KE Holdings Inc. (BEKE)

Price$17.92Cached quoteAs of 2026-09-05 15:56 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because improving profits offset a price that still assumes continued recovery.

At the latest verified close, Beike's market value was about $20.6 billion, roughly 30 times the company's reported profit over the latest 12 months. If first-half 2026 earnings simply repeated in the second half, that falls to about 18 times. June cash, restricted cash and short-term investments totaled $8.3 billion, about 40% of market value, but not all of that is surplus. The valuation therefore needs continued profit recovery, yet the balance sheet provides meaningful protection.

Big pictureHousing weakness still makes Beike's earnings uneven, even as recent transaction activity has improved.

The supplied history shows the cycle clearly: Beike lost RMB1.39 billion in 2022, earned RMB5.88 billion in 2023, then slipped to RMB2.99 billion in 2025. Revenue grew only 1.2% in 2025, while net income fell 26%. Cash generated from day-to-day operations turned slightly negative; after RMB608 million of capital spending, cash left after running and investing in the business was about negative RMB984 million. Encouragingly, first-half 2026 cash from day-to-day operations rebounded to RMB5.14 billion.

Business strengthBeike has a strong financial cushion and is repurchasing shares faster than employee awards create them.

At year-end 2025, assets usable within a year were RMB68.1 billion against RMB42.4 billion of obligations due within a year, with only RMB0.39 billion of debt and RMB7.38 billion of net cash. Beike repurchased RMB6.58 billion of shares and paid RMB2.88 billion of dividends in 2025, while employee share compensation was RMB1.90 billion. In second-quarter 2026, weighted average basic American depositary shares, the U.S.-traded units representing three ordinary shares each, fell about 3.6% from a year earlier. The caution is that 2025 shareholder payouts exceeded that year's cash generation.

What could change the storyA durable housing recovery could make today's price attractive; renewed weakness would expose the valuation.

The bull case is operating leverage: second-quarter transaction value rose 6.3%, gross margin reached 28.6%, and net income roughly doubled as costs fell. The bear case is that China's housing slump remains unresolved; July new-home prices were down 3.2% from a year earlier, and Beike's first-quarter transaction value had fallen 15.6%. At roughly today's market value, repeating first-half 2026 profit for a full year implies about 18 times earnings; falling back near 2025 profit would imply nearly 50 times.

AI: News

Second-quarter profit reboundSecond-quarter profit roughly doubled as Beike cut costs and earned more from each housing transaction.

On August 21, Beike reported second-quarter transaction value up 6.3% and net income up 100.8%, even though revenue fell 5.7%. Gross margin, the share of revenue left after direct costs, improved to 28.6% from 21.9%, and quarterly cash from day-to-day operations reached RMB6.61 billion. The stock closed about 4.5% higher that day. That timing is consistent with investors rewarding stronger profitability and cash generation, but it does not prove the earnings release alone caused the move.

First-quarter cost disciplineFirst-quarter profit rose despite sharply lower housing activity, showing cost cuts were already working.

On May 19, Beike reported first-quarter transaction value down 15.6%, with new-home transaction value down 37.2% and revenue down 19.0%. Even so, net income rose 46.7% and operating margin improved to 6.7% from 2.5%, helped by lower personnel, marketing and other costs. The stock rose about 5.2% that day, although it fell over the next two sessions, suggesting investors remained uncertain about how durable the profit improvement would be.

Large shareholder returnsBeike returned more cash to shareholders, but the pace depends on stronger future cash generation.

On March 16, Beike declared about $0.3 billion of final dividends and said 2025 share repurchases totaled about $921 million, taking total 2025 shareholder returns to roughly $1.2 billion. Its repurchase authorization remains as large as $5 billion through August 2028, subject to shareholder mandates. The stock rose about 1% on the announcement day, but attribution is uncertain. The main valuation issue is funding: 2025 operating cash flow was slightly negative, so that return pace relied partly on balance-sheet resources.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018
Revenue	$13.52B	$12.80B	$10.95B	$8.80B	$12.67B	$10.80B	—	—
Gross profit	$2.89B	$3.14B	$3.06B	$2.00B	$2.48B	$2.58B	—	—
Gross margin	21.37%	24.55%	27.92%	22.71%	19.59%	23.92%	—	—
Research & development	$369.0M	$312.8M	$272.8M	$369.1M	$501.2M	$379.8M	—	—
Operating expenses	$2.59B	$2.63B	$2.38B	$2.12B	$2.70B	$2.15B	—	—
Operating income	$301.8M	$515.8M	$675.7M	−$120.8M	−$212.6M	$435.5M	—	—
Operating margin	2.23%	4.03%	6.17%	−1.37%	−1.68%	4.03%	—	—
EBITDA	$455.2M	$654.5M	$873.1M	$97.1M	$2.5M	$615.4M	—	—
EBITDA margin	3.37%	5.11%	7.97%	1.10%	0.02%	5.70%	—	—
Net income	$428.1M	$556.9M	$828.6M	−$201.0M	−$82.2M	$425.7M	—	—
Net profit margin	3.17%	4.35%	7.56%	−2.28%	−0.65%	3.94%	—	—
Basic EPSper basic share	$0.13	$0.16	$0.24	-$0.06	-$0.02	$0.05	—	—
Diluted EPSper diluted share	$0.12	$0.16	$0.23	-$0.06	-$0.02	$0.05	—	—

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