KE Holdings Inc

Hello, ladies and gentlemen. Thank you for standing by for KE Holdings, Inc. first quarter 2024 earnings conference call. Please note that today's call, including the management prepares remarks and question and answer session, will all be in English. Simultaneous interpretation in 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 listen-only mode. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Siting Lee, IR Director of the company. Please go ahead, Siting.

Thank you, operator. Good evening and good morning, everyone. Welcome to KE Holdings for BACA's first quarter 2024 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.ke.com. On today's call, we have Mr. Stanley Peng, our co-founder, chairman, 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 development, and Mr. Xu will provide additional details on the company's financial results. Before we continue, I refer you to our Seth Hopper statement in our earnings press release, which applies to this call as we will make our looking statements. Please also note that Baker's earnings press release and this conference call include its discussions of unnoticed gap financial information as well as unnoticed non-gap financial measures. This refers to the company's press release, which contains a reconciliation of the unnoticed non-gap measures to comparable gap measures. Lastly, and as otherwise stated, all figures mentioned during this conference call are in RMB. For today's call, management will use English as main language. Please note that the Chinese translation is for convenience purpose only. In the case of any discrepancy, management statements in this original language will prevail. With that, I will now turn the call over to our chairman and CEO, Mr. Stanley Teng. Please go ahead, Stanley.

Thank you, Siting. Hello, everyone. Thank you for joining FACUS First Quarter 2024 and its conference call. In the first quarter of 2024, Transaction volume of existing homes on our platform prevailed, surpassing that of new homes in 74 cities, despite a high base rate in the first quarter of last year. Existing home transactions continue to show year-over-year growth in 16 cities. The steady growth in the existing home market will be $630 billion in the first quarter, down 35% year-over-year. At the same time, GTV existing home and new home transactions declined by 32% and 45% year-over-year, respectively. The overall performance is expected to improve in the coming quarters. At the end of the first quarter, the total number of actual stores on our platform reached over 42,500, an addition of nearly 3,000 stores compared with last year, primarily attributable to a substantial increase in the number of connected stores. In particular, our strategy on active patterns with connected stores has paid off, with additional key partner brands joining us across Wuhan, Xiamen, Nanjing, Jilin, and other cities. It also demonstrated that more industry partners are finding the rules to improve efficiency nowadays. Since the fourth quarter of 2023, the performance of newly connected stores has also exceeded our expectations. There has also been a positive surprise in aging productivity in the new connected stores with only a handful of employees compared to those large stores having restored major market fluctuations. These smaller stores boasting operational efficiency and a community of rich capabilities far beyond our expectations. Their performance also motivated us to improve our service competencies to better serve the diversified types of stores. The scaling up of aging and store network also further enhances the most fundamental infrastructure of our one-stop residential services. On the aging and store front, Lianjia Shanghai has adopted innovative business formats to achieve growth. Looking back at 2022, our homelessness coverage rate in Shanghai was around 35% This told us there was room for improvement in our community outreach and that our traditional large store model was too heavy-handed and impersonal. We advocate for a limitless aging store model. We are stores and service providers with strong community ties and dispensable strategic components. Over the years, We have explored many ways to make improvement on Asian side, and in 2023, Dengjia Shanghai discovered more possibilities on storefront, exploring various innovative practices under the large store model with introducing nearly 60% of community mini-services outlets derived from these large stores, which we call community mini-stores. This streamlined approach including including providing local convenience services such as printing at various small stores or mobile service kiosks and reception points located in high traffic areas like community centers, shopping malls, and subway stations. By deepening our employer in neighborhoods and establishing a close community of rational presence, we strengthened customers as well as agents' sense of security. We have achieved deeper community coverage and better identified local customer needs. In 2023, our coverage of the 3.5 million target residential households rose to 95% compared to 87% in 2022, and our home listing coverage rate in Shanghai soared from 65% to 84%. We also made many new attempts to enhance the customer experience in housing transactions. In terms of online operations, the rise of a new media platform over the past few years has led more agents to leverage those channels to acquire and engage customers. Capitalized on this trend, agents and store owners of our platform also began using tools like short videos and live streaming streaming to present home listings, introduce residential neighborhoods, and share real estate knowledge. Despite these early efforts, the lack of a new media strategy resulted in inconsistent customer acquisition efficiency. In response, we kicked off the Galaxy initiatives in 2022, incubating and empowering more agents and store owners to acquire customer through short videos and live streaming. By the end of the first quarter of this year, our Influencer network has grown to over 12,000 with almost 36 million followers, making it one of the largest real estate MCN networks nationwide. The traffic led to thousands of transactions this year. More importantly, this can better satisfy customer needs. Service providers can connect with a wide audience via those new media platforms which offer potential customers a more impartial interaction compared with traditional online methods. This approach gives agents an edge in uncovering hidden customer needs. Plus, the emergence of this realistic content influencers is not just a chain of a result technological advancement rather it reflects and results from the further specification of buyers and sellers agents within the industry. As for our offline operations, we have been advancing the iteration of a series of services that directly improve customers' experience. includes a direct connection with the housing providers fund to facilitate easier access. We also implemented measures that enhanced customer experience by elevating our business partners' engagement, such as public supervision and control program to enhance ecosystem governance and entire agent operations. Taking the windstorm transaction services model We implemented in Suzhou as an example. Historically, customers need to go to four separate places to complete the required procedures for existing home transactions and are often hand-pressed to schedule appointments in advance. This externalized process also hinders our ability to ensure assembly experience throughout the entire transaction. We sought ways to streamline this endurance by promoting collaboration among local government agencies, banks, and related enterprises in Suzhou, alongside our technology support. All this effort provided one-stop wholesale services for existing home transactions, covering transaction funds, funds escrow, face-to-face bank mortgage sign-ups, home title transfers, tax payments, and the collection of property ownership certificates. As Suzhou successfully pioneered the windstop services model with an end-to-end post-sales transaction process for existing homes, we plan to replicate this model in most cities and significantly improve customer experience going forward. Regarding customer experience in our new initiatives, there is still ample room for improvement as we delve deeper into customer needs and iterate our service products. For example, your home rental services. Last year, we conducted a survey involving the needs of 100,000 tenants and identified several major pain points, such as delayed service response, nonstandard housing amenities after moving in, the high cost of changing rentals, and a lack of lease termination guarantees. As a response, on March 16, 2023, we upgraded our services to include seven service offerings, timely repair, housekeeping, broadband setup, smart door lock, worry-free rental change, flexible payments, and dedicated vouchers. Also, we implemented Firesource Communities three-day unconditional refund upon this termination, guaranteed refund for rental change, a home security guarantee, compensation for unsatisfactory rental appearances, and timely deposit refunds. These services benefits and guarantees are specifically designed to address customer most critical pain points. We have created a standardized service fulfillment process based on best practice in this area. The result has been a notable improvement in the standardized services. Fulfillment rate, high customer satisfaction rates, three days after moving in, and a better customer recommendation rate. The area I have just touched on covers some of the key initiatives we have been exploring over the quarters. What we are working toward is assembling a group of people to force a better pace forward that enables us to navigate the changing times. We are looking to involve our Aging Storm model for housing transaction services. It has the quality and efficiency of our new initiatives. and elevates overall big platform to new heights, striving to meet and address the opportunities presented by the new era in China's housing market. Thank you. Next, I would like to turn the call over to our CFO, Xu Tao, to review our first quarter financials.