KE Holdings Inc

Ladies and gentlemen, thank you for standing by for QIYI Holdings Inc. third quarter 2023 earnings conference call. Please note that today's call, including management's prepared remarks and question and answer session, will all be in English. Simultaneous interpretation of Chinese is available on a separate line for the duration of the call. To access the call in Chinese, you will need to dial into the Chinese language line. At this time, all participants are in a listen-only mode. Today's conference is being recorded. I would now like to hand the call over to your host, Ms. Sitting Lee, IR Director of the company. Please go ahead, Sitting.

Thank you, operator. Good evening and good morning, everyone. Welcome to Katie Holdings' or Baker's third quarter 2023 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on the company's IR website, investors.katie.com. On today's call, we have Mr. Danny Peng, our co-founder, chairman, and chief executive officer, and Mr. Cao Xu, our executive director and chief financial officer. Mr. Peng will provide an overview of our strategies and business developments, and Mr. Xu will provide additional details on the company's financial results. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. Please also note that Baker's earnings press release and this conference call include discussions of unaudited gap financial information as well as unaudited non-gap financial measures. Please refer to the company's press release, which contains a reconciliation of the unaudited non-gap measures to the comparable gap measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in R&D. For today's call, the management will use English as the main language. please note that the Chinese translation is for convenience purpose only. In the case of any discrepancy, management statements in the original language will prevail. With that, I will now turn the call over to our Chairman and CEO, Mr. Stanley Peng. Please go ahead, Stanley.

Thank you, Siting. Hello, everyone. Thank you for joining Baker's third quarter 2023 earnings conference call. In the third quarter, the real estate market showed a notable rebound following the tone setting of the political bureau meeting and a series of supportive politics, including modification to first-time homebuyers' qualifications in first-tier cities. The degree of support and the implementation of these favorable measures, as well as the real estate market's performance, both went beyond our expectations. Our focus this year has been on contemplating the future of the long term and align our strategy with it. We are entering a new phase that we call crossing the next mountain. This phase begins as the market continues its shift from same property purchases as investment assets to prioritizing residential housing for the quality of living itself. In this transaction, We must also evolve from a transaction-centric operating model to one that is dedicated to ensure better living experiences for our customers. This is a largely untapped market with vast opportunities. Real estate's return to a focus on people's better living signals are promising future ahead of us. With industry endurance and insight, we have cultivated Over the years, we are well positioned to grow in a new phase, encompassing many possibilities of better living. Beike has established the industry's most powerful infrastructure, our AECM, throughout our existing home transaction business. This infrastructure, integrating our online databases and traffic networkers with offline stores and edge networkers, lays a solid base for us to explore new possibilities. Additionally, our management expertise for large groups in our digital capabilities and data-driven strategies collectively support our journey into this exciting future. This July, we took an important step toward our objectives by upgrading our corporate strategy to one-body-three-wins, This is a key step in our roadmap to becoming a well-solved residential service platform for better living. As we navigate the dynamic landscape, we need a deeper, differentiated mindset and knowledge base, as well as a set of mutual principles and guidelines to identify core value propositions to drive us forward in the right direction. To the end, there are a host of key questions we are asking ourselves, what value can technology bring to both customers and service providers? Our business segments are separated, but the customers are asking for a one-stop solution. In what ways can we unite our vertical business segment to create horizontal one-stop services that meet customers' needs? How can we maximize customers' living endurance and extent beyond merely delivering transactional value? What's our value proposition to different stakeholders in our industry, including our partners and service providers? How do we focus on offerings, true value, and humanistic care for our service providers, rather than treating people as tools and channels? You're addressing the broader residential industry. Do we look for growth through physical expansion or through generating chemical reaction to drive industry-wide evolution? The next step to posing these questions is calling on everyone in our organization to think about them and working together to address these topics. While engaging in these crucial reflections to direct our strategy, we are also implementing the organizational modifications and business initiatives of our OneBody3Win strategy, which will be reflected in our performance metrics. With the easing of COVID restrictions, 10% demand dropped the market's recovery in the first quarter of this year. However, subsequent home transaction market activities deviated from historical seasonal trends. New home market is still facing some challenges. In the third quarter, we recorded a GTV or RMB $655.2 billion. There was a 2%. and a 27% year-over-year decrease in existing home transactions and new home transactions, respectively. And our overall performance has exceeded the expectations. Our revenue for the quarter was RMB 17.8 billion, up 1.2% year-over-year. Year-to-date, DTV has grown by 23%, with existing home transactions up 28% new home transaction up by 13%. In our efforts to manage risk and improve efficiency over the past two years, our one-body operations, which is our home transaction services, are more agile and efficient. It's now time to broaden our collaboration with more industry partners and service providers as we advance together toward offering one-stop residential services for better living. Here, we will further institute standardization for people, objects, and services to promote the industry advancements over the next decades. Starting in the third quarter, we accelerated our store network expansions. In September alone, we added around 1,300 newly and newly connected stores nationwide, excluding Beijing and Shanghai. In the third quarter, contracted sales from our home renovation and furnishing business reached RMB 3.26 billion, an increase of 66% year-over-year. Year-to-date contracted sales reached RMB 9.39 billion, up 19% year-over-year on our pro forma basis. Additionally, contracted rental units of our rental property management services grew from 50,000 in the third quarter of 2022 to 160,000 in the third quarter of this year. Many of the metrics above mentioned are derived from our emerging businesses. More importantly, The long-term driver behind our business development is a consistently enhanced understanding of the industry landscape. Rapid growth and scalable operations have provided us with a deeper understanding of the industry and the capabilities to execute on small-scale testing approaches to make rapid business interaction across our service ecosystem. The build-up of such systematic capabilities means knowing which metrics to use and how many parameters we should set in the business. Rather than how high the parameter is set, the deep dive and scale of our one-body business have accelerated our scientific management and competitiveness. It's the equivalent of taking 50% steps forward. However, with our emerging business, we have only just taken out first aid. It's crucial to note that while growth and building skills are best goals, they are not the sole objectives. We also deeply understand the importance of supporting the industry ecosystem. Platform-wise, while we have notably improve our efficiency and operational capabilities over the last two years. We need to be careful about past dependence. Building and maintaining synergistic relationships with all of our partners, whether they are brands, store owners, or developers, is of great importance to us. We will make an adjustment to our operational strategy to better improve store owners' endurance and engagement, refining our platform capabilities to empower them, and establishing store owner committees that ensure collaborative development and governance. We started Lin Jia and Baker driving by a wheel to make the industry better. And today, we need to adhere to and align with an understanding that in order to becoming an industry leader in advanced productivity, it's essential to bring unique value to the industry. We are not competing against existing service providers or business partners in the industry, but rather against low-quality supply that damages the industry reputation and diminishes customer experience. This is why we need to work hard to push for an overall improvement in the quality of the industry. Given our recent progress and the growing consumer demand for service and quality, we have seen tremendous promise. We also believe that one day we will proudly advocate for this industry. Thank you. Next, I would like to turn the call over to our CFO, Xu Tao, to review our third quarter financials.