Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

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

Equity Bottom-Up

<ul>
<li>Beike's (BEKE) C1Q25 rev. beat our est./cons. by 4.6%/4.0% and non-GAAP NI beat est./cons. by 18%/25%, due to scale effect and cost savings;</li>
<li>The near-term negative is that US-China trade truce reducing the possibility of large-scale stimulus on real estate. The near-term positive is margin expansion. </li>
<li>We keep rating and TP unchanged. We see the US$1.2bn (5.0% market value) shareholder return commitment in 2025 as a major positive.</li>
</ul>


Beike's (BEKE) C1Q25 rev. beat our est./cons. by 4.6%/4.0% and non-GAAP NI beat est./cons. by 18%/25%, due to scale effect and cost savings;
The near-term negative is that US-China trade truce reducing the possibility of large-scale stimulus on real estate. The near-term positive is margin expansion. 
We keep rating and TP unchanged. We see the US$1.2bn (5.0% market value) shareholder return commitment in 2025 as a major positive.


[KE Holdings (BEKE US, BUY, TP US$25) Review]: Margin Expansion and SH Return Vs. Lack of Stimulus

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

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

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

<ul>
<li>In 1Q25, BEKE’s active stores increased by 29% YoY and total revenue increased by 42% YoY.</li>
<li>New home revenue and rental revenue grew by 64% YoY and 94% YoY in 1Q25.</li>
<li>We believe the stock price can double and is undervalued for the concerns on the general property market.</li>
</ul>


In 1Q25, BEKE’s active stores increased by 29% YoY and total revenue increased by 42% YoY.
New home revenue and rental revenue grew by 64% YoY and 94% YoY in 1Q25.
We believe the stock price can double and is undervalued for the concerns on the general property market.


KE (BEKE): In 1Q25, Rental and New Home Revenues Up by 94% and 64%

<ul>
<li>In 4Q24, Meituan’s revenue growth rate was 20% YoY with all businesses rising.</li>
<li>The operating margin improved to 8.8% in 4Q24 versus about zero in 4Q23.</li>
<li>We set an upside of 61% and a price target of HK$270. Buy.</li>
</ul>


In 4Q24, Meituan’s revenue growth rate was 20% YoY with all businesses rising.
The operating margin improved to 8.8% in 4Q24 versus about zero in 4Q23.
We set an upside of 61% and a price target of HK$270. Buy.


Meituan (3690 HK): 4Q24, High Growth and Higher Margin, 60% Upside

<ul>
<li>Beike reported C4Q24 revenue beat our estimate/consensus by 8.4%/7.4%, non-GAAP OP miss our estimate/consensus by 37.5%/21.6%, due to front-loading expansion cost.</li>
<li>We expect Beike to take 2-3ppt of market share in a rebalancing property market in 2025. </li>
<li>We keep the stock as BUY and keep TP at US$25.</li>
</ul>


Beike reported C4Q24 revenue beat our estimate/consensus by 8.4%/7.4%, non-GAAP OP miss our estimate/consensus by 37.5%/21.6%, due to front-loading expansion cost.
We expect Beike to take 2-3ppt of market share in a rebalancing property market in 2025. 
We keep the stock as BUY and keep TP at US$25.


[KE Holdings (BEKE US, BUY, TP US$25) Earnings Review]: Housing Inventory Resolution Drives Recovery

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


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


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

China

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

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KE Holdings (BEKE US)