External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>According to Beijing Daily, Beijing Lianjia has lowered commission rate for existing home transactions (EHT) in Beijing, from previous nominal rate of 2.7% to 2.0%, and will start to charge 1.0% each on both home sellers and buyers, instead of only from the buyer side.</li><li>In the prudent scenario, we estimate a 1.5/6.3% negative impact on Ke Holdings (Beike)’s group-level contribution profit (CP) in 2023/2024E.</li><li>However, we expect limited long-term impact on Beike’s earnings from the adjustment of commission rate, as: 1) current commission rate for EHT in Beijing could be lower than 2.7%; 2) Lianjia in cities other than Beijing may have limited room to cut rates given actual rates could be lower than 2%. Maintain BUY with SOTP-based TP unchanged at US$24.5.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

According to Beijing Daily, Beijing Lianjia has lowered commission rate for existing home transactions (EHT) in Beijing, from previous nominal rate of 2.7% to 2.0%, and will start to charge 1.0% each on both home sellers and buyers, instead of only from the buyer side.In the prudent scenario, we estimate a 1.5/6.3% negative impact on Ke Holdings (Beike)’s group-level contribution profit (CP) in 2023/2024E.However, we expect limited long-term impact on Beike’s earnings from the adjustment of commission rate, as: 1) current commission rate for EHT in Beijing could be lower than 2.7%; 2) Lianjia in cities other than Beijing may have limited room to cut rates given actual rates could be lower than 2%. Maintain BUY with SOTP-based TP unchanged at US$24.5.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>Beike reported (31 Aug) 2Q23 financial results: total revenue was up 41.4% YoY to RMB19.5bn in 2Q23, inline with our forecast and Bloomberg consensus estimates.</li><li>Non-GAAP net income was RMB2.4bn, 34/43% better than our forecast/consensus estimate, which translates into a 12.1% NPM (our estimate: 9.1%), thanks to continuous operating efficiency improvement.</li><li>Given the fluctuation in macro recovery, and that the stimulus policy takes time to transit into housing sales recovery, management guided 3Q23 revenue to be between RMB15.5bn and RMB16.0bn, implying a decline of 9.1-11.9% YoY and 18-20% QoQ. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Beike reported (31 Aug) 2Q23 financial results: total revenue was up 41.4% YoY to RMB19.5bn in 2Q23, inline with our forecast and Bloomberg consensus estimates.Non-GAAP net income was RMB2.4bn, 34/43% better than our forecast/consensus estimate, which translates into a 12.1% NPM (our estimate: 9.1%), thanks to continuous operating efficiency improvement.Given the fluctuation in macro recovery, and that the stimulus policy takes time to transit into housing sales recovery, management guided 3Q23 revenue to be between RMB15.5bn and RMB16.0bn, implying a decline of 9.1-11.9% YoY and 18-20% QoQ. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ke Holdings (BEKE US) – Short-Term Headwind, but Bottoming Out Is in Sight

<ul><li>BEKE’s share price surged 13/12% on ADR/H-share market in the last two trading days mainly driven by news from BBG which stated that government is preparing a new basket of measures to support property market and Tsingdao to ease the home purchase limit.</li><li>We do NOT find the document on any official sites but based on historical experience and our channel check, we listed 4 possibilities and its implications to the industry in which the base case is assuming most 2nd-tier cities would follow what Tsingdao imposed and will largely stabilize the market sentiment and property sales.</li><li>It implies a 10/20% GTV growth in new home/existing home market in 2023E for BEKE. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BEKE’s share price surged 13/12% on ADR/H-share market in the last two trading days mainly driven by news from BBG which stated that government is preparing a new basket of measures to support property market and Tsingdao to ease the home purchase limit.We do NOT find the document on any official sites but based on historical experience and our channel check, we listed 4 possibilities and its implications to the industry in which the base case is assuming most 2nd-tier cities would follow what Tsingdao imposed and will largely stabilize the market sentiment and property sales.It implies a 10/20% GTV growth in new home/existing home market in 2023E for BEKE. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ke Holdings (BEKE US) – New policy? What’s good for BEKE?

<ul><li>BEKE’s reported strong 1Q23 results with adjusted NP doubled from last quarter to reach RMB 3.56bn, strongly beating market expectations.</li><li>Moreover, the Company guided another strong quarter with GTV for ETH/new home to grow &gt;20%/30% YoY.</li><li>Due to improving GTV growth outlook and narrower than expected losses from new business, we raise our forecasts and expect the adjusted NP to reach RMB 7.4/8.5bn in 2023/24E, 17%/6% higher than the consensus. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BEKE’s reported strong 1Q23 results with adjusted NP doubled from last quarter to reach RMB 3.56bn, strongly beating market expectations.Moreover, the Company guided another strong quarter with GTV for ETH/new home to grow &gt;20%/30% YoY.Due to improving GTV growth outlook and narrower than expected losses from new business, we raise our forecasts and expect the adjusted NP to reach RMB 7.4/8.5bn in 2023/24E, 17%/6% higher than the consensus. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ke Holdings (BEKE US) – Strong 2Q Guidance Points to a Robust 1H23

<ul><li>BEKE’s strong 1Q23 guidance and YTD data proved our higher-than-market sales forecast published in January.</li><li>We expect the sales growth to further improve in 2Q and beyond based on our leading indicator, channel check and low base (2023E EHT at +20% YoY).</li><li>Together with the amplification effect via its ACN network, we expect 23/24E adjusted net profits to achieve RMB6.2/7.7bn, 17/13% higher than consensus now. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BEKE’s strong 1Q23 guidance and YTD data proved our higher-than-market sales forecast published in January.We expect the sales growth to further improve in 2Q and beyond based on our leading indicator, channel check and low base (2023E EHT at +20% YoY).Together with the amplification effect via its ACN network, we expect 23/24E adjusted net profits to achieve RMB6.2/7.7bn, 17/13% higher than consensus now. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ke Holdings (BEKE US) – 2Q23E will be another market surprise

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)