KE Holdings Inc

Hello, ladies and gentlemen. Thank you for standing by for KE Holdings Incorporated's first quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. Today's conference is being recorded. I will now turn the call over to your host, Mr. Matthew Zhao, IR Director of the company. Please go ahead, Matthew.

Thank you, operator. Good evening and good morning, everyone. Welcome to KE Holdings Inc. Obake's first quarter 2021 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on our company's IR website, www.investors.ke.com. On today's call, we have Mr. Stanley Yongdongpeng, our co-founder and chief executive officer, and Mr. Tao Xu, our chief financial officer. Mr. Peng will provide an overview of our statistics and business developments, and Mr. Xu will provide additional details on the company's financial results. Before we continue, I refer you to our Steve Harper statement in our earnings price release, which applies to this call, as we will make forward-looking statements. Please also know that because earnings price release and this conference call include discussions of an audit gap financial information as well as an audit non-gap financial measures. Please refer to the company's press release, which contains a reconciliation of the audit non-GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in人民비. With that, I will now turn the call over to our CEO, Mr. Stanley Peng. Please go ahead, Stanley.

Thank you, Master. Hello, everyone. and thank you for joining us today on our first quarter 2021 early conference call. We are very grateful to have achieved operational and financial results in the first quarter that considerably exceeded expectations. Thanks to the tailwinds from China's robust economic growth following the COVID-19 pandemic and adherence of the national policy, housing for living, not for speculation. as well as our unwavering focus on the long-term goal of delivering an excellent consumer experience through quality service. Our total GTV grew rapidly to 1.07 trillion RMB, up 224.2% year over year. Meanwhile, the self-reinforcing virtual cycle of efficiency and scalability driven by quality service was further enhanced on our platform. We continue promoting industry digitalization by further building online infrastructure. In the first quarter, our housing dictionary contained data for over 244 million homes in China. Average MAUs, including our platforms, apps, and the retail mini programs, reached four million homes. $48.5 million in the first quarter, up 78% year-over-year. The expansion of our network scale also continues at a robust pace while we remain focused on the quality of our network. By the end of the first quarter, the total number of Canadian stores reached 48,700, up 25.4% year-over-year. seamlessly and win-win collaboration among stores and brands continue to prevail on our platform. In the first quarter, 76% of transactions on our platform were completed through cross-store collaborations and the transactions completed through cross-brand collaborations remains steady at 36% on our platform, while connected stores accounted for 83% of existing home listings. In addition, we continuously supported our connected stores and brands in recruiting, cultivating, and retaining agents in the first quarter, which led to 41.8% year-over-year growth of the number of agents on our platform, reaching a total of 500 and 28,000. With that overview, I would now like to provide you with some color on our existing home transaction services business. Total GTV of existing home transactions in China grew 133% year-over-year in the first quarter. The substantial gain was impact due to the low base in 2020 caused by the severe impact of the pandemic. as well as the impact of some structural transaction growth at the regional level. On our platform, GTV of existing home transactions reached 673.4 billion RMB in the first quarter, increasing 244.2%, and Unistore GTV of existing home transactions achieved 174.7% year-over-year expansion. continuously improve service quality and efficiency of Canadian stores were the primary drivers of these robust gains. In the fourth quarter, we initiated an agent specialization strategy, which encourages agents to focus on either existing home sales, new home sales, or home rentals, rather than their traditional mixed functions in the industry. added by the cooperative mindset we forced among agents, along with clearly defined roles and performance-based commission allocation mechanisms. This strategy helps agents sharpen their focus, cultivate stronger professional service capabilities, promote efficient customer conversion across different offerings, and ultimately improve store efficiency and consumer experience. The agent specialization strategy has proven very effective in enhancing consumer endurance and store efficiency. Taking the pilot city of Hangzhou as an example, over 50,000 agents were assigned to different roles in the first quarter. Unit store GTV was 11% higher in the store where agent specialization was implemented. compared to stores that have not divided agents for functions. By the end of the first quarter, we had implemented this mechanism in 20 cities, covering 17,700 and 800 stores. Given the encouraging early results, we plan to adopt this strategy in batches in at least 30 cities this year. In order to create value for our consumers one step further and improve the real estate transaction process, we began opening offline contract service centers in our major cities. Our goal is to further guarantee transaction security, streamline the signing process, and enhance the efficiency of multi-parties. The real estate contract and signing process tends to be very complicated and often requires comprehensive knowledge across financial, legal, and tax fields. The lack of professional service offerings that fit these needs left consumers opposed to transaction risk. Our contract service center addresses exactly this pain point as they become the go-to location for contractors customers regarding all contract related services. The process is completed with a professional contract manager to ensure compliance and full risk disclosure, which provides a safe, efficient, and convenient contract endurance for our customers. By the end of the first quarter, we have opened 74 contract signing service centers in 21 cities. switching gears to our new home transaction services. In the fourth quarter, GTV for new home transaction increased 96% year-over-year in China, which was attributable to the low base last year, as well as developers drawn incentive to accelerate sales through. GTV for our new home transaction services was 343%. 1.4 billion RMB, up 194.9% year-over-year, driven by the 220% GTV growth of kinetic stores and other channels as we continue to enhance the efficiency and professional training to our kinetic agents. on par with our stellar financial performance. We also made a substantial stride in new home transaction in digitalization content, enriched an ecosystem governance. This aim to empower service providers such as developers and continue to enhance the service quality and maximize value for the customer. As we communicated during our first quarter earning call, we are dedicated to build online content for new home transactions to improve the consumer experience, online penetration, and facilitate this segment's digital transformation. As of March 31, we enriched comprehensive and multi-dimensional information for more than 10,000 new home sales projects on our platform, covering 34 cities and offerings consumers with more online information such as 3D property book, through data processing. Together with platform and AI generated online content, such as evaluation, assessment, reports, and AI housing layout plans, we were able to better satisfy the consumer's needs for new home online information. We also optimized our new home sales traffic and lease acquisition strategy, thanks to all these initiatives. We generated on average a 10% increase in new home customer leads in those 34 cities in the first quarter and significantly enhanced the online experience for customers. Moreover, we launched a new home business conduct improvement plan to advocate for a transparent and healthy new home sales environment based on governance and a better collaboration mechanism. in the new home transaction services. Our goal is to facilitate a fair, safe, efficient, and orderly ecosystem for the new home transaction services that addresses the improper priorities that have existed for a long time, such as vicious competition for customers, customer information leakage, and forced rebates. By promoting governance mechanisms in the industry, including rules and protocols as well as the capability to implement them, we aim to protect agents' rights and offer a sense of security and certainty to them. Eventually, this would substantially protect the legitimization interests of developers and improve agents' efficiency and income. enhance the customer experience, and create a virtual cycle that enhances the overall operating efficiency of the new home industry. In the first quarter, we implemented a verification system at the agent level and put in place city-level supervision teams. We have also signed agreements with 91% of developers on our platform on five don'ts. making a firm commitment to the developers and the overall industry for new home for new homes another important initiatives is the new home sales empowerment plan by cultivating dedicated agents with the expertise on new home transaction services as well as online and offline full and spectrum customer acquisition capabilities. The plan caters to consumers' different needs when purchasing new home projects compared with existing homes. At the same time, the portfolio of new home sales channels we offer to developers is further enriched, better meeting their needs for more focused and efficient sales channels. Lastly, our emerging sources. We have made steady progress in home renovation services and financial services. We completed 451 home renovation units in Beijing in the first quarter while progressively iterating the infrastructure including multiple self-developed systems. Among them, our self-developed BayWall beam system version 1 was launched in the first quarter. As part of the industry infrastructure, the BayWall beam system successfully digitalized home renovation and decoration design. For designers, the beam system enables automatic drawing output, accurate real-time quotation, and the generation of digital build of materials. as well as accurate VR design efforts supported by the VR capability available on our platform. This not only solves the industry-wide problem of visualizing and translating the abstract design from the designer's mind, but also lays out the foundation for the final construction feasibility with higher enhanced data accuracy. For customers, it's gradually reinforcing the notion that on our platform, what you see is what you get, and empower them to take control of renovation costs in real time. The service reliability is greatly enhanced. We believe we have established the industry-leading position in the infrastructure we provide for home renovation and decoration, including the system, products, and applications for both consumers and service providers. In terms of financial services, recognizing 60% of sellers in the existing home transactions have a demand for property redemption, we promoted the Anxinbao products to meet owners' redemption needs more efficiently. And at average, 26% decrease in cost. At the end of the first quarter, this product had entered seven cities, improving the overall transaction experience for homeowners in existing home transactions. In summary, 2021 is off to a strong start. We financial, our financial and operational performance has spotlighted our core strengths and we continue to gain traction with our AC network in new and existing home markets. The national policy of house are not for living, not for speculation, that underpins the foundation for a steady and healthy real estate market provides added support to our mission to transform the housing transaction and service industry in China. Going forward, we will continue to involve our business and invest in initiatives close to our core while creating a new and better normal for the industry, building trust and increasing value for everyone along the way. With that, I would like to turn the call over to our CFO Xu Tao for a closer review of our financial of our first quarter financials. Thank you.