Beike Shares Rise on Earnings Beat, Expanded Buybacks

By Jiahui Huang

KE Holdings' shares rose sharply in Hong Kong after the online property transaction platform boosted buybacks and beat earnings expectations, helped by rising home sales activity in major Chinese cities.

Shares of the Beijing-based company, also known as Beike, were 7.25% higher at 38.45 Hong Kong dollars ($4.93) by midday Tuesday, outperforming the Hang Seng Index's 0.1% gain. Its American depositary receipts closed 5.5% higher overnight.

The real-estate platform on Monday posted a 46% rise in second-quarter profit, along with a 20% increase in revenue that it said offered a sign of recovery for existing home sales in major cities in China. It also boosted a buyback program to $3 billion from $2 billion and extended it through August 2025.

Analysts largely said Beike reported results that beat on both the top and bottom lines, with improving margins a welcome surprise.

"Beike gained market share in its new and existing home markets," Nomura said, highlighting short-term market recovery after the government unveiled property stimulus in May.

Daiwa said Beike's existing home contribution margin and home renovation contribution margin were key positive surprises, with the company's gross margin expanding to 27.9% in the second quarter. With the expanded buyback program and "abundant cash offshore," Daiwa expects Beike to deliver a total shareholder return of at least 7% annually.

Nomura and Daiwa both kept buy ratings on the stock.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

August 13, 2024 01:25 ET (05:25 GMT)

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