Thank you, operator. Good evening and good morning, everyone.

Welcome to KE Holdings Inc., or Beike's, fourth quarter and fiscal year 2025 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.

Xu will provide an overview of our business updates and financial performance, then Mr. Peng will share more our strategic updates and thinking.

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 know 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 know that the Chinese translation is for convenient purpose only.

In the case of any discrepancy, management statements in their original language will prevail. With that, I will now turn the call over to our CFO, Mr.

Tao Xu. Please go ahead, Tao.

Thank you, Siting. Hello, everyone.

Thank you for joining our 2025 Q4 and full year earnings call. To begin, I would like to provide a summary of our financial highlights for the fiscal year of 2025.

In 2025, in response to evolving customer needs, we initiated a strategic pivot from sales-driven to efficiency-driven growth. To optimize our business model, better leverage technology, and improve our cost structure and unit economics, we implemented a series of initiatives.

These efforts are laying the foundation for more sustainable growth while strengthening the stability and flexibility of our earnings model. First, our full year revenue remained relatively stable amid market fluctuations, outperforming the broader industry trends.

This performance was underpinned by a more diversified and counter-cyclical business structure. Revenue from non-housing transaction business accounted for record high of 41% of total revenue.

The internal structure of the housing transaction services also improved, with existing home GTV accounting for 67.6% of our total GTV, reflecting our focus on market segments with greater structural growth potential. Notably, the GTV contribution from connected brands further increased to approximately 63% of our existing home GTV, indicating higher contribution of revenue with lighter business model.

Existing home platform service revenue was basically stable year-on-year, also demonstrating the resilience of our platform business model. Second, our operational efficiency improved and cost structure was optimized, laying foundation for future profitability expansion.

In our existing home business, fixed labor costs recorded a sequential decline for the four consecutive quarters throughout the year, significantly enhanced the profit elasticity. By the end of the year, we had seen release of operating leverage with the contribution margin of existing home business rebounding sequentially in Q4.

In our new home business, both variable cost ratio and fixed personnel expenses decreased year-on-year, driving a 0.2 percentage point year-on-year increase in the full year contribution margin. The home renovation business significantly narrowed its operating losses and home rental services turned profitable at operating level for the full year, with their contribution margins rising by 0.7 percentage point and 3.6 percentage points year-on-year, respectively.

The overall operational efficiency also continued to improve, with operating expenses ratio down 1.4 percentage points year-on-year. Third, we remained steadfast in our commitment to delivering active shareholder returns.

In 2025, our total share repurchase reached approximately $921 million, a year-on-year increase of around 29%. Furthermore, we are pleased to announce a final cash dividend plan for 2025 of approximately $0.3 billion, bringing our full year total shareholder return to approximately $1.22 billion, a year-on-year increase of around 9%.

This accounts for approximately 170% of our 2025 non-GAAP net profit, far exceeding the proportion in 2024. Turning to our Q4 performance, due to the high base in the same period of 2024, our GTV and revenue saw a notable year-on-year decline.

Our GTV reached RMB 724.1 billion, representing a decrease of 36.7% year-on-year. Revenue was RMB 22.2 billion, down 28.7% year-on-year.

As a result of the decline in transaction scale, our gross profit margin was 21.4%, a year-on-year decrease of 1.6 percentage points. Q4 GAAP net profit was RMB 823 million, down 85.7% year-on-year.

Non-GAAP net profit was RMB 570 million, representing a year-on-year decline of 61.5%. It is important to note that our bottom-line performance in Q4 was partially affected by one-off expenses related to our cost optimization initiatives.

While these adjustments weighed on near-term profitability, they are helping us to streamline our cost structure and position the company with greater operating leverage going forward. With that overview, I'd like to provide some details on the financial performance of each business segment.

In our existing home business, due to the relatively higher base in the same period last year, the scale of our existing home transaction business declined in the fourth quarter, while the profitability improved. GTV from the existing home business reached RMB 482 billion in Q4, reflecting a 35.3% decrease year-on-year and a 4.7% decrease quarter-on-quarter.

Revenue was RMB 5.4 billion, down 39% year-on-year and 9.2% quarter-on-quarter. GTV outperformed the revenue year-on-year was mainly due to the higher GTV contribution from the existing home transactions facilitated by connected agents, for which revenue are recorded on a net basis.

On a quarter-on-quarter basis, GTV outperformed the revenue was mainly driven by the structural shift as the revenue contribution from the rental brokerage services decreased amid seasonal fluctuations, which had relatively higher take rate. In this segment, revenue from platform service decreased by 19.9% year-on-year, significantly outperforming the overall GTV decline and demonstrating the resilience of the platform model.

Despite the year-on-year adjustments and sequential decline in revenue, the contribution margin of the existing home business reached 40.4%, remaining stable year-on-year and rising 1.5 percentage points quarter-on-quarter. This resilience in profitability against external volatility is the direct result of our disciplined headcount control and our focus on organizational efficiency in 2025.

For new home business, affected by high base, the scale declined year-on-year, with profitability improved. GTV reached RMB 207 billion in Q4, a year-on-year decrease of 41.7% and a sequential increase of 5.5%.

Revenue from the new home business was RMB 7.3 billion, a year-on-year decrease of 44.5% and a sequential increase of 9.4%. GTV outperformed the revenue year-on-year was mainly due to the higher base of monetization rate, while revenue outperformed GTV quarter-on-quarter primarily due to the seasonal factors.

Even with the significant scale fluctuations, the contribution margin of the new home business rose to 28.3%, an increase of 2.6 percentage points year-on-year and 4.2 percentage points quarter-on-quarter, benefiting from the cost structure optimization driven by regional operations. For home renovation and furnishing services, revenue reached RMB 3.6 billion in Q4, a year-on-year decrease of 12% and a sequential decrease of 15.9%.

This temporary softening in revenue reflect our prudent balance between scale and risk, as we proactively optimized our channel structure and moderate pace of certain non-brokerage channels. Contribution margin was 28.8% in Q4, down 0.9 percentage point year-on-year and 3.2 percentage points quarter-on-quarter, mainly because we made provisions for potential warranty costs of the home renovation orders still under warranty period at end of 2025 based on the principle of prudence.

Excluding this impact, our core cost structure continued to improve. This increased centralized procurement have led to sustained savings in material costs.

Turning to our home rental services, revenue reached RMB 5.4 billion in Q4, a year-on-year increase of 18.1%, with profitability improved. The growth in revenue was mainly driven by the rapid growth in the number of the rental units under management.

By the end of Q4, we had over 700,000 rental units under management, a year-on-year increase of around 62%. On sequential basis, revenue saw a slight decrease of 5.5%, mainly due to change in accounting methods brought by product model upgrade.

The Carefree Rent business has continued to iterate towards a lighter and lower-risk product model, leading to an increase in the proportion of rental units with revenue recognized on a net basis, which has a temporary impact on the revenue scale. However, this does not change the robust growth trajectory of our management scale or the service capability.

Meanwhile, the contribution margin of home rental services was 10.4% in Q4, up 5.9 percentage points year-on-year and 1.7 percentage points sequentially, mainly driven by two factors. First, the structural improvements from the ongoing shift towards a lighter product model.

As of the end of 2025, the proportion of rental units with revenue recognized on a net basis has exceeded 30%. Second, operational efficiency gains that optimized our unit economic model.

Through the process restructuring and professional role specialization, we have significantly improved the productivity of property managers, leading to notable optimization of labor costs. In addition, the gradual penetration of AI technology across internal operation value chain has laid foundation for large-scale expansion and sustained profitability of the business.

In Q4, our revenue from emerging and other services increased by 4.5% year-on-year and 60% quarter-on-quarter to RMB 459 million. Now, moving to other financial metrics in Q4, including our costs and expenses, profitability, and cash flow.

Our store costs were RMB 710 million in Q4, a year-on-year decrease of 9.6%. This was primarily driven by the optimization of rental costs for our Lianjia stores and the refinement of our store structure.

On sequential basis, store costs increased by 7.2%, primarily due to one-off expenses from the store closures. Q4 gross profit decreased by 33.7% year-on-year to RMB 4.8 billion, remaining relatively flat sequentially.

The gross margin was 21.4%, a year-on-year decrease of 1.6 percentage points, mainly due to the declining revenue contribution of the existing home and new home segments, which have relatively higher contribution margins. This impact is partially offset by the year-on-year gross profit margin expansion of the home rental business.

Our gross margin was roughly flat quarter-on-quarter. In Q4, GAAP operating expenses were RMB 4.9 billion, a year-on-year decrease of 20.4% and a sequential increase of 13.3%.

The quarter-on-quarter increase was mainly due to one-off expenses related to the cost optimization initiatives. Excluding this non-recurring impact, the trend of operating expenses is fully consistent with our efficiency improvement efforts.

These expense optimization initiatives position us for greater operating leverage going forward. To break down the components: G&A expenses were RMB 2.3 billion, down 23.9% year-on-year, mainly due to the reduced bad debt provisions and lower share-based compensation.

The 20.8% sequential increase was mainly due to the aforementioned one-off optimization costs. Sales and marketing expenses were RMB 1.9 billion, down 17.7% year-on-year, mainly due to the lower personnel-related expenses driven by operational efficiency improvements.

The 11.7% sequential increase was mainly due to the seasonal marketing and promotion expenses. R&D expenses were RMB 750 million, roughly flat year-on-year and up 2.3% quarter-on-quarter, mainly due to the aforementioned one-off optimization costs.

Moving to our bottom-line performance: our GAAP operating losses was RMB 147 million in Q4, compared with a profit of RMB 1.01 billion in Q4 of 2024 and RMB 608 million in Q3. The operating margin was negative 0.7%, a year-on-year decrease of 3.9 percentage points and a sequential decrease of 3.3 percentage points.

The non-GAAP income from operations totaled RMB 323 million, decreasing 81.6% year-on-year and 72.5% quarter-on-quarter. The non-GAAP operating margin was 1.5%, a year-on-year decrease of 4.2 percentage points and a sequential decrease of 3.6 percentage points, mainly due to the increase in the operating expenses ratio.

Finally, GAAP net income totaled RMB 82 million in Q4, down 85.7% year-on-year and 89% quarter-on-quarter. Non-GAAP net income was RMB 570 million, falling 61.5% year-on-year and 59.8% quarter-on-quarter.

Moving to our cash flow and balance sheet, we generated net operating cash inflow of RMB 1.9 billion in Q4. In 2025, our full year net operating cash flow was below the profit performance, mainly affected by the timing factors in working capital, including the payment of accrued bonus from the previous year and the change in contract liability in our home renovation business due to order intake moderated.

Excluding the impact of above timing factors, our net operating cash flow performance was broadly consistent with profitability. Our new home accounts receivable turnover days was 44 days in Q4, a sequential decrease of approximately 10 days, remaining at a healthy level.

In addition to spending approximately $246 million on share repurchase during Q4, our total cash liquidity, excluding customer deposit payable, remained at around RMB 68.7 billion. With a robust cash reserve, we place high importance on shareholder returns.

We spent approximately $921 million on share repurchase for the full year of 2025, representing approximately 4.1% of total share outstanding at end of 2024. Our track record reflects our consistent dedication to fulfilling our promise to shareholders.

Since the launch of our share repurchase program in September 2022, we have repurchased a total of approximately $2.5 billion in shares at end of 2025, a total reduction of approximately 12.6% of company's total issued shares prior to the program launch. On top of this robust shareholder return, we are pleased to announce a final cash dividend plan totaling approximately $0.3 billion, which will be funded by surplus cash on our balance sheet.

With this, our total shareholder return for 2025 significantly exceeded our non-GAAP net income, representing around 170% of our non-GAAP net income for the year. Overall, in 2025, we placed greater focus on improving operation quality and resource allocation efficiency while continuing to optimize our business mix, cost structure, and expense discipline.

Our current cost structure is more streamlined, the profit model is clearer, and the profitability quality of each business segment has improved. We have also adopted a more comprehensive and prudent approach for the pace of our emerging business, keeping investments and risk controlled, which has ensured a sound balance sheet.

Looking ahead to 2026, we remain to improve the financial efficiency and strike a balance between efficiency and growth. We will continue to improve our earning quality, optimize our capital allocation structure, while safeguarding our long-term competitiveness, thereby creating sustainable value for our shareholders.

Thank you. Next, I would like to turn the call to our Chairman and CEO, Stanley.

Thank you, Tao. Good evening, everyone.

Thank you for joining us today for Beike's fourth quarter and full year 2025 earnings conference call. Over the past year, we have seen many changes in the market.

For example, the transaction structure is evolving. The share of existing home transaction in China's housing market continues to increase.

In 2025, the number of existing home transactions nationwide hit a historical high. The new home market is also seeing greater differentiation, with higher quality and new standard projects attracting stronger market demand.

More and more young people are choosing to rent, while rental yields are gradually improving. Customer transaction behavior is also changing.

Housing information is becoming increasingly abundant. Yet, the decision-making process is becoming more complex.

Both buyers and sellers are taking longer to complete transactions. The cost of making a mistake is much higher now, and consumers are more and more cautious.

Buying a home used to be a relatively easy decision. Today, it's a balancing act that can require a careful reallocation of family assets.

At the same time, something have not changed. The overall demand for better living remains stable, and consumers' demand for safe, professional, transparent, and reliable services is still strong.

By looking at what has changed and what has stayed consistent, we can tell two very important things. First, China's residential market remains largest and most valuable housing market in the world.

Second, the housing service industry has made a fundamental shift in its approach. Today's consumers need more professional services that offer certainty in decision-making.

The industry is entering a new stage where core competency will no longer be defined by resource scale, but by service capability and operational efficiency. Ultimately, creating value for customers will be the only stable source of our long-term growth.

Amid this trend, Beike continued to evolve in 2025. First, we improved our operational governance, creating more rooms for long-term strategic transformation and enabling us to continue driving progress across the residential service industry.

Second, we upgraded our strategy. Leveraging data and AI, we are rebuilding our service logic around customer value.

Through greater value creation, we aim to improve the platform's overall customer coverage, resource conversion efficiency, and unit outputs. Our growth model is therefore shifting from one driven primarily by the scale of agents and stores to one driven by efficiency and value creation.

In the past, we focused on expanding the number of stores, listing coverage, and lead volume. Going forward, we will focus more on delivering greater certainty in transactions for customers, improving matching precision, and strengthening the unit economics.

Specifically, we are working in four key areas. First, upgrading transaction services into full-process decision support services, improving professionalism and certainty in the service process.

Second, optimizing resource allocation through data and AI so consumers can receive high-quality, better-matching services. Third, embedding AI capabilities into our service workflows, helping service providers and the platform deliver more professional, people-centric services.

Fourth, building diversified service capabilities across the broader residential ecosystem to meet customers' full range of housing needs. Next, I will walk you through the progress of our major business segments in 2025 and share some of our thinkings.

For existing home business, the platform facilitated RMB 2.15 trillion in GTV from existing home transaction in 2025. Within that total, the number of existing home sales transaction increased by more than 10% year-over-year, reaching a record high.

At the same time, transaction volume from platform-connected stores increased by 15% year-over-year. These two figures highlight the resilient demand in the existing home market and the strengthening of our platform model.

The overall scale of agents and stores on the platform remained stable, with more than 58,000 connected stores and over 445,000 agents at the year-end. In terms of productivity, in 2025, the average number of existing home transactions per connected agent increased by 6% year-over-year, rising from less than two transactions per agent in 2022 to more than three.

For our directly operated Lianjia business, we proactively optimized store network and agent structure in 2025. We focused on high-efficiency capability and deeper operations in core cities.

After these adjustments, Lianjia's per-agent productivity in core cities improved, indicating we are gradually achieving a healthier balance between scale, discipline, and productivity improvements. Operationally, we upgraded our lead allocation mechanisms and refined tiered services, ensuring that high-quality clients receive services better matched to their needs.

We also continued upgrading our service model to adopt a more consultative approach, moving beyond simple property tours and matchmaking toward deeper support for decision-making. In today's market environment, customers are not short of information.

What they lack it is assistance in making judgment. AI is becoming a new productivity engine for our industry.

Property transactions are not standardized commodity transactions. They involve both rational analysis and emotional judgment.

They require both data support and real-world offline experience. In the past, the industry has not done a good job of structuring the rational parts of the process, nor has it placed emotional aspects where they create the most value.

In some cases, emotional judgment has even been used to replace decisions that should have been made rationally. When these two elements become intertwined, it inevitably leads to a loss of efficiency.

AI can make the rational parts of the process extremely rational, while amplifying the value of the human and emotional aspects that must be handled by people. In our industry, machines can process data, but true judgment, explanation, and trust still need to come from people.

AI cannot be ignored, nor can humans be replaced. This is why our strategy is to combine human expertise with AI capabilities.

We are embedding AI directly into our core operational scenarios across the platform. For example, in our housing transaction business, AI marketing assistants help agents automatically generate marketing materials.

AI simulator tools also help service providers practice through customer interaction scenarios and continuously improve their professional capabilities. Going forward, AI will act as a copilot for service providers across the entire customer life cycle.

This includes demand identification, precise matching between agents, homes, and customers, pricing decision support, and process automation. Over time, AI will help package the expertise of those top-performing service providers so that these professional skills can be shared and used across the platform.

New home business: transitioning from channel dividend to structural efficiency. In our new home business, we are shifting from relying on channel distribution advantages to driving growth through structural efficiency improvement.

In 2025, Beike facilitated RMB 890.8 billion in new home GTV. Despite a volatile market environment, we still to outperformed the broader market.

Building on our growing listing supply and channel sales scale, we are now driving sustainable growth by improving structural efficiency. This includes optimizing the mix of customers, projects, and service providers, as well as improving matching precision.

For home buyers, we are strengthening capabilities in customer demand identification, cross-project comparison, service providers matching, and decision support. For developers, we are beginning to provide early-stage project positioning insights while also offering integrated marketing and sales services in the later stage of project salesroom.

For service providers, we continue to refine evaluation system and operational tools, and refine our resource allocation mechanisms, ensuring that agents with stronger conversion capabilities are matched with the right resources. Our goal is to upgrade the new home business from a model focused on traffic distribution to one that delivers greater certainty of results for all participants in the ecosystem.

New business: from scale exploration to profit quality and sustainable models. Beyond brokerage services, our home renovation and furnishing and home rental business both entered a healthier stage of development in 2025.

Across both business segments, we are placing great emphasis on profit quality and on building sustainable and replicable operating models. This is the foundation for this business to scale over time.

In the home renovation and furnishing segment, full-year revenue grew by 4.4% to RMB 15.4 billion, while profitability improved meaningfully. Contribution margin increased to 31.4%, up 0.7 percentage point year-over-year, and operating losses narrowed significantly.

Over the past year, we have focused on advancing product standardization and design digitalization. Through a system of packaged and modularized product offerings, as well as an AI and BIM-enabled online design workflow, we are gradually turning design capabilities into system capabilities.

This helped reduce service variance and improve conversion efficiency. At the same time, we have been advancing supply chain integration and building standardized delivery systems while improving the customer experience.

These efforts have also enhanced profitability, with gross margin increased, losses narrowing significantly. The home renovation business is evolving from a project-based model reliant on individual experience to a more scalable and replicable service model.

We have also established a clear path toward long-term profitability. In our home rental service segment, the number of managed units exceeded 700,000 by year-end, representing a 62% year-over-year increase.

The business achieved full-year profitability, with contribution margin improved to 8.6%, up 3.6 percentage points year-over-year, demonstrating a meaningful improvement in profitability. We continue to upgrade the product structure toward lighter, more resilient, and more controllable models, while strengthening unit economics at the individual property level.

By redesigning our workflows and introducing specialized roles, the operational efficiency of core service providers continued to improve. AI capabilities are gradually being embedded into key areas, including property sign-up, pricing support, lease management, and operating strategy.

This helps reduce operational risk, including increase leasing efficiency, and optimize cost structures. With these improvements, our rental business is forming a more stable profitability profile and more consistent cash flow.

Overall, our new business are moving from a phase of scale exploration into a stage focused on business model validation and profitability improvement. As these models mature and technology adoption increase, they will further diversify our revenue structure, strengthen resilience across market cycles, and better serve consumers' broader residential needs.

At the organizational level, we are also advancing structural optimization and rebuilding capabilities. The purpose of an organization is not simple to manage metrics, but to continuously improve the customer experience.

We are streamlining organizational structures, simplifying management layers that do not directly create customer value, and encourage managers to move closer to the frontline to better understand and create customer value in real operating scenarios. In terms of capital allocation, while maintaining a strong cash position and the ability to invest for the long term, we continue to deliver meaningful returns to shareholders.

In 2025, we repurchased approximately US$920 million in shares, representing about 4.15% of our total shares outstanding at the end of 2024. We also announced a final cash dividend.

In total, shareholder return for the year was approximately US$1.22 billion, significantly exceeding our non-GAAP net income for the year. I believe our long-term advantage lies in the combination of our organizational efficiency and capital efficiency.

For 2026, we maintain a neutral market view. Given the scale of China's real estate market and the continued differentiation in demand structures, long-term value will not be driven by just buying traffic or adding more labor.

Instead, it will be determined by how deeply we understand customer needs and by the systematic service capabilities we build around the entire customer lifecycle. For Beike, 2026 will be a year of validating our decision-support service model.

We will focus on testing how this model improves conversion rates and unit economics. 2026 will also be a year of strengthening our service and organizational capabilities.

These capabilities will allow us to demonstrate greater operational resilience as the industry stabilizes. In the new cycle, true leadership will not come from scale, but from capability.

The foundation of capability, we believe, ultimately lies in only one thing: that is, continuously creating real and verifiable value for our customer. With that, we can now move to the Q&A session.

Thank you.

好的，感谢管理层接受我的提问。那我的提问是关于我们的人店效率的。那我们看到公司在2025年进行了一些人店结构的调整，那想请教一下我们目前看到的这个经纪人效率有没有受到任何影响？那如果今年有所回暖的情况下面，那我们是否会有足够的弹性去应对或者是拿到更多的市场份额？那之后我们在效率驱动的增长的这个战略下面，我们还会有哪些具体的执行？那我很快翻译一下。Thank you, management, for taking my question. My question is regarding our operating efficiency enhancement on the store level and agent level.

I was wondering, after the restructuring and adjustments, have we observed any change in terms of agent efficiency? If this year the overall market recovers, do we have enough power to gain share?

Going forward, what are our execution plans in terms of future efficiency-driven growth strategy? Thank you.

Thank you, Timothy. First, a strategic upgrade from scale-driven expansion to efficiency-driven growth is a natural and inevitable outcome of the evolution of our platform business.

What this transition really means is an upgrade in the way value is created. By creating great value for customers, we aim to improve the penetration of community-based residential services, increase the conversion efficiency of resources, and ultimately drive the business growth.

This is, in fact, the opposite of a logic of simply cutting capacity or contracting the business. To understand this evolution, we need to ask a more fundamental question: What truly determines the capacity in our industry?

What are the core production factors and the production function? What customers truly need is not simply more agents or more stores, but higher quality and more reliable decision support.

This includes more precise matching, more effective marketing solutions, and more comprehensive home buying planning. What we are doing is reallocating resources from nominal capacity to effective capacity, concentrating our organizational efforts on the areas that genuinely solve customer problems.

Against this backdrop, in 2025, we have taken several steps around our agent and store network. First, with the Lianjia business, we have concentrated resources on high-performing stores and agents to improve operational efficiency.

Going forward, we will further flatten our management structure so that managers with strongest customer service capability can stay closer to the frontline to create value. At the same time, while codifying and embedding the high-quality service capabilities into platform, we elevated division of labor system, rather than leaving them dispersed among individuals.

Second, on the broader platform side, we continue to expand the scale of agent and stores, but with a greater emphasis on quality and efficiency. At the end of 2025, the number of active connected store and agents continue to grow steadily year-on-year, increasing by 21% and 7%, respectively.

At the same time, while optimizing the structure of the network by identifying and amplifying the value of high-performing, high-rated store and agents, in the fourth quarter, agent productivity improved sequentially. In cities excluding Beijing and Shanghai, the lead-to-conversion rate for existing home sales increased by around 8% quarter-off-quarter, while average per-agent commission income from existing and new home transactions increased by 2% sequentially, while also improving the efficiency through more platform-based capability, including AI-driven tools.

Third, data and AI are the most important drivers behind this evolution. By leveraging our data and AI capabilities, while redesigning many aspects of the platform, including resource allocation mechanisms, the division of roles among service providers, and the service process for both homeowners and buyers, in many areas, this represents a systematic redesign of how the platform operates.

Meanwhile, as housing decisions become more complex for consumers, our opportunity to create value also grow. Helping customers reduce the possibility of regret in one of the most important decisions of their lives, selling or buying a home, or improving the overall service experience creates significant value for each individual customer.

At the same time, it helps reduce the friction across entire market and potentially increases market turnover, effectively expanding the size of overall market. Therefore, to answer your question, the future growth and earnings elasticity of the platform will not depend on who has the largest headcount or store count.

Instead, it will depend on the expansion of platform's capability boundary, as well as those of the service providers operating on the platform. Through stronger professional services and the higher overall efficiency, we aim to earn the trust and choices of more customers.

Thank you.

谢谢给我这个提问的机会，我是广发证券的房地产业分析师郭镇。我的问题是关于新房业务。刚才因为目前新房市场面临诸多压力，开发商的去化难度增加，行业盈利下行，央国企集中度提升。刚才听到管理层提到新房业务营销模式上的创新举措，想具体问一下这些举措将如何改变公司业务趋势以及与开发商的关系？新房业务的业绩如何预期？Let me translate my question. My question is about the new home business.

The new home market is facing multiple pressures, including developers struggle with sell-through, declining profitability, and the increasing market concentration among state-owned companies. Management mentioned innovations in marketing models in the new home business.

How will these innovations change the company dynamics and the relationship with the developers? How will the performance of the new home business be sustained?

Thank you.

Thank you, Guozhen. Our view on the new home business starts from the structural change in industry.

The level of digital penetration in the new home sector remains relatively low. In the past, our operating model for the new home business was largely based on the traditional channel sales logic.

This involved allocating resources around commissions and traffic and leveraging our massive channel traffic to solve developers' sell-through issue for whole projects. This model was effective during the market expansion phase, but under current conditions, its boundary are more limited.

It can only serve certain projects and certain buyers, and the value creation for developers and especially for homebuyers is relatively constrained. We believe the new home market is entering a new stage.

For homebuyers, the concern is not whether there is enough information, but whether they can be more certain about a purchase decision. For developers, the key concern is no longer simply gaining another sales channel, but whether they can achieve more predictable sell-through results within a constrained budget.

Accordingly, we are upgrading the role of our new home business from a channel player to an integrated capability platform. Number one, the level of online integration and digitalization in the new home segment remains relatively low.

This represents a common pain points across industry, but also a significant opportunity for upgrading. We are working to enhance online decision-making support in new home journey through stronger data and product capabilities, truly helping customers solve their most difficult decision-making pain points.

Number two, we will further optimize allocation of the traffic resources by leveraging our data and system capabilities to improve the structural matching efficiency between projects and potential buyers. We aim to expand service coverage among homebuyers, broaden the top of our funnel, and ultimately improve the conversion.

Number three, we view developers as our long-term clients rather than merely channel sales partners. We aim to provide developers with integrated solutions covering the product positioning, customer acquisition, matching, and sales pace management, helping improve overall project efficiency and address key pain points.

In the long term, our goal is for the new home business to evolve beyond the transaction distribution layer and become an efficiency-enhancing platform between developer and homebuyers. As this capability evolves, our service offering and the revenue stream in the new home segment will become more diversified, and our business model will become more resilient.

We believe this evolution will be critical to sustaining our long-term competitiveness in the new home market. Thank you.

晚上好，管理层，感谢接受我的提问。我的问题是跟AI相关。那随着AI能力最近的快速发展，请问公司怎么看待AI在房地产领域的一些可能的影响？另外在贝壳公司层面，AI赋能不同业务线的进展如何？那我翻译一下。Thank you for taking my question. My question is about AI.

With the recent rapid advancement of AI, how does the company view the potential impact of AI on the real estate sector? For Beike company, how is AI being used to empower the different business lines, and what are the progress so far?

Thank you.

Thank you, Miranda, for your question. Recently, there have been many discussions about whether AI will bring a revolutionary impact to the real estate brokerage industry.

My view is that the key question is not whether AI will replace real estate agents, but rather how it will reshape the division of labor, value creation, and organizational structure of the industry. A housing transaction is fundamentally not a short, standardized consumption decision.

Instead, it is a long-cycle, multi-stage, and highly complex decision-making process. From searching for a property, to making a decision, to completing the transaction, and then to moving in, operating the property, and improve the living experience, there are many stages along the way where AI can significantly improve efficiency, and in some cases, even automate the process.

For example, information gathering, demand matching, process reminders, document generating, preliminary risk check, and workflow coordination are all standardized and repetitive tasks governed by clear rules. In this area, AI can deliver significant productivity gains.

We have already begun to see some very tangible changes internally. For example, in housing transaction services, agents previously spent a large amount of time organizing property information, creating marketing materials, and responding to repetitive inquiries.

With AI, we can now automatically generate VR video explanations, property interpretations, and communication materials for clients, allowing agents to focus more of their time on understanding customer needs and supporting transaction decisions. In our rental business, AI is also beginning to participate in property acquisition decisions, rental pricing recommendations, and listing matching.

By analyzing historical transaction data, regional supply and demand, and property characteristics, AI helped our operators more quickly determine whether a property is suitable for acquisition, recommend a reasonable rental range, and improve leasing efficiency while strengthening risk identification. Taken together, these capabilities essentially allow standardized tasks to be handled by a system, enabling service professionals to focus more on complex decision-making and client service.

At the same time, there are part of this value chain that are not easily replaced by AI. In fact, these areas may become even more important as AI develops.

For example, someone still need to determine whether what a client say they want truly reflects their underlying needs. Someone need to make pricing judgments, to dynamically coordinate between buyers, sellers, mortgage providers, title transferring process, and fulfillment risks, and someone need to stabilize expectations and feeling at the final stage of a transaction, and ultimately, someone need to take responsibility.

The core of this task is not simply information processing, but judgment, coordination, trust, and accountability. This is where human value continue to lie.

Therefore, our view is that AI will effectively split the workflow of this industry into two parts. One part will become highly automated, with efficiency improving rapidly.

The other part will increasingly concentrated on professional expertise, accountability, and high-value services. From this perspective, the value of the traditional information intermediary will diminish, while the value of transaction responsibility and housing service infrastructure will become even more important.

For Beike, this does not mean the opportunity becomes smaller. It actually become larger, because what Beike aims to build is not simply AI-driven efficiency.

Our goal is to leverage AI to further upgrade ourselves into a comprehensive housing service infrastructure. On one hand, we want information matching processes and collaboration to become far more efficient.

On the other hand, we want transaction responsibility, fulfillment assurance, and service delivery to become more reliable. There is also another important characteristics of this industry.

First, demand on the consumer side is difficult to fully articulate. Many clients cannot clearly express what they truly want at the beginning.

Second, supply is highly non-standardized. Homes are not fully standardized or commoditized products.

Their pricing, suitability, and risk level all contain significant uncertainty. Because demand is difficult to articulate and supply is highly non-standardized, this industry inherently requires people to interpret, explain, match, coordinate, and ultimately take responsibility.

Looking further ahead, AI's impact goes beyond this. As AI significantly improves the efficiency of standardized process, people will increasingly become the key variable that determines the upper bound of efficiency.

In the past, inefficiency was often constrained by process, tools, and information. As these constraints are optimized by AI, the ultimate limit of an organization will increasingly depend on the capabilities of the service professional themselves.

Moreover, the improvement in service professionals' capabilities is nonlinear. It has clear leverage effects.

As AI rests the efficiency baseline of the system, stronger service professionals can generate disproportionately greater marginal value. In other words, AI does not weaken service professionals.

It differentiates them, amplifies the best ones, and makes the upgrading of service capabilities one of the most important growth levers. For an organization, the real question is no longer whether they have AI, but whether they can organize people together with AI.

In such an environment, organizational capabilities, collaboration mechanisms, culture, and value become increasingly important. In highly efficient, transparent, and collaborative systems, it becomes even more critical to have a stable set of value judgments, unified service standards, and trusted behavior norms to connect every service professionals, every operational steps, and every interaction with customers.

From this perspective, the continued evolution of this industry will not be driven by a single force, but by four forces working together: the power of technology, which drives efficiency improvements and capability expansion; the professionalism of service providers, which determines judgment and service quality in complex scenarios; customer trust, which determine whether transaction can actually be complete and whether long-term relationship can be formed; and organizational culture and values, which determine whether the previous three forces can be continuously integrated into a stable, scalable, and evolving system. In this sense, AI will indeed reshape the industry.

It will eliminate information asymmetry, compress low-value competitive work, and amplify the value of professional services, transaction responsibility, customer trust, and housing service infrastructure. Ultimately, what determine how far a platform can go is not simply whether it has AI, but whether it can truly integrate AI, professional service providers, customer trust, and organizational culture into a continuously evolving model.

Thank you.

Stanley、Tao哥你们好，我有一个问题想请教一下关于新媒体的。就公司怎么看待新媒体？以及有一些地产的领袖或者KOL，他们通过新媒体来促进一些地产中介的一些交易，这个对公司有什么影响？我就这个问题。那我翻译一下我的问题。So my question is regarding on the new media. How does the company look at the new media?

Also, how does the company look at some of the KOL utilizing the new media to facilitate the property transaction? Thank you.

Thank you, John, for the question. Regarding the influence of influencers and public accounts on the company, my view is that whenever a phenomenon continue to attract the attention of customers, it usually reflects some real demand.

Rather than judging whether it is positive or negative, the more useful question is that needs it is actually serving, which customers it resonate with, in which situations, and what needs may not have been well addressed before. In my view, this also reflects a broader shift in the industry.

In the past, the real estate industry was largely centered around the property itself. At that stage, the key question for many customers was simply whether there was a suitable home available and whether they could buy it.

The property was the primary scarce resource, and customer decisions often revolved around the house itself. The personal needs and circumstances behind the decision were not always fully reflected in the process.

Today, the situation is changed. The industry is moving from being centered on properties to being centered more on people.

Customers are not just homebuyers in an abstract sense. Each decision reflects a set of real-life considerations, including family structure, budget constraints, lifestyle preference, education needs, commuting patterns, risk tolerance, and plans for improving or relocation.

Buying, renting, or upgrading a home may appear to be a real estate decision, but in many cases, it is essentially a decision about how people want to organize their lives. From this perspective, housing transactions have always involved complex decisions.

For a long time, however, the industry handled them more as a relatively light matchmaking process. As customer needs become more complex and personalized, the decisions is returning to its original nature.

It requires understanding, explanation, judgment, and trade-offs. Against this backdrop, the rise of self-media, influencers, and public accounts is not simply about new media channels.

What they provide is a different form of value. Their focus is not just on the property itself, but on the person behind the decision.

Through content, perspectives, and explanations, they help customers better understand the market, compare options, and reflect on their own needs. In doing so, they can help reduce decision costs and anxiety in making decisions.

Customers follow them not simple to obtain more information, but because they hope someone can help them make judgment, compare alternatives, and weigh different trade-offs. For a company, this phenomenon is both a reminder and an opportunity.

The reminder is that we should no longer think ourselves simply as an information platform that matches people with listings. Instead, we need to become truly customer-centered and focus on understanding the person behind the transaction.

The opportunity that, if we can combine content capabilities, professional service capabilities, execution capabilities, and customer trust, we may be able to build a more durable and deeper competitive advantage. Influencers can provide perspectives and influence, but in complex transactions, the responsibilities for execution, risk management, and service delivery ultimately depend on a professional service system.

Fundamentally, I do not think the key question is whether self-media will negatively impact or not company like ours. Rather, what this phenomenon remind us is that customer today need more than property information.

What they increasingly need is decision support, professional judgment, and trustworthy services centered around the individual. Companies that can better meet these needs will be better positioned in the long run.

Thank you.

感谢管理层接受我的提问。我的问题是关于家装业务的。看到公司25年家装业务营收增长是放缓，但是毛利率是有所改善的。我想问一下我们在供应链集采和交付标准化上的基建完成的进度是怎么样的？然后我们什么时候能看到家装业务实现规模化盈利的拐点？那我自已翻译一下。Thank you, management, for taking my question. My question is regarding the renovation and furnishing business.

We see the business has experienced slower revenue growth in 2025, while its gross margin improved. What's the current status of the development in supply chain centralized procurement and the standardization execution?

When shall we expect to see the inflection point for the profitability in the home renovation business? Thank you.

Thank you, Eddy. The slower revenue growth in 2025 was the result of our deliberate decision to control the pace of expansion.

Home renovation is a delivery-intensive business. If the underlying unit economics are not stable, aggressive expansion itself becomes a risk.

The liquidity challenges of certain industry players in 2025 further reinforced this pain point for us. As a result, our priority last year was repairing and validating the underlying profitability structure of the business.

From the results we have seen so far, the contribution margin has improved and our losses have narrowed significantly, which indicates that unit economics at the individual project level are becoming healthier. At the current scale of roughly RMB 15 billion in revenue, we break down improvements in unit economics into three main variables: product structure optimization; controlling explicit costs such as materials, labor efficiency, and delivery efficiency; and the reduction of implicit costs, including rework, after-sales issues, and reputation-related losses.

In 2025, our primary focus was the cost side. On explicit costs, centralized procurement across the supply chain has helped optimize our material cost structure.

We have completed centralized national or regional procurement tenders for approximately 80% of our key materials and about 60% of auxiliary materials. This has strengthened our bargaining power, improved long-term product quality stability, and reduced exposure to the price volatility.

At the same time, through the improvement in work order dispatch mechanism and also adoption of the digital design and modular tools, along with a rigorous admission, certification, and rating system, we are building a dedicated pool for high-quality delivery teams. This has meaningfully improved the productivity of both project managers and designers.

On implicit costs, we are even more focused on long-term fulfillment quality through measures such as funds escrow, service commitments, and greater standardization of and collision detection in design phases. We aim to reduce rework and delivery variability at the source, thereby improving the stability of the profitability at project level.

Looking into 2026, as unit economics continue to improve and our delivery capability becomes solidified, we plan to widen our funnel for the scale expansion in a disciplined manner. Our core approach is not simply to increase traffic, but to improve traffic conversion efficiency.

First, we will continue to optimize our product portfolio so that our offerings more precisely match the needs of different customer segments. Second, we will replicate the high-conversion showroom model built around our signing centers, better connecting existing home transaction with the renovation product experience and creating scenarios with higher certainty for decision-making.

Third, we will deliver the neighborhood-focused operating model into more cities, leveraging collaboration between the brokerage agents and the renovation service providers within specific districts to improve the overall lead-to-conversion efficiency. At the same time, as delivery becomes more standardized and implicit costs continue to decline, improvements in customer satisfaction and reputation will create a positive feedback loop, providing a stronger foundation for the future scale expansion.

Of course, it will take some time for this improvement to be fully reflected in our financial statements. Over the next two to three years, we will further integrate data flow across design, construction, and operations.

By leveraging BIM and modular component library to build productized capability, we aim to gradually transform the home renovation from a project-based business into a replicable and scalable industrialized capacity system. Thank you.

Stanley and Tao ge, thanks for taking my questions. My question is related to the home rental business.

Because in the past 2 years, the business has developed rapid profit growth, which has been a pleasant surprise. However, revenue has been contracted Q-on-Q due to the impact of the accounting treatment.

I believe it may be fairer to assess this business from the perspective of long-term unit economics. How does the company view the long-term UE trajectory and the potential for improvement in this business?

Thank you.

Thank you, Brenda. Regarding our rental business, I'd like to clarify two key aspects: the trend in business scale and the profitability structure.

First, from accounting perspective, the short-term revenue contraction mainly results from the change in accounting treatments for the new product offering of our Carefree Rent business, which moved from gross revenue recognition to net revenue recognition. Under the net method, we only recognize the service fee income, which more accurately reflect our role as asset management service provider.

This accounting treatment, along with the lighter operating model and substantially reduced risk profile under the new product offering. Importantly, this adjustment does not have a negative impact on our cash flow or the unit-level profitability per managed property.

If we look at underlying business fundamentals, the scale of our managed rental unit continues to grow rapidly. Both historically and looking ahead, the core operating metrics for this business, the number of units under management, has maintained a strong expansion.

By end of 2025, our managed home units exceeded 700,000, representing a year-over-year increase of 62%. This growth reflects improvements in product competitiveness and expansion of market demand, rather than any accounting change.

Second, in terms of the profitability model, we focus more on the continuous improvements of the unit economics at a single unit level. In 2025, the rental business turned profitable for the full year after previously operating at a loss.

The improvements in the profitability was not driven purely by the scale expansion. Looking ahead, we continue to see room for the profit growth driven by the structural improvements in unit economics.

This improvement mainly come from several factors. First, workforce productivity improvements, particularly improvements for the productivity of our key role, the property manager.

In 2025, the average monthly number of the unit acquired per property manager increased by 7% year-over-year, while the number of unit managed per person increased by 42%. Second, lower customer acquisition costs per unit.

This driven by the improvement in channel efficiency and the higher leads conversion rates, as well as stronger post-rental service experience and higher customer satisfaction, which led to a improved renewal rate among both landlords and the tenants, thereby reducing the cost of acquiring new customer. Third, optimization of the product structure.

As a proportion of our lighter asset management product increase, risk-related cost decline significantly. In particular, the upgraded product structure has made our profitability model much less sensitive to rental price fluctuation.

Overall, what we are seeing is a business where scale continues to grow rapidly, unit-level profitability continue to improve, and operational risk continues to decline. Looking ahead, the long-term evolution of the unit economics in the rental business will primarily be driven by product structure upgrade that improved profitability stability and the risk resilience, workforce productivity improvements, better channel efficiency, optimization of customer acquisition costs, and the continued benefit of scale expansion.

From a financial perspective, we are building the rental business into a segment characterized by sustained scale expansion, improving profitability quality, and increasingly stable cash flow. Thank you.

Thank you once again for joining us today. If you have any 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.