Hello, ladies and gentlemen. Thank you for standing by for KE Holdings Inc.’s Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. Please note that today’s call, including the management’s prepared 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 Li, IR Director of the Company.

Good evening and good morning, everyone! Welcome to KE Holdings Inc., or Beike’s, fourth quarter and fiscal year 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 and chief executive officer, and Mr. Tao 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 Beike’s earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to the Company’s press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in RMB. Certain statistical and other information relating to the industry in which the Company is engaged to be mentioned in this call has been obtained from various publicly available official or unofficial sources. Neither the Company nor any of its representatives has independently verified such data, which may involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information and estimates. For today’s call, management will use English as the main language. Please note that the Chinese translation is for convenience purposes only. In the case of any discrepancy, management’s statements in their original language will prevail. With that, I will now turn the call over to our Chairman and CEO, Mr. Stanley Peng.

Thank you, Siting. Hello everyone. Thank you for joining Beike’s fourth quarter and fiscal year 2024 Earnings Conference Call. Over the past year, China’s real estate industry has matured faster. We’ve seen accelerated changes; some changes are abrupt. For the past thirty years, the decision-making process for buying a home was relatively simple, and the risks of making the wrong decisions were low. The main concern for buyers was speed. When a home became available, the question was simply whether they could secure it. In this kind of market, brokerage companies grew by scaling up because the larger the network, the easier it was to access information, connect buyers and sellers, and close deals. Buyers didn’t worry much about who they were buying from; getting the home was what mattered. But now that home prices are no longer on a one-way upward trajectory, there is more uncertainty in customer decision-making, and the costs of making the wrong decision are much higher. Because of this, buyers’ needs have changed. First, they want to minimize the risks of buying a home and seek greater certainty in their purchasing decisions. Second, they prioritize ‘living well’—a subjective experience and a feeling—that is harder to capture and measure. Everyone is looking for the best possible solution. Our job, first and foremost, is to build the capability to reduce customer decision-making risks and help them find the best option. This is also how we see AI technology, both in terms of its potential and how we apply it. Whether through AI or other tools, our goal is to help customers make the best decisions and guide them to address various life challenges through better living solutions. Second, from the service providers’ standpoint, a lot of the experience and knowledge they’ve built up in the past no longer applies. Consumers are asking us more questions and their concerns are more complex. They also care more about who they are buying through, how knowledgeable they are, and whether or not they are reliable industry professionals. Service providers must be able to address these issues for their customers. The old approach of merely pushing listings to sell homes is no longer viable. Our assessment of the industry is that customers will become more selective about whom they work with. Top-tier agents will increasingly replace low-performing ones, and technology will give the best service providers an even greater edge, accelerating industry changes. These three forces will reshape the market faster than ever. Top-tier service providers will reap the rewards of greater brand premium and increased efficiency gains. At the same time, the industry will invest more in those service providers to ramp up their skills. The future isn’t about relying on past experiences; the growth potential of the industry lies in a new paradigm — enhancing service quality and empowering top-performing agents. This presents both an opportunity and new demands for the platform, requiring us to more effectively support service providers and store owners in improving efficiency. Over the years, we have achieved scale and made efforts to improve efficiency. On one hand, we’re strong in our scientific management approach. We set clear goals, break them down into precise steps, and focus on key factors that drive results. We’ve embedded these in our system and use digital tools to streamline management and boost efficiency. Now, we need to bring these capabilities to store owners and our new businesses. On the other hand, while the industry’s digitalization still has a long way to go, breakthroughs in AI technology have opened up exciting possibilities. We now see further potential to reshape service providers’ capabilities, enhance the consumer experience, and significantly improve our platform’s operational efficiency. In 2024, we launched an active platform growth strategy. As a result, the number of active stores grew by 18.3% year-over-year, reaching nearly 49,700. Our agent count rose to 445,000, increasing 12.1% year-over-year. Despite major fluctuations in the real estate market, the numbers of stores and agents connected to our platform both reached record highs in 2024, allowing us to reach more customers than ever before. In 2024, we served 8.6 million customers. That means, on average, every hour of the year, approximately 1,000 families across the country bought, rented, or renovated a property with our help. Helping Chinese people to live well is a mission that truly matters. For the full year, our GTV totaled RMB3.35 trillion. Total revenue hit a record high of RMB93.5 billion, growing over 20% year-over-year. Notably, our existing home transactions business also reached an all-time high, with GTV rising nearly 11% year-over-year to RMB2.25 trillion. Meanwhile, despite market adjustments, backed by strong trust from developers and customers, our new home transaction business generated RMB970 billion in GTV for the year, down just 3.3% year-over-year, while total revenue grew by 10% year-over-year. Our “one body, three wings” strategy has achieved interim success. For our home renovation and furnishing business, we continued to pursue scale growth in 2024, while establishing a positive cycle of scale, quality, and efficiency in Beijing. We completed renovation services for nearly 60,000 homes across more than 40 cities nationwide in 2024, connecting with over 70,000 home renovation workers, 8,000 designers, and 5,000 project managers. Our home renovation and furnishing business achieved total revenue of RMB14.8 billion for the year, a year-over-year increase of 36%. By enhancing supply chain fulfillment management and improving our system’s order dispatch capabilities, in Q4 we successfully reduced the home renovation construction timeline by over 10 days compared with last year. Additionally, our enhanced in-house after-sales maintenance capabilities enabled us to continuously elevate customer experience. In our home rental services, the number of rental units under management surpassed 430,000. In 2024, our revenue surged by 135% year-over-year to RMB14.3 billion. In terms of quality and efficiency, we have improved the experience of property owners and tenants by reshaping roles and responsibilities. Through refined operations, we saw significant improvements across various efficiency metrics, including the efficiency of second-time rentals and the average number of rental units managed per property manager. Regarding our Beihaojia business, we acquired land in several cities last year. We do not intend to become developers and build many houses ourselves. Our business logic aligns closely with our insights about the industry. By exploring this business, we aim to address the high decision-making risks faced by both developers and customers during the home-buying process while meeting consumers’ demand for ‘living well.’ We are committed to promoting the development of more high-quality homes within China’s residential industry while mitigating project-level risks for developers and other participants in the industry. This requires us to build capabilities in areas such as precise customer demand insights, deep user engagement, and data-driven decision-making. For instance, by aggregating characteristics and needs of home-seeking customers, we provide developers with targeted customer demands, enabling them to tailor their offerings accordingly and apply C2M customization. We will also set limits on heavy asset investments and gradually shift our business model toward a more ideal platform-based, light-asset model. In November last year, we successfully launched our product solution service project in Xi’an, the first case in which we generated service revenue through our product solution services. In 2024, we have also made substantial efforts in improving our relationships with various partners throughout the entire ecosystem. I believe these efforts will lay a solid foundation for our long-term success. Looking ahead, we need to be more technology-driven and more human-centric. On the technology side, the rapid advancement of technologies, particularly AI, is set to transform many aspects of work, study, and daily life, including reshaping relationships with others, altering organizational structures, and changing hiring philosophies, all of which may undergo transformations. As interactions between people become increasingly valuable, the essence of genuine service—embodying the ethos of ‘I understand you’ – will become even more crucial. Addressing the industry’s current pain points, such as the shifting needs of customers for residential services, heightened decision-making uncertainty, and increased expectations for service providers’ capabilities, we firmly believe that advancements in AI and other technologies will effectively help us tackle these challenges. With these tools, we will be better equipped to understand customers’ personalized needs, broaden the knowledge and information available to individuals, and comprehensively enhance our service quality. We will apply AI more extensively across both external and internal operations, supporting service providers in achieving higher-quality interactions. This approach will enable us to deliver genuine services while also upgrading the interfaces through which we provide such services. On the humanistic side, we recognize that we operate within a service industry where the values of empathy, customer care, and a commitment to service are paramount. While technology can facilitate these values, it is essential that each service provider actively embodies the spirit of self-reliance, self-improvement, and self-respect. By providing exemplary support to frontline agents, who in turn take excellent care of customers, we can affirm our self-worth through customer satisfaction and the recognition of their needs. This virtuous cycle translates into practices that are not only ethical but also creative. This humanistic quality will offer a new dimension to the industry’s evolution and development, making it possible to elevate consumer experiences to ‘10 times better,’ increase service provider efficiency ‘tenfold,’ and enhance the value created by our platform ‘10 times greater!’ Thank you. Next, I would like to turn the call over to our CFO, Xu Tao, to review our fourth quarter and fiscal year 2024 financials.

Thank you, Stanley, and thank you everyone for joining us. Before we dive into our Q4 performance, I would like to briefly touch on some updates of the housing market in the past year. In 2024, although the annual total transaction volume of the new home sales market was estimated to have declined by around 18%, the Chinese real estate market witnessed a significant recovery in the fourth quarter following the stimulus package policies in September. According to the National Bureau of Statistics, new home sales rose by nearly 30% quarter-on-quarter and achieved a 4% year-on-year growth in the fourth quarter. Meanwhile, existing homes demonstrated home buyers’ preference, with its proportion in total real estate market transactions continuously rising, thanks to readily available features as well as the flexible supply and price adjustment mechanism. According to the Beike Research Institute, the proportion of existing home GTV in total market GTV has risen from 40% in 2023 to 46% in 2024. Following an increase of nearly 40% year-on-year in 2023, the number of transactions in the existing home sales market further grew by more than 10% in 2024. Although the national transaction price of existing homes still declined year-on-year in 2024, the prices rose by 0.2% sequentially in the fourth quarter indicating a changing trend, with the support of policies aimed at stabilizing the market. Home upgrade demands have become stronger. For sold existing homes, the average area, and the proportion of homes with three bedrooms and above both have increased year-on-year in key cities. The opportunities in the market and Beike’s positive long-term growth strategy enabled us to continue making breakthroughs in scale in 2024. Our full-year revenue reached RMB93.5 billion, up 20.2% year-over-year. Revenues from existing and new home transaction services both grew year-over-year, reflecting our home transaction services’ solid fundamentals. Our home renovation and furnishing, home rental services, emerging and other services acted as a new growth engine, with combined revenues rising by 64.2% year-over-year, contributing 33.8% of our total revenue in 2024, up 9.1 percentage points from 2023. In particular, revenue from the home renovation and furnishing business was RMB14.8 billion, growing by 36.1% year-over-year. And revenue from our home rental services reached RMB14.3 billion, up 135% year-over-year. While achieving breakthroughs in scale, we also continuously increased our investments in improving service quality, infrastructure and researching and developing advanced technologies. We believe these efforts will lay a solid foundation for our long-term development and continue to yield returns going forward. In 2024, our gross margin was 24.6%, and our adjusted operating expense ratio was 17.7%, with an adjusted operating margin of 7.4% for the year. Our adjusted net margin reached 7.7%, bringing our full-year adjusted net income to RMB7.21 billion. Earnings quality improved as well. Our net operating cash inflow in 2024 was RMB9.4 billion, 1.3 times our adjusted net income for the year, and DSO fell by 3 days year-over-year to 52 days. Turning to our financial performance in Q4. Our total GTV was RMB1,143.8 billion, representing a year-over-year increase of 55.5%. Net revenue reached RMB31.1 billion, up 54.1% year-over-year. Gross margin declined by 2.4 percentage points year-over-year to 23%. GAAP net income was RMB578 million, showing a year-over-year decrease of 13.8%. Non-GAAP net income reached RMB1.34 billion, reflecting a year-over-year decrease of 21.6%. Looking at our housing transaction services, revenue from existing home transactions reached RMB8.9 billion in Q4, up 47.5% year-over-year and 43.5% quarter-over-quarter. GTV was RMB744.8 billion, rising by 59.1% year-over-year and 55.9% quarter-over-quarter. GTV growth surpassed revenue year-over-year, largely as a result of downsizing the value-added services for homeowners. GTV outperformed revenue sequentially mainly due to the structural changes, that is, the revenue share of the rental brokerage services declined due to seasonality. The contribution margin from existing home transaction services was 40.4% in Q4, representing a decline of 4.1 percentage points year-over-year, primarily due to increased labor costs related to our efforts to improve agents’ welfare, and a decline of 0.6 percentage points quarter-over-quarter mainly resulting from the strategic initiatives that increased agents' incentives and variable costs. In terms of new home transaction services, we significantly outperformed the market across various metrics. CRIC shows that sales from the top 100 developers were relatively stable year-over-year and increased by around 60% sequentially in Q4. In comparison, our new home GTV reached RMB355.3 billion in Q4, up 49.3% year-over-year and 56.2% quarter-over-quarter, consistently and significantly outperforming the industry. This was mainly due to the deepening of our collaboration with developers as well as our robust and finely tuned operational capabilities. Revenue from new home transactions was RMB13.1 billion in Q4, rising by 72.7% year-over-year and 69.2% from the previous quarter. Revenue outperformed GTV both year-over-year and sequentially, once again demonstrating our strong and steady monetization capabilities in new home transactions. The contribution margin from new home transaction services fell by 0.8 percentage points year-over-year to 25.6%, largely resulting from the strategic increase in variable commissions as we placed greater emphasis on building a harmonious ecosystem and delivering better rewards to agents. Sequentially, the new home contribution margin grew by 0.9 percentage points, thanks to the leverage we gained from revenue growth. In Q4, SOE developers contributed 58% of our new home sales revenue. Revenue from home renovation and furnishing, home rental services, emerging and other services grew by 38.7% year-over-year in Q4, accounting for 29.3% of our total revenue. The contribution profit of them accounted for 24.3% of our total gross profit. Our home renovation and furnishing business maintained steady growth. In Q4, contracted sales reached RMB5.3 billion, up 34.7% year-over-year. Revenue reached RMB4.1 billion, increasing 12.8% year-over-year. Our contracted sales growth rate outpaced our revenue growth rate, driven by a sharp increase in contracted sales with the real estate market recovery in Q4, while revenue recognition lagged behind. The contribution margin for the home renovation and furnishing business reached 29.8%, up 1.9 percentage points year-over-year, led by gross margin improvements in our furniture and home furnishing retail. Sequentially, the contribution margin for home renovation and furnishing business declined 1.5%, mainly due to the decline in the proportion of high-margin home renovation revenue. Contracted sales of furniture and home furnishing retail, which are not included in our home renovation package, reached RMB1.7 billion in Q4, making up approximately 31.7% of total contracted sales, an improvement of 4.2 percentage points from the same period in 2023. Our home rental services business continued to grow at an accelerated pace in Q4. Its revenue reached RMB4.6 billion, up 108.7% year-over-year, benefiting from rapid growth in the number of rental units under management. By the end of Q4, the number of rental units under management exceeded 430 thousand, compared with over 200 thousand in the same period of 2023. The contribution margin for home rental services held relatively steady at 4.6% compared with the previous quarter. In Q4, our revenue from emerging and other services decreased by 41.1% year-over-year and 9.9% quarter-over-quarter to RMB439 million. Next, let’s move on to our other costs and expenses in Q4. Our store costs reached RMB786 million, remaining generally stable year-over-year and growing by 11.8% quarter-over-quarter. This quarter-over-quarter increase was mainly due to the increase in costs associated with store renovation and maintenance. Other costs were RMB747 million, up 36.3% year-over-year and 48.8% quarter-over-quarter, primarily driven by increases in taxes and surcharges, financial services reserves, and credit losses. Gross profit rose by 39.4% year-over-year to RMB7.2 billion. Gross margin was 23%, down 2.4 percentage points year-over-year. The primary reason for the decline was the year-over-year decrease in contribution margins from emerging and other services and existing home transaction services. These were partially offset by stronger leverage from relatively stable store costs and increased total revenue. Gross margin climbed by 0.3 percentage points sequentially in Q4, mainly due to increased contribution margin from new home transaction services. In Q4, our GAAP operating expenses totaled RMB6.2 billion, up 15.8% year-over-year and 39.7% sequentially. G&A expenses were RMB3 billion, increasing 11.8% year-over-year due to the increase of personnel expense. G&A expenses grew by 55.8% quarter-over-quarter, mainly due to higher personnel expense and increased bad debt provision. Sales and marketing expenses increased by 12.7% year-over-year to RMB2.3 billion as the increase in sales and marketing expenses for home renovation and furnishing business. Quarter-over-quarter, sales and marketing expenses rose by 21.2%, mainly due to the growth in marketing expenses for housing transaction services and the increase in personnel expense. Our R&D expenses were RMB739 million, up 38.4% year-over-year and 28.9% sequentially, primarily attributed to the increase in R&D for our housing transaction services and increased investment in some pioneering research projects. In terms of profitability, GAAP income from operations totaled RMB1 billion in Q4, turning positive from a loss in the same period of last year, and increasing 39.1% sequentially. GAAP operating margin was 3.2%, increasing 4.1 percentage points from Q4 2023 and remaining flat sequentially. Non-GAAP income from operations totaled RMB1.8 billion, growing 105.1% from the same period of last year and increasing 28.7% quarter-over-quarter. Non-GAAP operating margin reached 5.6%, up 1.4 percentage points from Q4 2023 due to the decrease of operating expenses year-over-year and down 0.4 percentage points from Q3 2024 attributed to the increase of operating expenses quarter-over-quarter. GAAP net income totaled RMB578 million in Q4, decreasing 13.8% year-over-year and 50.5% quarter-over-quarter. Non-GAAP net income was RMB1.3 billion, down 21.6% year-over-year and 24.6% quarter-over-quarter. Moving to our cash flow and balance sheet. Net operating cash inflow was RMB5.2 billion in Q4. The new home DSO was 34 days in Q4, which is a testament to our effective risk management. On top of the approximately US$132 million allocated to share repurchases during Q4, our total cash liquidity remained at a high level of RMB78.7 billion, which excludes customer deposits payable. With our robust cash reserves, we continued to reward our shareholders who have grown with us through active share buybacks, enhancing capital operation efficiency and sharing the benefits of our development with investors. In 2024, we repurchased around US$716 million worth of shares, which accounted for around 3.9% of the Company’s total shares outstanding at the end of 2023. We have consistently delivered on our promise to reward shareholders. Since the launch of our share repurchase program in September 2022, we have repurchased roughly US$1.63 billion in shares as of the end of 2024, accounting for about 8.6% of the Company’s total shares outstanding before the program began. Building on our commitment to shareholder returns, we are pleased to announce that our Board approved a final cash dividend for 2024 of US$0.12 per ordinary share, or US$0.36 per ADS, to ordinary shareholders and ADS holders of record as of April 9, 2025. The total expected dividend payment will be approximately US$0.4 billion and will be funded from the surplus cash on our balance sheet. With this, our total shareholder returns for 2024 will significantly exceed our net income, representing around 113% of our net income for the year. We intend to provide shareholders with comprehensive returns in a long-term, proactive, and stable manner, aiming to share the value we create together with our long-term shareholders. As we advance through 2025, our financial strategy will accelerate value creation through three imperatives: First, ensure we make effective capital allocation to direct investments to 'One body, three wings' strategic initiatives and technology advancements, and drive sustainable growth. Second, better deploy technology to drive higher financial and risk management efficiency. Third, deliver consistent and sustainable returns to our shareholders, ensuring that our growth translates into tangible value for those who invest in our vision. This is how we engineer durability. We make sure the money we retained gets filtered through this framework – it will simultaneously fuel innovation engines, harden competitive moats, and compound value to all of our stakeholders. This concludes my prepared remarks for today. Operator, we are now ready to take questions.

Thank you. As a reminder, we only accept questions on the English language line. For the benefit of all participants on today’s call, please limit yourself to one question, and if you have additional questions, you can reenter the queue. If you are going to ask a question in Chinese, please follow with an English translation. Your first question comes from Jizhou Dong with Nomura. Please go ahead.

Thanks management for taking my questions. My question is about the utilization of the technology for Beike. So just now Stanley has mentioned that Beike is able to empower its offline stores and increase its operational efficiency through technology tools such as AI property consultant, property sourcing assistant, etc. So can I ask if the management is considering further introducing or collaborating with advanced AI large models such as DeepSeek to enhance and optimize the business operations of the company? Like for example, how can AI be leveraged across the different business areas such as home renovation, property recommendations, and customer services to further increase the user experiences? Thank you.

Thanks for your question. For how AI might impact our industry by enhancing efficiency and user experience, we can think about this from three perspectives: the service side, the supply side, and the platform side. From Consumer Services Perspective: Buying and selling real estate has become more challenging for today’s clients due to increased uncertainty and risk in decision-making. As a result, clients need access to data, knowledge, know-how, or what we now refer to as intelligence. AI can effectively address the issues customers face, leading us to conclude that AI can significantly optimize the customer experience and greatly improve the quality of services on the demand side. And secondly, from the supply side perspective, we believe that AI will enhance the capabilities of skilled agents and accelerate the industry focus on high-quality supply. For a third one, from a platform perspective, AI provides platforms with more opportunities to address efficiency challenges through innovation. We often emphasize that the core elements of the industry are quality, scale, and efficiency. Historically, our strategies through authentic property listings, building housing dictionary, service standardization, and our platform model have resolved quality issues on the service side. We also tackled challenges of scalability on the supply side through adopting a platform business model. However, the industry’s most significant challenge remains efficiency. If efficiency issues are not resolved, profitability will also be a challenge. The emergence of AI can be seen as a production factor integrated into the value chain, potentially helping us tackle quality and scale problems while also addressing efficiency challenges. This can create new opportunities for the entire platform and increase its value. Given these conclusions, we place great importance on the capabilities and potential of AI, and we have initiated a series of explorations. We have integrated our own residential industry data with advanced foundational models to develop our large language model, ChatHome, and our image large model, Dreamhome. We are iterating on these models and expanding their capabilities to support a variety of applications. Here are a few examples of these applications: For consumers, we’re currently conducting gray box testing for Pudding, an AI-powered home-seeking assistant built on Deepseek R1 and Beike’s data and our own knowledge graph, with plans to open for trial in March. This 24/7 home-seeking AI assistant combines deep industry expertise with rapid, accurate understanding of user demands and the ability to customize real-time solutions. It will help users overcome the initial challenge of high early-stage decision-making costs in home searching while also helping agents clarify client needs and improve operational efficiency. In the Realsee VR home tour scenario, through the combination of the high-precision imaging of the new generation of Galois P4 Camera and the DeepSeek-driven intelligent model, we can leverage a more refined spatial understanding capability to enhance the intelligent assessment ability for houses and improve the user experience in VR home selection and home tour. For business partners, we’ve built comprehensive solutions. For example, for property agents, we’ve conducted gray box testing for AI assistants like AI Property Selector and AI Property Listing Maintenance Assistant in several cities. We’ve also launched AI-powered tools like AI Marketing Assistant and Xiaobei Training Camp to enhance agents’ capabilities in client acquisition, demand identification, and personalized solutions. For home renovation and furnishing business, we have implemented Sheniu, the AI design tool that can automatically generate design plans for marketing visuals, and we have our self-developed BIM system with AI-driven delivery management. We also have our cloud-based intelligent construction system that can carry out AI automated construction management monitoring, AI intelligent inspection, and acceptance tools, creating an almost fully AI-enabled digital loop. For organizational efficiency, we’ve deployed five Digital AI Agents including 'Sun Xiaosheng' (Little Sage Sun), achieving efficiency breakthroughs in areas such as business analysis and operational strategy support. Let me also share some results of these applications. The first, our AI Property Service Manager already autonomously handles 60% of rental property owner management tasks during the testing. The second, Digital AI Agents like Sun Xiaosheng help business analysts save 85% of their time and save nearly 20% of the time for operational strategy teams. The third, AI programming tools also assist in generating 30% of R&D code. For 2025, we plan to increase our AI investments to further strengthen the foundational capabilities of our models, data, and solutions, while accelerating iterative application research and development. These steps will make our various AI assistants smarter and further promote AI integration and AI-native innovation capabilities throughout the organization. Finally, AI facilitates a more efficient flow of information and knowledge, which will speed up the end of old models that rely on scale to exploit information gaps. We must also break our reliance on scale. On the other hand, AI advancements make it possible for us to enter a new era. We are far from where we need to be with this development, but our advantages lie in years of accumulated industry data assets, extensive application scenarios, and a business validation environment, and early strategic planning in the industry. In the future, we will continually expand AI’s role in deeply reshaping the entire residential service process. We believe this is both Beike’s responsibility as an architect of the residential industry’s digital infrastructure and critical to creating long-term value for the industry. That’s my answer. Thank you.

Thank you. Your next question comes from Timothy Zhao with Goldman Sachs. Please go ahead.

Thank you management for taking my question. My question is regarding the property market outlook. As we have seen a pretty strong rebound of the property market since last September. Just wondering if you can share any insights on the recovery sustainability, especially regarding the trend year-to-date, and how will management team think about the market outlook for this year? And are we going to turn more optimistic about the market? Thank you.

Thank you. In 2024, the market saw many new changes. These can be summarized as unprecedented policy stimulus, new positive signals in Q4, and accelerated structural changes. Let’s look at these changes in more detail. On the policy front, 2024 has seen a stronger-than-expected policy impact. Particularly, the central government had a policy pivot on September 26 to 'stabilize the property market', with more intense, systematic, and swiftly implemented measures than before being rolled out. These policy effects brought market resilience. In 2024, the existing home market nationwide saw decreasing price for increasing volume. According to estimates from the Beike Research Institute, in 2024 the number of existing home transaction units in China rose by about 15% year-over-year, while total GTV grew by around 2% due to price factors. Particularly, with the release of new policies on September 26, the transactions recovered quickly. In Q4, existing home GTV on our platform rose by around 60% year-over-year, marking a stronger and more sustained rebound than ever before. Also, the price stabilized somewhat, ticking up 0.2% in December compared to September, marking the first quarterly increase in nearly two years. In 2024, the new home market nationwide continued to face challenges. According to official data, national new home sales declined by 18%, while new home GTV of CRIC’s top 100 developers dropped by 28% in 2024. However, a robust rebound in new home GTV during Q4 helped bolster the market throughout the year. Regarding transaction structure, it is increasingly dominated by existing homes. In 2024, the proportion of existing housing GTV nationwide increased to 46%, up 5 percentage points compared to 2023. Notably, this percentage exceeded 50% in the 30 top-tier cities. This was mainly due to the rapid decline in existing home prices, which made them more attractive to home buyers. Meanwhile, readily available existing homes have diverted demand away from new homes. On the demand mix, the rise of nearly-new existing homes met increased demands of home upgraders, which is the largest segment of buyers. According to Beike’s transaction data, the percentage of existing home sales with three bedrooms and above grew from 40% in 2020 to 55% in 2024. The proportion of nearly-new homes built within the last 10 years jumped from 27% in 2020 to 43% in 2024. For the recent market updates, let me talk about the existing home market first. Based on our platform data, the existing home market has sustained the momentum, with transaction volume rebounded more than expected after the Chinese New Year holidays. To specifically look at the existing home transaction volume. During the four weeks following the Spring Festival, the transaction volume of existing homes rose by around 40% year-over-year. Among which the tier-1 cities grew by 50%, while tier-2 cities such as Chengdu, Ningbo, and Tianjin also had robust growth. Notably, the peak weekly transaction volume surpassed the October high following the September 26 policy stimulus, reaching the highest level since March 2023, when the market experienced a 'pent-up demand-driven rebound'. Overall the market followed seasonal trends, with the momentum starting to moderate in the fourth week after the Spring Festival, while the decline was marginal, sustaining a high level. Regarding home prices, the existing home prices slightly decreased by 0.4% month-on-month, with the dip being notably smaller than the average monthly declines in 2024. We can refer to Beike’s Sentiment Index, which we compile based on the proportion of price increase adjustments among all listing price adjustments made by homeowners. The index rebounded rapidly in October last year. After reaching a low point during the Spring Festival, it has been gradually recovering, with first-tier cities showing relatively higher sentiment levels, and Shenzhen exceeding 15%. The new home market recovered mildly in a traditional off-season. During the four weeks after the holidays, new home subscriptions increased by over 10% year-over-year. Price-wise, the new home prices stabilized sequentially in February. Regarding the market outlook in 2025. We believe the market may start to bottom out in 2025. In our view, the prerequisite for overall market stabilization is achieving stability in existing home prices. According to our survey, insufficient confidence in housing price expectations is the biggest obstacle preventing people from purchasing homes. We believe the stabilization of existing housing prices depends on two factors. First, a balanced supply and demand dynamic with healthy market liquidity. Second, improved homeowner confidence, with fewer people cutting prices steeply due to urgent sales. The Beike Sentiment Index, as a leading indicator, would be a useful tool in this regard. The index above 20 for at least 6 months would demonstrate a market consensus on price stabilization. Then, further policy refinements will stimulate homebuyers' demand, driving transaction volume recovery. In some cities, the market will be shifting from 'price cuts for volume' to 'increased transactions with stable prices.' Our recent surveys indicate that the proportion of buyers planning home purchases within a year has risen to a two-year high. This reflects stronger market confidence in the short term. We will continue to monitor home viewing activity and transaction volume as key indicators. At last, stable existing home prices will also help stabilize the prices of new homes. Coupled with policies optimizing new home supply and housing repurchase programs, this will support new home sales and investment recovery, helping to restore developers’ investment and development capabilities. Achieving this stabilization chain will require more conventional counter-cyclical policies in the macroeconomic and real estate sectors to restore consumer confidence and expectations. In a neutral scenario, we expect the existing home market to realize moderate recovery in 2025, while the new home market adjustment may continue due to the complexity of risks, but its year-over-year decline may narrow. Meanwhile, we expect further structural divergences in housing transactions in 2025, reinforcing the dominance of existing homes. In particular, larger, relatively-new secondary homes that meet buyers’ home upgrade needs will become top choices. The new home market will accelerate supply-side innovation, offering upgraded products that better match evolving demand. Thank you.

Thank you. Your next question comes from Griffin Chan with Citi. Please go ahead.

Thanks for taking my question. I’m going to translate my questions. So it’s about the agency business. We have observed a continuous increase in the number of agents and stores on the Beike platform. The company has made a lot of effort and investments, and it is quite aggressive. What kind of growth did the company achieve in 2024 as a result of these investments? Will the company follow the same growth strategy in 2025, or will we consider some other, like AI, improving the efficiency as well as having a higher growth? Thank you.

Thank you. In 2024, the main focuses of our housing transaction services were promoting growth and optimizing ecosystem. With that in mind, we achieved remarkable growth in our performance, demonstrating our ability to continuously outperform the market. Our success also helped the agents and stores on our platform partially offset the impacts of market contractions. One of our key focuses last year was expanding the agent and store network. We introduced targeted incentive packages tailored to stores of different sizes to attract industry players. By the end of 2024, the number of active non-Lianjia stores on our platform exceeded 44 thousand and that of active non-Lianjia agents reached 331 thousand, up 20% and 11% year-over-year, respectively. Notably, four big new brands joined the platform, each with over 100 stores. Our goal in expanding the network is to enable industry participants to enhance their operational efficiency. That is by leveraging our customer traffic, cooperation network effect, practical tools for operations and management, and diversified business opportunities within the broader residential services sector. Within three months of joining, the per-agent efficiency of newly connected stores reached over 80% of the efficiency level of those already connected stores. Also, around 13% of newly connected stores could double the average productivity level of the platform’s existing stores within six months of joining the platform, becoming high-productivity stores. Thus, our store network expansion has delivered strong investment returns. The payback period for the investments for new stores connected in the first half of the year was at six months, with a cumulative store attrition rate of only 5% within six months of connection. With a larger network of stores and agents, we leverage digitalized scientific management to help store owners expand home listing coverage and improve conversion rates. As the scale of our agent-store network continues to expand, it becomes even more critical to deepen ecosystem governance and strengthen our relationships with all stakeholders. On our governance mechanisms: we expanded the operations of our Regional Co-Governance Councils, enabling store owners to better participate in decision-making of some platform rules and enhancing engagement. Additionally, our store points-based reward program was successfully rolled out in nine pilot cities. By year-end, 46% of connected stores received reward benefits, averaging RMB 10,000 in equivalent value per store. We also created tools like the Online Store Owner Workshop to simplify their management process, with functions such as a dashboard and traffic lead management. The satisfaction level of connected brands and stores improved throughout the year, rising by 4% from Q1 to Q4. Additionally, the monthly store attrition rates in cities excluding Beijing and Shanghai declined by 0.2 percentage points in 2024 compared with 2023, while monthly agent attrition rates dropped by 1.7 percentage points year-over-year. As Lianjia continues to serve as a key growth engine, a talent hub, and an innovation leader in the industry, we further solidified this positioning in 2024. By the end of 2024, Lianjia had over 114,000 active agents, marking a net increase of over 16,000 agents, up 17% year-over-year. The average monthly attrition rate of Lianjia agents nationwide decreased by 0.7 percentage points year-over-year to a low of 3.4%. As transactions slowed and requirements for agents became more demanding, our solution was to leverage the large-store model to enhance organizational efficiency. This model was first implemented in Lianjia, with the average number of agents per store rising to 20 at the end of 2024. Store structure continued to optimize, with the proportion of large stores reaching over 50%, an increase of 8.6 percentage points year-over-year. The average commission per Lianjia store reached 2.53 times that of connected stores, reflecting a 5.9% year-over-year growth. Talent development remains a key investment area for Lianjia. We launched a three-year leadership development program for Lianjia store managers. This initiative is to strengthen store efficiency and help enhance the platform’s ability to retain top-performing store managers. In 2025, “growth” and “ecosystem” will continue to be the key words for our housing transaction services. Meanwhile, we also strive to enhance efficiency. We will continue to ensure steady growth in our store and agent network. Meanwhile, we will increasingly drive business growth through efficiency improvements, leveraging ecosystem collaboration and digital tools. This includes implementing a comprehensive long-term store incentive program, such as a points-based reward system, to convert scale advantages into efficiency gains. Also, by utilizing more refined management tools, we will empower store owners with enhanced operational capabilities, improving regional penetration and helping more agents and stores increase their income. Regarding Lianjia’s development, we will continue to strengthen the large-store model, validating its scalability within Lianjia and promoting it to those connected stores. At the same time, Lianjia will further support the growth of our three-wing businesses, achieving breakthroughs in the community-focused model for home renovation and rental services in Beijing and Shanghai, setting industry benchmarks. Thank you.

Thank you. Your next question comes from Eddy Wang with Morgan Stanley. Please go ahead.

Thank you management for taking my question. My question is about the home rental business. We have achieved rapid growth in the home rental business. What’s the key advantage to drive this strong growth? We observed that the home rental market is still facing challenges with declining rents and the persistent oversupply. How can we maintain the stability of the home rental business, and at the same time improve profitability under such conditions? Thank you.

Thank you. In 2024, our home rental business achieved a significant scale-up and operational breakthroughs, particularly in our Carefree Rent service. Centered on 'service and efficiency,' we established a solid foundational framework for our business model. Scale-wise, revenues of our home rental services reached 14.3 billion RMB, growing 135% year-over-year, primarily driven by the expansion of Carefree Rent. The number of managed units under Carefree Rent exceeded 420,000 by the end of 2024, compared to over 200,000 units a year ago. As we operate a larger scale of properties, we have developed a deeper understanding of the high frequency, non-standard nature, long cycle, and complexity of rental services. To address this, we have broken down the non-standard services to standardized actions, undertaken by service providers who were assigned specific roles through specialization, thereby improving efficiency. For instance, offline rental services such as property handover, rental inspections, and face-to-face key exchanges are handled by rental stewards to ensure standardized handover procedures. While rental service managers handle tenant requests through centralized online management, providing 24/7 support. By year-end, nighttime service orders accounted for over 16%, aligning better with tenants’ schedules. We also deployed AI emotion radar tools to detect tenant dissatisfaction and proactively improve service mechanisms. With that, our property managers can focus on rental unit signups and occupancy, without being distracted by rental affairs. By the end of 2024, their efficiency of new unit signups increased 29% year-over-year, driving rapid growth in total housing units of Carefree Rent. Beyond organizational capabilities, we have developed the intelligent ‘AIMS’ system, utilizing AI technology to empower operations. From pricing strategies for property acquisition, inventory management, to leasing strategies, we deployed intelligent algorithms to dynamically manage traffic, pricing, and marketing strategies, enhancing labor efficiency and asset turnover. For example, in pilot cities, the system has increased the operational efficiency of service providers and managers by 40%, improved the property turnover rate by 7.7%, and shortened the turnover cycle by 11.3% since its launch. From a financial perspective, our rental business saw a sequential improvement in contribution margin in Q4. As the impact of the Q3 summer rental peak faded, the Carefree Rent experienced a quarter-over-quarter decline in new home signups and leasing. This led to a decline in expenses for operational staff as a percentage of net rental income, resulting in margin improvement. On a full-year basis, core operational metrics of Carefree Rent improved significantly. Enhanced tenant services boosted customer retention. The customer complaint rate at the end of the year decreased by more than 20% compared to the beginning of 2024. And we also conducted cost structure optimization. Improved service quality drove the 2024 tenant renewal rate to 54.4%, a 2 percentage point increase year-over-year, reducing the channel cost of re-leasing. Regarding the management of rental costs due to vacancies. On one hand, we focused on enhancing re-renting capabilities. This helped significantly reduce turnover time. Even in the Q4 off-season, the average vacancy period decreased from nearly 15 days at the beginning of the year to under 12 days in Q4. On the other hand, we continuously upgraded our product model. The coverage of our new product model, which incurs no vacancy period, continued to rise in Q4. This model enhanced our resilience against rental price volatility and reduced vacancy risks. The deposit cost per unit of our new Carefree Rent product model also dropped. This was mainly due to the increased initial leasing success rate, which rose to over 80% in 2024, up by 8 percentage points year-over-year. For 2025, first of all, we still have high hopes for the number of rental units managed under ‘Carefree Rent.’ Meanwhile, we will continue to balance scale and operation. To that end, we need to strengthen our value proposition for both tenants and property owners. The key lies in heightening our service quality and boosting re-renting efficiency. For tenants, we will further refine our role-specialization model and tailor service standards for different customer segments. For leasing efficiency, we will focus on talent development in leasing channels, leveraging AI to enhance secondary leasing efficiency, and expanding external traffic channels and value-added services, such as cosmetic home decoration to increase leasing certainty. Thank you.

Thank you. Your next question comes from Sophie Zhang with CICC. Please go ahead.

Thank you management for taking my question. And my question is regarding the home renovation business. The home renovation segment has maintained solid growth during the past year after surpassing the revenue threshold of RMB10 billion in 2023. So can management share the main drivers behind the growth and also the strategic plan of this business in 2025? Thank you.

Thank you. In 2024, our home renovation and furnishing business achieved robust growth. In terms of scale, our revenue reached RMB14.8 billion in 2024, up 36.1% year-over-year. Contracted sales amounted to RMB16.9 billion, marking a year-over-year increase of 27.3%. Specifically, contracted sales exceeded RMB3 billion in Beijing, RMB2 billion in Hangzhou, and RMB1 billion in Shanghai and Chengdu. Five other cities also achieved contracted sales above RMB500 million each. As for profitability, the contribution margin for the home renovation and furnishing business reached 30.7% in 2024, an improvement of 1.7 percentage points compared to the same period last year. Taking Beijing as an example, in 2024, the contribution margin of home renovation and furnishing business reached approximately 35%, and the pre-tax profit margin excluding the headquarter cost reached over 5%. The breakthroughs in our home renovation and furnishing business are primarily attributable to the highly efficient synergies between our housing transaction services and new businesses, as well as our enhanced construction delivery capabilities and support from our underlying digital platform. Let me share some additional details: First, deeper integration of our housing transaction services and renovation services significantly strengthened our customer acquisition ability and drove rapid growth in contracted sales. We encouraged our agents to recommend our new businesses by points-based incentive model. As a result, there has been an increase in the proportion of contracted sales by agent referrals to the total contracted sales. Second, as our contracted sales grew, we needed to strengthen our delivery capabilities. To accomplish this, we optimized dispatch efficiency and workflow, further shortening construction timelines. Our average construction timeline is around 94 days in Q4 2024, representing a decline of over 10 days in the same period last year. Meanwhile, we continued to iterate our Home SaaS system and launched Version 2.5 nationwide. By standardizing product management and unifying drawing rules, we have improved the system’s underlying data foundation. This ultimately enabled us to produce automated BIM design construction drawings and price quotes, and unified online material scheduling. About the business outlook for 2025, we have achieved further breakthroughs in business scale last year. And in 2025, our core goal for our full-service renovation business is to enhance product strength and improve delivery quality with a customer-centric approach, and improve management and operational efficiency. To that end, we intend to implement the following key initiatives: First, improve product strength with business model iteration and showroom upgrade. We plan to establish a strong brand image as a full-service home renovation provider. Based on our insights into customers’ needs, we aim to provide comprehensive renovation solutions, rather than simply selling different products. At the same time, we expect to upgrade our showrooms. We plan to implement showrooms as the core display of our offline store. We will collaborate with professional designers to create realistic showrooms and display various renderings to enhance the offline experience of customers. Second, enhance delivery capabilities and promote professionalism of project managers. We believe that long-term stable cooperation with project managers is the fundamental guarantee for the quality of home renovation delivery. We intend to take full-time project managers as the core to enhance delivery quality. And we will motivate their initiative through order allocation incentive mechanisms to improve service providers’ delivery satisfaction and reduce customer complaint rates. Meanwhile, project managers should be responsible for delivery quality and orders recommended by previous customers. Third, enhance operational efficiency. We have found that previously, there were too many service providers connecting with customers but lacking a main person in charge. With that, we have defined the 'store manager' as the 'first manager', who is fully responsible for customer needs, contract conversion, quality delivery, and business management, achieving an end-to-end management loop. We have defined the 'designer' as the 'first person in charge of renovation solutions and conversion'. We will strengthen designer training and conduct professional certification to enhance their capabilities of full-service home renovation design skills. We have also defined the 'project manager' as the 'first person in charge of quality delivery'. They will focus more on the overall management of project construction periods and construction quality. At the same time, we place greater emphasis on 'cultivating business districts'. We intend to focus on key business districts, gain a thorough understanding of houses’ layout structure and common renovation problems in advance and make the service scope of designers and project managers more concentrated, thereby improving service efficiency and quality. We have always believed that quality is the foundation of the home renovation and furnishing business. Only on a solid foundation can a strong and long-lasting building be constructed. We will continue to move forward in our pursuit of quality with even greater determination and confidence in our future development path. Thank you.

Thank you. We are now approaching the end of the conference call. I will now turn the call over to your speaker host today, Ms. Siting Li, for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact Beike’s investor relations team through the contact information provided on our website. This concludes today’s call, and we look forward to speaking with you again next quarter. Thank you, and goodbye.