KE Holdings Inc. (NYSE: BEKE)

Sector: Real Estate Industry: Real Estate Services CIK: 0001809587
Market Cap 21.08 Bn
P/B 2.21
P/E 43.29
P/S 1.45
ROIC (Qtr) 14.78
Div Yield % 0.00
Rev 1y % (Qtr) 2.07
Total Debt (Qtr) 2.96 Bn
Debt/Equity (Qtr) 0.31

About

KE Holdings Inc., also known as Beike, operates as a leading integrated online and offline platform for housing transactions and services in China. The company, founded in 2001 by Mr. Zuo Hui, has since established itself as a pioneer in the industry, building the infrastructure and standards necessary for efficient housing transactions and services. Beike's main business activities revolve around providing a platform for housing customers, real estate developers, and home renovation service providers. This platform is open to participants in the...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 400.65M provides exceptional 154.96x coverage of minority interest expenses 2.59M, showing strong core operations.
  • Strong tangible asset base of 15.99B provides 5.40x coverage of total debt 2.96B, indicating robust asset backing and low credit risk.
  • Tangible assets of 15.99B provide exceptional 20.76x coverage of deferred revenue 770.33M, showing strong service capability backing.
  • Cash position of 2.24B provides exceptional 867.32x coverage of minority interest expenses 2.59M, indicating strong liquidity.
  • R&D investment of 365.73M represents healthy 0.47x of deferred revenue 770.33M, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of 400.65M barely covers its investment activities of 700.92M, with a coverage ratio of 0.57, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 400.65M provides insufficient coverage of deferred revenue obligations of 770.33M, which is 0.52x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 400.65M provides minimal 1.13x coverage of tax expenses of 354.25M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Long-term investments of 2.80B represent a high 0.83x of fixed assets 3.39B, indicating potential overexposure to financial assets versus operational capabilities.
  • Short-term investments of 5.73B represent 1.58x of working capital 3.63B, suggesting potentially excessive financial asset allocation versus operational needs.

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 51.14 Bn 41.65 1.30 9.48 Bn
2 CSGP Costar Group, Inc. 26.47 Bn 1,304.00 8.66 1.18 Bn
3 BEKE KE Holdings Inc. 21.08 Bn 43.29 1.45 2.96 Bn
4 JLL Jones Lang Lasalle Inc 16.90 Bn 26.75 0.67 3.48 Bn
5 FSV FirstService Corp 7.01 Bn 56.92 1.78 1.51 Bn
6 COMP Compass, Inc. 6.69 Bn -118.64 1.01 0.48 Bn
7 CIGI Colliers International Group Inc. 5.39 Bn 69.70 2.00 2.50 Bn
8 OPEN Opendoor Technologies Inc. 4.15 Bn -13.09 0.88 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.20 1.34
EV to Cash from Ops. EV/CFO 8.24 2.97
EV to Debt EV to Debt 1.11 6.15
EV to EBIT EV/EBIT 3.92 5.23
EV to EBITDA EV/EBITDA 5.52 18.71
EV to Free Cash Flow [EV/FCF] EV/FCF 17.63 -9.39
EV to Market Cap EV to Market Cap 0.16 4.27
EV to Revenue EV/Rev 0.23 3.62
Price to Book Value [P/B] P/B 2.21 2.10
Price to Earnings [P/E] P/E 43.29 45.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -6.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.42
Interest Coverage Interest Coverage 0.00 -2.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -13.70 -12,525.88
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 0.92 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -16.56 4.69
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 26.73
EBIT Growth (1y) % EBIT 1y % (Qtr) -0.28 12.80
EBT Growth (1y) % EBT 1y % (Qtr) -0.28 21.27
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 22.42
FCF Growth (1y) % FCF 1y % (Qtr) -72.98 54.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.17 39.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 1.45
Cash Payout Ratio Cash Payout Ratio 0.00 -0.01
Cash Ratio Cash Ratio (Qtr) 0.37 1.45
Current Ratio Curr Ratio (Qtr) 1.61 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.31 -0.06
Interest Cover Ratio Interest Cover Ratio 0.00 -2.22
Times Interest Earned Times Interest Earned 0.00 -2.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -121.98
EBIT Margin % EBIT Margin % (Qtr) 41.20 -136.76
EBT Margin % EBT Margin % (Qtr) 5.79 -144.54
Gross Margin % Gross Margin % (Qtr) 21.90 32.87
Net Profit Margin % Net Margin % (Qtr) 3.30 -139.89