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KE Holdings: An Excellent Growth Candidate For Your Portfolio

Mar. 01, 2021 12:48 PM ETKE Holdings Inc. (BEKE)7 Comments


  • KE Holdings (BEKE) is a leading Chinese real estate service platform with a unique business model and technological advantage.
  • The company is a first mover in offline to online in the $3.5 trillion Chinese real estate market (more than 6.5 times the US investment volume) and is expanding.
  • This investment opportunity has a good overall upside and limited downside risks.

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Investment thesis

KE Holdings (NYSE:BEKE) is committed to building a trustworthy brand and in delivering value to customers. The company has a unique business model and a significant technological advantage over competitors. It is not unreasonable for BEKE to attain a 30% market share by 2023, as compared with only 15% in 2020. The company’s gross transaction value (GTV) grew by 50% per year in the past two years. It has a good overall upside and limited downside risks, and is expected to be profitable from 2021.


Industry context: The residential property market in China is the largest in the world, estimated at about CYN 22 trillion ($3.5 trillion) by gross transaction value) and grew by 3% year-on-year in the last year, according to CIC research consultancy in Hong Kong. Real estate digital market platform business can reach out more easily to many customers than the traditional offline business model. This is evident by the success of similar business models in other countries such as Rightmove and Zoopla in the UK. There have been attempts by other players to enter the digital domain in China but none has so far made a significant impact. Examples of other online players include Fang Holdings (SFUN) (a real estate Internet portal) and FangDD (DUO) (which connects construction developers to customers).

KE Holdings has a unique and effective business model, which integrates two previous businesses: an 18-year-old offline brokerage business “Lianjia” and a two-year old online market platform “Beike Zhaofang”. Lianjia is expanding with offices and agents in 29 cities across China. It

This article was written by

Research conducted by Dr. Tanawan P. Y. WEE, Ph.D. using a data driven and fundamental analysis investments strategy. Invested in equities with great value or growth opportunities with moderate risk levels. Writes equity research reports on select companies.

Analyst’s Disclosure: I am/we are long BEKE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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