BEKE: Initiating with BUY Rating at $22; Post Covid Share Gains May Have Legs
What’s New: We are initiating on KE Holdings Inc (BEKE US) with a BUY rating at a PT of USD22, which implies 1.8x FY24E EV/Rev. Our positive view is based on: 1) favorable mix shift from new home sales to existing home transactions driving margin upside; 2) continued expansion of agency collaboration network that could fuel 3P transactions aiding further share gains; and 3) incremental share gains in new housing projects as brokerage firms including Beike could play a bigger role in driving new home sales. On a broader macro level, Beike could also benefit from a housing market recovery driven by multiple tailwinds including but not limited to 1) targeted fiscal and monetary policies; 2) easing property curbs for homebuyers; and 3) continued policy support for property developers.Analysts:
Jin Yoon
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New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:
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