One Chinese real estate company not only has its market slump, but also has its money back to shareholders. US-listed KE Holdings is a “single league,” Barclays analysts said in a report Wednesday. KE, which is traded under the ticker “Beke”, operates one of China’s largest real estate brokers for rental and home sales. “The company has already returned more capital than it has raised from the capital market, indicating that management is focusing on shareholder returns,” analysts said. On Tuesday, KE announced its $3-$5 billion share buyback programme by the end of August 2028, down 31% year-on-year, with a stock buyback programme of approximately $182 million in second-quarter profits. Beke is China’s best real estate agent (both online and offline). assignment. ” Analysts confirmed their overweight rating and price target of $25. That’s an increase of more than 40% since the end of Thursday. Meanwhile, the Chinese real estate market is still far from recovering. China’s real estate investments have declined since July with a 12% annual decline. The average price of real estate in China’s capital has fallen over the past two years. At the beginning of August, Chinese Prime Minister Li Qiang acknowledged the challenges of sustainable real estate and called for more support. However, since apartments in China are usually sold before they are completed, it is a complicated issue. Since the market has declined over the past few years, many developers have no cash to build homes that many households have already mortgaged. So far, policymakers have not popped out directly to support developers. Instead, they focused on specific projects, making it easier for people to buy multiple homes. In August, Beijing eased restrictions on property purchases in the capital’s suburbs, and Shanghai continued to follow a similar policy. “Beijing and Shanghai both have a relaxed housing market policy, but it would not be surprising to see other cities follow suit,” HSBC analysts said in a report Thursday. “That being said, I believe the biggest policy catalyst comes from a wide range of stimuli for city renewals with feasible budgets.” Analysts expect that the seasonal factors that have curtailed transactions over the summer could potentially recover home sales in September, but following the announcement of the stimulus, he warned of the fundamental impact of rising House transactions last fall. Ke’s business is completely immune from the macro environment. Revenue from existing housing trading services fell in the second quarter. Stocks have been down since the beginning of the year, compared to a surge in Kraneshares CSI China Internet ETF (KWEB) over 50%. However, KE’s revenue from new home transaction services and home renovations has increased by 8.6% and 13%, respectively, from a year ago. Revenue from home rentals skyrocketed 78% from a low base. “The company began diversifying into new companies in 2021, and now both its home renovation and rental businesses are growing rapidly, with gross revenue contributions accounting for more than 40% of the group’s overall,” said analysts at Barclays. “We look forward to both companies providing meaningful revenue and profits in the future.” —CNBC’s Michael Bloom contributed to this report.
