are attracting buyers are buying.
Speaker Change: Buying power such as the cancellation of the optimization of the appropriate restricting you stated like Hangzhou Chengdu and shouldn't it.
Speaker Change: Moving the minimum mortgage REIT, secondly policy with that.
Speaker Change: We are taking the old homes when you won.
Speaker Change: The governments buy homes Jihad with you've got inventory.
Speaker Change: Certainly policy to optimize the supply of new homes as I've tried to direct you to the meet the residential land supply area.
Speaker Change: With the high inventory levels.
Stanley Yongdong Peng: Those policies are very supportive to the housing market. Since the beginning of the year, PTV4 in-home has remained largely stable, although not matching the higher base set by the release of the pandemic among the first quarter line. It also shows the recovery in March of the Spring Festival, followed by a normal seasonal adjustment in April.
Speaker Change: Those policies.
Speaker Change: Got a very supportive to the housing market.
At the beginning of the year P T V.
Speaker Change: Hi.
Speaker Change: The remains largely stable.
Speaker Change: Although not matching the higher paid that's about the release of the pent up demand in the first quarter last year.
Speaker Change: It also had this shows to recover much of the spring Festival.
Speaker Change: Followed by a normal seasonal adjustment in April.
Stanley Yongdong Peng: In April, the number of existing home transactions on our platform did not experience a rapid decline since the same period of last year. [inaudible] recording a year-over-year increase of 14% in cities such as Shanghai, Shenzhen, Nanjing, Hanzhou, Changsha, Wuhan, and Xiamen.
Speaker Change: April the number of units being home transactions all of our platform.
Speaker Change: Spirit the rapid decline in the same period of last year is that.
Speaker Change: Recording of year over year increase of 14%.
Speaker Change: It is such as Shanghai Shenzhen.
Speaker Change: 19.
Speaker Change: Hangzhou tongue Shah Honda Xiaomi, so the notable increase.
Stanley Yongdong Peng: So the notable increase, at the same time. The recent trend indicates that the weekly transaction volume has not continued to decline sequentially. The total number of in-home transactions on our platform increased by over 20% year-over-year for the first three weeks of May, while the GTV increased by over 10%. Harrison The level of the decline from the higher base in the same period of last year.
Speaker Change: At the same time.
Speaker Change: The recent trends indicate that the weekly transaction volume has continued to decline sequentially.
Speaker Change: Total number of new home transaction all of our platform increased by over 20% year over year for the fourth three weeks of May.
Speaker Change: While the G. T V you can spell where 10% tariffs and the level of the decline from a higher pace through the same period of last year.
Stanley Yongdong Peng: Meanwhile, existing home prices are still in discussion, while the market is in a state of decreasing prices for increasing volume. Looking at the leading indicators, I propose the volume of the home tours will be higher than last year's average, indicating that buyers are actively seeking to purchase homes. Meanwhile, so far this year, the growth rate of both month-over-month and year-over-year listing home listings in the top 50 key cities has slowed down. Unlocking the Temple of Love, went the numbers of listing search under the more policy loosening. There has been no similar survey in this country.
Speaker Change: Meanwhile, we're just seeing home prices are still you dip documents.
Speaker Change: Whilst the market you know.
Speaker Change: First off with decreasing price for increasing Bonnie.
Speaker Change: Looking at the leading indicators.
Speaker Change: I suppose the voting of the home truth.
Speaker Change: While higher than last year's average.
Speaker Change: Indicating that the buyers are actively seeking to purchase homes.
Speaker Change: Meanwhile, so far this year.
Speaker Change: With rates off of both month over month, Yeah, we are eating at home listing.
Speaker Change: Top 50 key city hub.
Speaker Change: How about a slowdown.
Speaker Change: Back in September of last year.
Speaker Change: With numbers of leasing search under the mole policy loosening.
Speaker Change: There has been no similar 30 this year.
Stanley Yongdong Peng: Overall, people in the market have become more rational in terms of the transaction structure. The proportion of home purchases by first-time buyers has increased in the short-term, rising from around 30% to around 35%. This is partly due to the press adjustments and the easing policy, which have lowered the barriers and the cost for buyers, who need to like a school enrollment for their kids or the residential permit with registration.
Speaker Change: Overall people into the market has become more rational.
Speaker Change: In terms of the transaction structure.
Speaker Change: Proportional to home purchase by the first time buyers.
Speaker Change: Great infrastructure.
Speaker Change: I think from around 50% to around 55%.
Speaker Change: This is partly due to the price adjustments that you can policies.
Speaker Change: Which have a lower the barriers in the car buyers.
Speaker Change: Which need to like a school enrollment without key or the rest of the residential permit the registration.
Stanley Yongdong Peng: In addition, issues with new home pre-sales, lack of effective supply, and a trend towards luxury housing have pushed some first-time home buyers out of the new home market. However, positive trends in first-time buyers entering the market are also aiding at the front end of the housing upgrade trend, increasing the customer accumulation and activation on your home market. The new home market continues to see weakness in supply and demand, with low expectations. From January to April, the CTV of 1,200 real estate developers declined by around 47% over a year. This is a historical low.
Speaker Change: In addition issues with <unk>.
Speaker Change: New home resell.
Speaker Change: Taking out the effective supply and trying to work with luxury housing about pushing shrunk first time homebuyer also for the new home market.
Speaker Change: Positive trends in the first time buyer answering the market also aging at the pump and the Halsey upgrade can you.
Speaker Change: Increasing the customer accumulation and the activation.
Speaker Change: When your home markets.
Speaker Change: New home market, continuing to see weakness in supply and demand with loans vacation.
Speaker Change: January to April.
Speaker Change: T V.
Speaker Change: Patrick Wellington you bought it for declined by around 47 over here. This is a historical low.
Stanley Yongdong Peng: On the demand side, potential buyers with home upgrade demand are more focused on large-sized homes. Data from China Index Academy indicates that in key cities, the proportion of new home units with four or more rooms has increased from 21% in 2020 to 25%. Additionally, a substantial demand for other types of new homes is flowing into the single market. [inaudible] in light of setting new home sales, developers are adopting a pre-eccentric business strategy, getting back from the land auction, and Project LAUNCH with insufficient new effective supply and high unitary levels at the end of March 2024. CRRC data showed that the average in-between turnover period for new homes in 80 cities was extended to 24.4 months.
Speaker Change: You bumped that potential buyer with home upgrades demand a more full because all locked at home.
Speaker Change: Data from the China Index Academy indicate.
Speaker Change: Okay.
Speaker Change: The propulsion or the new home unit, whereas the full or maroon has increased from 21% in 2020% to 25% this year.
Speaker Change: Another substantial.
Speaker Change: Digital demand for auto type of new homes is flowing into the existing home market.
Speaker Change: On the supply side.
Second new home sells the vipers are adopting pretty cyclically.
Speaker Change: Strategy.
Speaker Change: Getting back from the land auction.
Speaker Change: And Oh lunch.
Insufficient immune factory supplier in the high inventory levels.
Speaker Change: End of March and we can move forward.
Speaker Change: Although they are the data showed that the average into each hour to it with a new homes and a T. C. D E N D to a 24 four months.
Stanley Yongdong Peng: With the strengthening of policy, we believe that the expectation for the new home market will improve. For your second question, this year, one of Faker's key focus areas is the construction of online infrastructure as a customer front-end and business needs acquisition. In the past, we firmly invested in solving the ten points that customers encounter when actively searching for homes through our authentic listing and home listing centric emphasis. Also includes Barrett March.
Speaker Change: With the strengthening of the policy.
Speaker Change: Was that the expectation for the whole market will improve.
Speaker Change: Flu second classroom Tcf.
This year one of <unk>.
Speaker Change: The key focus IRA.
Speaker Change: Traction online.
Speaker Change: Infrastructure as a customer or a phone that underpins. This nice acquisition in the past we formally to you, but it's the.
Speaker Change: Insulting to pinpoint the customers and conquer with actively searching for homes through our authentic lifting under home leasing centric emphasis.
Speaker Change: Baroness market.
Stanley Yongdong Peng: Customers have a wider range of choices and a longer decision-making period, making it even more crucial to start from the customer's perspective. We aim to provide real and effective information and better understand and translate customer needs. Therefore, we are updating our ways of connecting with customers, our service models, and the online contact that they would provide. Regarding the user connection method, previously, users would only connect with us on our app when they needed it.
Speaker Change: Customers have a wider range over twice as long.
Speaker Change: Longer decision, making period, making you to.
Speaker Change: Even more crucial to start from the customer perspective.
Speaker Change: We're aiming to provide that the rail and the fact that information and to better understand and translate the customer need. So therefore, we are updating our ways of connecting with customers all the service models and the online content.
Speaker Change: That's the way.
Speaker Change: Alright.
Speaker Change: Regarding the use of connection massive previously youth or was it only connect with the Oh a P. P. When they need it now we have I do it well.
Stanley Yongdong Peng: Now, we have added ways to connect with users, hoping to better utilize both internal and external traffic channels to proactively reach out. For example, we use live streaming and short videos, which are better than user headers in terms of the service model. We are making the service provider, rather than the house itself, the first online contact point for the customer. We believe that only by doing so can we better explore and understand customer needs and provide better services. Based on this approach, we have introduced new online roles for service providers, such as streamers.
Speaker Change: Oh, I can wait to connect with users hopping to better utilize both internal and external traffic channels to proactively reach out to say for example, we use a.
Speaker Change: A lot of scrutiny on the show the video, which better language user habits.
Speaker Change: In terms of the service models.
Speaker Change: We are making service provider rather than the house itself.
Speaker Change: Online content points just for the customer.
We believe that only by doing so.
Speaker Change: The bathrooms bowl and understand customer needs.
Speaker Change: And to provide the type of services.
Speaker Change: I'm just approach we have a huge skew the new all Ngos or the service provider.
Speaker Change: Outside the streamers.
Stanley Yongdong Peng: House Selection Consultant, Jethro, Help Build Personal Brands and Attract Customers on the content front. In addition to the shelf-style information display, we have diversified our content, including market trends in commercial areas, land auction information, and property analysis. We expand property listings and provide professional home buying consultation services, social videos, and live streaming. One of our initiatives is the Galaxy Plan that our chairman introduced in his letter, which aims to cultivate new media talent from the store owners and agents on our platform.
Speaker Change: Election consultant.
Speaker Change: Wrote how beauty personal bryan's done by truck customer.
Speaker Change: On the content front.
Speaker Change: In addition to sharper scale information display we have a diversified all border countries, including market trends in commercial eyewear.
Speaker Change: Auctions information under property analysis.
Speaker Change: We use them properly listed under provides professional home buying consultation services social videos live streaming.
Speaker Change: One of our initiatives.
Speaker Change: Got it that's that's all we're chairman excuse me and.
Speaker Change: Sector, which aims to.
Speaker Change: Calculate that new media talent from the owners on agents all the platform.
Stanley Yongdong Peng: Helping them acquire customers through short video and live streaming on external video platforms. Enhancing both agent and platform transaction activity. Currently, the tax planning bill covers 63 cities nationwide, empowering a total of over 12,000 people. The influencer network has accumulated tens of millions of followers, with more than 600 agents having over 10,000 followers each.
Speaker Change: Helping to acquire customers and so it will show the video and live streaming.
Speaker Change: Video platform enhancing both agents on the platform transaction activity.
Speaker Change: Currently that's been baked who'll cover the six series city National White.
A total of over 12000 people.
Speaker Change: Fluke network had the accumulated tens of millions of followers.
Speaker Change: With more than 600 agent, having over 10000, the pole or each.
Speaker Change: The fourth quarter opportunity can be for a total of over 2000 of halting production well.
Stanley Yongdong Peng: In the first quarter of 2024, a total of over 2,000 housing transactions were achieved by the influencers through new media customer acquisition, increasing by 103% year over year. We have also established a comprehensive employment system for online influencers, including online and offline training systems and a mentorship program. This system covers the various stages of employment, from the current incubation to long-term operational efficiency and efficient conversion. In terms of content, Baker's massive housing resources provide strong content support for the agency.
Speaker Change: T by Sofia influenza, so with the new media customer acquisition.
Speaker Change: Increasing by 103% year over year.
Speaker Change: We have both establish.
Speaker Change: Hudson problem in system.
Speaker Change: On a like influenza.
Speaker Change: Voting online offline courses system.
Speaker Change: Hunter sheet, PROQUAD Justice and colors, the various stage of empowerment problems com you can patients to long tail accretion that they seem to be fishing in conversion.
In terms of the content.
Speaker Change: Matsui Hudson resources, a lot of strong conklin support for agents.
Stanley Yongdong Peng: Meanwhile, we employ agents to improve their online influence through various methods, such as sector management, property valuation, dynamic maps, and skills in popular tools and also copyright. We also grade accounts based on indicators, such as the follower's number, conversion rate, and performance matching with their traffic support and other incentive mechanisms to give more streamers sustainable growth and long-term return opportunities. Thank you.
Speaker Change: Well, bringing Paul agents to improve their online offering so it's a very massive as I've tried to sector analysis poverty evolution.
Speaker Change: And then make mad.
Speaker Change: <unk> popular tool.
Speaker Change: Also the copyright.
Speaker Change: Were also great news accounts based on bidding behavior, such as the polo or number <unk>.
Speaker Change: Commercial REIT and.
Speaker Change: Performance matching with their traffic support and other incentives Kensington to give a more extreme or sustained growth.
Speaker Change: And rich opportunities. Thank you.
Speaker Change: Yes.
Timothy Zhao: Your next question comes from Timothy Zhao with Goldman Sachs.,, First, I would like to talk about our investment in E- this year. What is the focus of the first round of investment? As a management team, how do we measure the effect of this part of the investment? I remember that the company said earlier that this year it hopes to improve the number of its online stores. So what is the current update like?
Speaker Change: Your next question comes from Timothy Zhao with Goldman Sachs.
Speaker Change: Yeah.
Glen: Go ahead Glen it's on to show that human knowledge of annual Dr. Cohen.
Speaker Change: Do you guys still going to women's and yet you said I'll deal with the toll ruling that constantly.
Speaker Change: So we'll continue to quote you said I'll talk a little against the Naughty No I am sorry go ahead telamon rule on telephone Poles to Sogou.
Speaker Change: Switching gears just to volunteer shown what may be a long term agenda.
Speaker Change: Now Mr. <unk> go.
Timothy Zhao: How do we think about whether the increase in the number of stores will affect the efficiency of our existing stores? This is the first question. The second question is about the new house. Please share with us your expectations for the new house business. The first quarter is a relatively weak season and has some one-off effects.
Speaker Change: So let me answer that.
Tony: Thank you Tony limits in our coach controlling women's amateur Siaka cool agenda on the outwardly yellow me youll get into Saudi not just humans.
Speaker Change: Jovan you sure you're going to see stiff on Japan.
Speaker Change: With all this element do you jump on yet.
Speaker Change: Now <unk> got something to be celebrated pizza.
Timothy Zhao: Please share with us your expectations for the new house business in the second quarter and after that. Now, I'm going to quickly translate it for you. Thank you management for taking my question. I have two questions here.
So that change by itself.
Speaker Change: Would you argue to let Joel talk.
Speaker Change: Go ahead I'll deal with it.
Scott: Thank you Scott.
Speaker Change: Thank you management for taking my question I have two questions here. The first one is regarding our <unk>.
Timothy Zhao: The first one is regarding our Investments into the core home transition business. Just wondering if management could share any color on what our key focus is, what we have here in terms of investments, and how we will evaluate our ROI on investment?
Speaker Change: This message into our core home system.
Speaker Change: Just wondering can management share any color on what is how can you forecast what is here in terms of investments in the how to evaluate the ROI of the investments and we used to mention that this year are allowed to keep okay says to him Chris and number of connect his stores. Just wondering what is the latest updates and how to think about.
Tao Xu: And we used to mention that for this year, one of the key focuses is to increase the number of connected stores. I was just wondering what the latest updates are and what you think about the efficiency impact on the existing stores from increasing the connected store numbers? And the second question is on our outlook for new home sales, or the new home GTV on the platform after a relatively weak first quarter. Just wondering what your outlook is here? Thank you. Yes, thank you, Timothy.
Speaker Change: That finishes the efficiency impact.
Speaker Change: On the existing stores from the equator, probably increasing that his door number and the second question is on our outlook for the new home sales New home GTA V. On the platform. After a relatively weak first quarter I'm. Just wondering what is your outlook here. Thank you.
Tao Xu: For your first question, this year, we are majorly focused on growth with enhanced quality and efficiency in our housing transaction business, actively connecting with more high-quality brands, stores, and agents. It's one of our main investment directions. The results have surpassed our expectations in both skill and efficiency.
Speaker Change: Yes, I can see Oh for your first question you can see here, we are a major focus on the growth or is it even has a coffee and the efficiency with our Halloween business.
Activate 19 with more high quality, Brian stalls and the agent is a one off or a mini investment directions.
Speaker Change: The results have us of past hour issue in both scale and efficiency.
Tao Xu: On store connection, we have been proactively connecting stores to our network since September last year. By the end of the first quarter, the number of active stores increased by 1.4% compared to the previous quarter. In addition, over 1,000 new stores, including those being prepared for opening or funding, were added during the first quarter. The 90 days retention rate of those newly connected stores remains at a high level of around 98%. Our market penetration has further improved, showing considerable gains in cities, for example, in Ningbo and Yantai. Regarding efficiency, we have not lowered the entry barrier or the threshold or so-called sacrifice quality for the sake of dysfunction.
Speaker Change: All installed connection we have been proactively 19, whereas the stores to our network since September last year.
Speaker Change: And over the first quarter the number of active stores increased by one 4% compared to the previous quarter.
Speaker Change: In addition over 1000, new stores, including those being prepared opening or funding the flits quota.
Speaker Change: The 90 day retention rate of those newly connected store remains at a high level off around the 8%.
Speaker Change: Our market penetration for the improvement showing considerable skin in cities for example in <unk>.
Speaker Change: Boy you in time.
Speaker Change: Regarding the efficiency, we have not lowered entry barrier.
Speaker Change: Good.
Speaker Change: Oh, so close towards sacrifice Corgi also for the sake of east function.
Tao Xu: The average number of agents per new store is slightly lower than that of the platform, but the efficiency of newly connected stores continues to rise rapidly. For the stores connected since last September and up to March of this year, the average revenue per store increased by 100% within six months of the operation. Moreover, by the end of March, the productivity per agent in these newly signed stores reached over 90% of that in the existing stores on the platform.
Speaker Change: Average number of agents per new store is slightly lower than that helped the platform is in stores, but they can maintain steady growth.
Speaker Change: The efficiency of Munich next stores continuing to rise rapidly.
Speaker Change: Well the stores Tonight.
Speaker Change: Lots of timber and off to March of this year the average revenue per store.
Speaker Change: <unk> by 100% within six months of the accretion. Moreover.
Speaker Change: As of March the productivity per agent in this newly signed stores reached over 90% of that.
Speaker Change: Installed praful.
Tao Xu: In addition, we are seeing that in the newly-connected stores, some small stores, such as family-operated stores with around two agents, have performed well due to their deep community involvement, especially considering per capita efficiency. For example, within three months of connecting to the network, the agent productivity in those small stores was 16% higher than the average agent productivity of stores connected during the same period. Those competitive small stores also inspire us to further connect with the various types of stores, enhancing our ability to serve them on the platform.
Speaker Change #100: Yeah, a decent way a theme that the newly connect stores some of the most stores such as family operated stores with the wrong, but Sweden outperformed well due to the deep community in Beaumont.
Speaker Change #101: Ashley consider input Cathay deficiency.
Speaker Change #100: Looking through the mountains, so connecting to the network.
Speaker Change #100: But that keeps you more stores or the 15, plus a higher average of eight in perpetuity almost all connect during the same period.
Speaker Change #100: Those competitive.
Speaker Change #100: Most stores also use bearers to further connect with the various type of stores enhancing all the ability to serve the other playful.
Tao Xu: We aim to implement more refined store tier management. We also achieved better than expected ROI for those investments. Overall, in this perspective, the stores newly connected in Q4 2023 will achieve a positive ROI by March. In supporting our goals at scale, we are also very cautious with our investment strategy. We primarily provide performance-based support, such as funding, storefront renovation, and business development to newly connected stores rather than increasing personnel. This ensures flexibility in our investment and streamlines our operations.
Speaker Change #100: We aim to implement more refunds stores theater measurements.
Speaker Change #100: We also achieved better things back or what that's meant for.
Speaker Change #102: So overall, it's back to the stores Munich, Nike, Inc. Q4, two meter mystery achieve our pulp to our what by March of this year.
Speaker Change #102: In supporting articles and scale, we're also very cautious with all the investment strategy.
Speaker Change #102: We primarily provide performance based support such as the funding still problems with innovation and business development that junior knickknack stores, rather than increasing personnel.
Speaker Change #102: This ensures that flexibility.
Speaker Change #102: Mint and streamlines our operation.
Tao Xu: For your second question, the new home market has remained tough since the start of the year. In Q1, our new home GTV, which was RMB 151.8 billion, a 45% drop year-over-year, but still better than the market, running from new home transactions was RMB 4.92 billion, down 41.5% from the same period of last year. This smaller decline compared to the PTV shows our stronger monetization capability.
Speaker Change #103: For your second question.
Speaker Change #103: The new home market has remained tough since start of the year in Q1.
Speaker Change #103: Our new home CTV, rich RMB, $151, 8 billion or 45% drop year over year, but you better to the market.
Speaker Change #103: Revenue from new home transaction with the RMB.
Speaker Change #103: RMB Ballpoint 1930 down 41, 5% from the same period last year.
Speaker Change #103: A smaller decline compared to the P. T V shows all of our stronger monetization capabilities.
Speaker Change #103: Yeah.
Tao Xu: We believe our new home business will continue to show greater resilience and solid performance. In Q1, we showcased this strength in multiple ways. Number one, we made a significant breakthrough in our channel service operation capability. This year, the number of developers that achieved strategic cooperation increased by 20% from the same period last year, and the quality of those collaborations continues to improve, as we fund our coverage to most core and large-scale state-owned developers. We have already established Strategic Partnerships with six out of the top 10 developers. Those high levels of in-depth cooperation have facilitated our local teams to more actively pursue regional business development.
Speaker Change #103: We believe our new homes business, well continue to show greater resilience and a solid performance.
Speaker Change #103: In Q1, we showcased the strength in multiple ways.
Speaker Change #103: Our number one we made a significant breakthrough in our channel service operation capabilities.
Speaker Change #103: This year the number of devices that are.
Speaker Change #103: The strategic cooperation increased by 10, 2% from the same period of last year.
Speaker Change #103: The quality of those collaborations continue to improve.
Speaker Change #103: We are expanding our coverage to most corn there lots of Skus state owned.
Speaker Change #103: We have already established.
Speaker Change #103: P J policy with the six of the top of the ticket Vipers.
Speaker Change #103: So high level English call accretion and facilitates our local teams to more actively pursue original.
Speaker Change #103: These functions.
Tao Xu: We also made a new pursuit in our cooperation terms. This includes not only strategic initiatives from the past but also new guaranteed payment terms that ensure improved cash collection from our new home business. Based on those improvements, our New Home Cooperation project coverage ratio was 55% in Q1, an increase of 25% year-over-year. This has also led to a more stable supply of new homes. Number two, regarding our channel sales tool capability, as I mentioned earlier, we integrate our new and existing home business to develop an innovative model that makes it easier for consumers to replace their old apartments with new ones.
Speaker Change #103: We also made a new brick soon in all of our call appreciate termed.
Speaker Change #103: This includes not only strategic miscue from that part, but also the new guaranteed payment terms so being sure to include the cash collection from <unk>.
Speaker Change #103: Our new home business.
Speaker Change #103: Based on those improvements all of our new home calibration project coverage ratio was at 55% in Q1.
Speaker Change #103: An increase of 25% year over year.
Speaker Change #103: It also led to a more stable supply of new homes.
Speaker Change #103: Number two regarding all we're trying to sell it to a capability.
Speaker Change #103: I mentioned earlier, we integrate all of our new in its new home button. It took you by the way to model it doesn't make it easier for consumers to replace their older apartment with new one.
Tao Xu: Considering customer needs, we also introduce a service like value-free repayment and carefree renovation. We are collaborating with developers, banks, and others to boost new home sales and address customers' home purchase challenges. Number three, we also strictly adhere to risk control and business management. In Q1, new home DSO was 69 days. The commissioning of Wang's model covered 46 percent of the total commission, being at a high level. The percentage of commission from my 4E developers remains high, at around 50%. Thank you. Your next question comes from Griffin Chan with Citi. I would like to thank Guan Yichen for giving me the opportunity to ask a question.
Speaker Change #103: Considering the customer need we also use excuses service like Barbie free repayment and a coffee renovation collab.
Speaker Change #103: Collaborating with food banks and other two both new home sales and their trust customer home purchases tenders.
Speaker Change #103: Number three we also speak they are cared for the risk control on the Victor I mentioned that in.
Speaker Change #103: In Q1, New homes Yahoo was 69 days the commissioning of the once motto cover the 46, the total commission fee.
Speaker Change #103: At a high level the.
The percentage of commission for my phone.
Speaker Change #103: Yeah.
Speaker Change #103: Hi.
Speaker Change #104: 50%. Thank you.
Speaker Change #105: Your next question comes from Griffin Chen with Citi.
Speaker Change #106: That said going from Delek cylinder gutsy now Lindsay shebang amendments.
Griffin Chan: My question is about renovation. We can see that there are new policies for housing renovation in different places. I would like to ask Guan Yichen to share his thoughts on the overall improvement of housing demand and the market for shell as new and durable housing. How will leaders participate in the policy of changing the new policies and activities?
Speaker Change #107: Amendments can now go to the new issue tweaks like coupons Joe.
Speaker Change #108: Thanks Anthony.
Speaker Change #110: Contact at <unk> to fund should show that you can not only shop ebay consolation complex right now.
Speaker Change #109: Uh huh.
Speaker Change #111: Please go ahead Joe.
T J I don't know Sam Thanks management for taking my question. My question is about home replacement policy. The whole governments real doubts were patient and policies to support earthquake demand how doesn't mentioned and view the effect on overall housing demand and how we will bake that as a service data in the new and existing home market two parts.
Griffin Chan: Thanks, management, for taking my question. My question is about home replacement policies. Local governments have rolled out replacement policies to support upgrade demand. How does management view the effect on overall housing demand and how will Baker, as a service leader in the new and existing home market, participate? Thank you. Thank you, Harry.
Joe: Thank you.
Stanley Yongdong Peng: For policy on inventory reduction, everyone is very focused on the inventory reduction or so-called de-stocking policy, which is the party of pro. In response to evolving supply and demand dynamics, the de-stocking policy has been reintroduced since its last implementation in the year of 2016. A new round of inventory reduction efforts is expected to help rebalance market supply and demand, and InfoMarketSentiments will also stabilize the price system in the market. It will also help developers sell inventory and input liquidity, supporting digitalization in the new home market and ensuring project completion. Government-led repurchase of homes for the conversion into affordable housing will also better meet the housing needs of new urban residents. However, currently, the relevant supporting policies are still in the formation stage.
Thank you Harry.
Speaker Change #113: Full path.
Speaker Change #114: Two reduction are ones that are focused on the inventory reduction or so called Destocking policy.
Speaker Change #114: Which is the patio approach in response to evolving supply and demand in that market.
Speaker Change #114: Destocking policy has been read excused synthes lost tissues into Europe with 2016.
Speaker Change #114: They'll be them through a doctor efforts. This is back to healthy balanced market supply and demand.
Speaker Change #114: Improved market sentiment also stabilize the prices in the market.
Speaker Change #114: It will also help to buy.
Speaker Change #114: So humans right.
Speaker Change #114: Further liquidity supporting stabilization is the new home market and ensuring project completion.
Speaker Change #115: If I'm allowed to repurchase of the homes for the conversion into affordable housing.
Speaker Change #116: I'll also back for a minute how can meet the new urban resident.
Speaker Change #117: Currently the relevant supporting policies asked you in the formation stage for example, the Central Bank was 231, Ingrid hunting fonts to support local governments in Macquarie.
Stanley Yongdong Peng: For example, the central bank will provide 300 billion yuan in lending funds to support local governments in acquiring some unsold homes and converting them into affordable houses. More time is needed to observe the scope and impact of this policy's implementation. Another one is the major policy innovation this year regarding the de-stalking is initiatives to encourage residents to replace their old homes with new ones. This is the first time a party has been linked to a privacy-independent decision on the new homes market.
Speaker Change #117: Sold homes under to convert them into affordable housing.
Speaker Change #117: Multimillion gated to the scope and impact of this policy implementation.
Speaker Change #117: The other one is the major policy innovation. This year regarding the Destocking is our initiatives to encourage westin to replace they are oh homes with new ones.
Speaker Change #117: This is the first time a policy at the link to probably stay independent if the team and the new homes market.
Stanley Yongdong Peng: This is intended to stimulate transactions and contribute to the stability of the market going forward. As of now, over six cities have introduced a housing-out-for-new policy, generally falling into two categories, that is, brokerage agency-led models and government-led models, to the subsidy of the acquisition of the old homes through the state-owned enterprise of developers. Regarding Baker's participation and opportunity, we would like the World Developer Agent and the Homebuyers Agreement and also under this. This model promotes old homes and barracks, locking in the new homeless.
Speaker Change #117: This is intend to stimulate the transactions.
Speaker Change #117: Contribute to the stability of the market going forward.
Speaker Change #118: I just know over they had excuse the housing old for new policies.
Speaker Change #118: Generally fall into two categories.
Speaker Change #118: It's a brokerage agency led models and the government in that model.
Speaker Change #118: No.
Speaker Change #118: The subsidy or the acquisition of the old homes. So the state owned enterprise.
Speaker Change #118: Yes.
Speaker Change #118: Regarding the bakers participation opportunities.
Speaker Change #119: Oh relax they are.
Speaker Change #119: We're developing regions and the homebuyer under agreement and also although it.
Speaker Change #119: Just a model.
Speaker Change #119: This well promoting the old homes under fire logging the new home listening.
Stanley Yongdong Peng: We have been deeply involved in and actively promoting this implementation. We pioneered the old four new models in Qingdao in the year of 2022 in collaboration with developers and the stores on our platform. This initiative brought innovative practice to local governments by accelerating transactions and inspired other city governments and industrial associations to reference and promote the Qingdao model.
Speaker Change #119: We have been plaguing bowls and actively promoting.
Speaker Change #119: <unk>.
Speaker Change #119: We pioneered the old all new models in Qingdao into your opportunity can be true in collaboration with Galapagos under Stolz all of purple.
Speaker Change #119: This initiative bold innovative practice to a local government by activating transactions on the Hudson paired off of this city garments.
Speaker Change #119: Industrial Association to reference and to promote the Qingdao modal.
Stanley Yongdong Peng: In Qingdao, our model has also received government endorsement and substantial support in the form of one-stop administrative services, with our strong capabilities in the in-home sell-through and the courage of the homeowner for the sale one and buy one transaction. We help developers attract additional and incremental buyers to accelerate the sales of new homes and collect back funds, offering a more efficient and lower-rate housing exchange experience to the client. Under our innovative Sell All Homes for New Ones model in Qingdao in the year of 2023, we completed nearly 200 transactions. This tournament deals will be activated under this mode.
Speaker Change #119: In Qingdao our model has also received common endorsements.
Speaker Change #119: It'll support in the form of one store it's P T services.
Speaker Change #119: With our strong capabilities in home sell through on the coverage of the homeowner.
Speaker Change #119: We'll sell one on the biomet transaction.
Speaker Change #119: We hope the buses attract additional and incremental buyer so accelerate the sales of new homes and the clock back phones offering a more efficient and the lower rate housing changes.
Speaker Change #119: To the client.
Speaker Change #119: Although all the way to sell homes for new ones modal teamed up with a year over to meet industry.
Speaker Change #119: We completed nearly 200 transaction original.
Speaker Change #119: It's dorman deals will activate on the system.
Speaker Change #119: Aldo.
Stanley Yongdong Peng: Currently, our such model, known as the variable exchange, has already been introduced in 12 cities. We are also engaging with developers in Mobile City to iterate and innovate on this model. Looking forward, we hope to explore more new methods with the government and developers to accelerate the human-free reduction. Thank you. Your next question comes from John Lam with UBS. Hello, Tao and Stanley.
Speaker Change #119: Currently our model and the like the buttery three change already.
Speaker Change #119: Alrighty being introduced.
Speaker Change #119: Introduced in 12 cities well.
Speaker Change #119: While also engaging with to give out the most state aid to Ada rate and you know it almost as a model.
Speaker Change #119: Looking forward, we hope to eat well no no matter what the garments.
Speaker Change #119: So accelerated the human through reduction thank you.
Speaker Change #120: Your next question comes from Jon <unk> with UBS.
John Lam: I have a question about the new business, the decoration business. I remember you mentioned that this business may lose money in the future. Can you share some highlights and progress of the decoration and housing business? Please translate my question. Thank you, Zhuang.
Speaker Change #121: Tullow is tending to my heart.
Speaker Change #122: Michael Lindsey shocks from recycling.
Speaker Change #124: <unk> seen somebody like you know you know.
Speaker Change #123: He does.
Speaker Change #123: Sure.
Speaker Change #125: Did I get with Alcon on James Allen Klee.
Speaker Change #126: Joshua children, given what you know.
Speaker Change #126: Deal with Asia down Dan can take time.
Speaker Change #126: What do you think kind of things Aldo when T til.
Speaker Change #127: Could management share about them.
Speaker Change #127: The <unk> business and also with the <unk>.
Speaker Change #128: Rental home surfaces business.
Speaker Change #129: In terms of the poll question Russell and the highlights.
Tao Xu: Let me talk about the Home Renovation and Furniture Service. We achieved strong growth in our home renovation and furniture business in Q1. As for scale, our contract sales reached RMB3.4 billion, up 26% year-over-year, with revenue growing by 71% to reach RMB2.4 billion. In March, the total contract sales reached nearly RMB2 billion, up around 53% year-over-year. The March Contract Cells in Beijing achieved a historical breakthrough.
Speaker Change #130: Central drunk, let me talk about the Homerun division a bunch of services.
Speaker Change #130: We achieved strong growth in all of our home renovation the furniture business in Q1.
Speaker Change #130: That's supposed to skew our contract itself reach RMB, three 4 billion opportunity, 6% year over year with revenue growing by 71% to reach RMB two 4 billion.
Speaker Change #130: In March the total contract itself, great nearly RMB 2 billion up from the 53% year over year.
Speaker Change #130: The March contract itself in Beijing achieved a so called brick suite.
Tao Xu: On the operations side, the contribution of the contract itself attributable to the customer referral from our real estate agent in Q1 also hit a historical high. This achievement results from the improvement of our customer acquisition ability and also our stronger delivery capability. Let me elaborate on that. Better integration for our housing construction and home renovation services greatly improves our customer acquisition capability. In 2023, we aligned with our organizational structure, enabling each renovation business unit to work with brokerage stores. In return, the renovation business also helped some home construction.
Speaker Change #130: On the operation side, the contribution of the contract itself attributable to the customer referrals from all the real estate agent and cooler also heat gets to go hot.
Speaker Change #130: This achievement, it's all from the improvement of our customer acquisition ability and also the stronger give every capability, let me elaborate on that.
Speaker Change #130: First pet.
Speaker Change #130: That's integration fall, where a husband transaction on the home renovation services highly improves our customer acquisition capability.
Speaker Change #130: In June the chemistry, we aligns with our organizational structure, enabling each renovation business unit that you work with brokers to stores.
Speaker Change #130: Renovation business also helps on home connections.
Tao Xu: Customers receive a rough plan and are departed for the home renovation before the housing transactions are completed. Our one-stop residential service model is taking initial shape. Meanwhile, improving customer acquisition requires a strong delivery capability. All great efforts in delivery capital over the past few years have paid off, for instance. Our average construction timeline dropped to 104 days in this Q1, decreasing by around 18 days compared to the same period last year. We use a strategy that encourages healthy competition to ensure sufficient labor capability. We also manage key process points strictly, including identifying potential delay risks ahead of time to resolve the problem quickly and avoid delay.
Speaker Change #130: Customers receive a rough path bucket for the home renovation before the housing transaction are completed.
Speaker Change #130: Our one stop rates interest service model, taking initial shape.
Meanwhile.
Speaker Change #130: The improving customer acquisition to acquire the strong delivery kind of down at.
Speaker Change #130: Arc with athletes and delivery capability or the possible either have to pay down.
Speaker Change #130: Instant.
Speaker Change #130: Average constructing timeline dropped 204 days in Q1.
Speaker Change #130: Crazy right around 18 days compared to the same period of last year.
Speaker Change #130: The strategy that the entirety of housing competition to ensure sufficient labor kind of entities.
Speaker Change #130: We also manage a key.
Speaker Change #130: Point is strictly including identifying potential delays.
Speaker Change #130: Ahead of time to rebuild the proppant quickly under a wide delays.
Tao Xu: In this year, while insurance steadily grows in our business scale, we will focus on enhancing quality. By implementing one-stop site management services and online quality control, we aim to proactively prevent issues, reduce their occurrence, and improve customer satisfaction. Regarding the fake rental business, In Q1, Runme from Baker Rental Services reached RMB 2.63 billion, increasing by 189.3% year-over-year, mainly due to the rapid increase in the scale of rental property management services.
Speaker Change #130: This year, well ensure steady growth in all of our business scale very well focus on enhancing quality.
Speaker Change #130: By implementing one stop site measurement services and online call it control with <unk>.
Speaker Change #130: And to proactively prevent issues redo.
Speaker Change #130: With you they are occurring.
The improved customer satisfaction.
Speaker Change #130: Well regarding the pick a rental business.
Speaker Change #130: In Q1 run the firm Baker rental services reached RMB, two 3 billion.
Speaker Change #130: By 189, 3% year over year, mainly due to the breadth of the increasing scale of our rental property management services.
Tao Xu: Under our carefree RANS model, we are managing over 240,000 units by Endoplasmic Q1, compared to over 90,000 in the same period last year. As of now, we have a total of nearly 270,000 units managed by Cafe RUN. The number of units managed under the centralized long-term empowerment exceeded 11,000 by end of Q1, compared to around 7,000 in the same period of last year. In terms of efficiency improvement and operational race control, the Output Tendency Rate for Capital Error Model increased by around 2.7 percentage points year-over-year to 96.5% at end of Q1.
Speaker Change #130: Although our carefree rents module, we're managing over 240, salt that you'll need to Pandora just Q1.
Speaker Change #130: Compared to over 90000 in the same period last year.
Speaker Change #130: Now we have a total of nearly 270, something you'll need magic by a Catholic rights.
Speaker Change #130: The number of units under the centralized longtime apartment exceeded 11000 at end of Q1 compared to around 70000 in the same period last year.
Speaker Change #130: In terms of the efficiency improvements on the operational risk control.
So.
Speaker Change #130: Occupancy rate full copy rights model increased by around two seven percentage points year over year to 90.
Speaker Change #130: One 5% at the end of Q1.
Tao Xu: We significantly reduced the rate of vacancies by increasing coverage of the low-rate care-free model and clearing out a batch of long-term vacancy problems. Also, at the end of the first quota, the occupancy rate of our self-operated apartments that have been opened for over six months increased by around 3.8 percentage points year over year, reaching 94.8 percent.
Speaker Change #130: We significantly reduced the rate of the vacancies by increasing coverage for low rate kind of feed run model and the train hall to backfill for launching Beacon properties.
Speaker Change #130: Also at the end of the fourth quarter.
Speaker Change #130: Please see the rates of ourself operate apartments that have opened for over six months increased by around three eight percentage points year over year, reaching 94, 8%.
Speaker Change #130: Okay.
Siting Li: Thank you. We are now approaching the end of today's conference call. I will turn the call over to your speaker host today, Ms. Siting Li, for her closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact Beggar's Investor Relations through the contact information provided on our website. This concludes today's call, and we look forward to speaking with you again next quarter. Thank you and goodbye. Unknown Executive, Timothy Zhao, Xiaomeng Zhuang, Thomas Chong, Eddy Wang, Alex Yao, Siting Li, Tao Xu, Yongdong Peng, HX Chen, Xiaomeng Zhuang, Griffin Chan, Ke Holdings Inc. Thank you for watching!
Speaker Change #131: We are now approaching the end of today's conference call I will turn the call over to your speaker has today and the city Lee for closing remarks.
Lee: Thank you once again for joining us today, if you have any.
Speaker Change #133: For further questions. Please feel free to contact me.
Speaker Change #134: Due to the contact information provided on our website. This concludes today's call and we look forward.
Speaker Change #135: Got it thank you and goodbye.
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Uh huh.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: Yes.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: Okay.
Yeah.
Speaker Change #135: Okay.
Speaker Change #135: Yes.
Speaker Change #135: [music].
Speaker Change #135: Yes.
Speaker Change #135: Okay.
Speaker Change #135: Yeah.
Speaker Change #135: Okay.
Speaker Change #135: Yeah.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Yes.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: Yeah.
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: Yes.
Speaker Change #135: [music].
Speaker Change #135: Yes.
Speaker Change #135: [music].
Speaker Change #135: Yes.
Speaker Change #135: Okay.
Speaker Change #135: Okay.
Speaker Change #135: Okay.
Speaker Change #135: Okay.
Speaker Change #135: Okay.
Okay.
Speaker Change #135: Okay.
Okay.
Speaker Change #135: Yes.
Okay.
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: Yes.
Speaker Change #135: [music].
Yeah.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Okay.
Speaker Change #135: [music].
Speaker Change #135: Yeah.
Speaker Change #135: [music].