China-based hybrid real estate agency Beike (also known as KE Holdings) continued to outperform the market in terms of its rate of growth in gross transaction value (GTV) in 2022 and recorded an operating profit in Q4, according to its earnings announcement.

The company said that its GTV for existing homes increased 1.5% year on year (y-o-y) to RMB360 billion ($52 billion U.S.) in the fourth quarter. However, its GTV for new homes decreased 26.1% y-o-y to RMB264 billion ($38.2 billion).

As total GTV declined amid challenging housing market conditions, the company saw net revenue fall 5.8% y-o-y to RMB16.7 billion ($2.4 billion) in Q4 2022. Growth in revenue from home renovation and furnishings partly offset a decline in revenue from home sales.

Despite the slide in revenue, KE Holdings recorded a net profit of RMB372 million in Q4 2022, compared with a net operating loss of RMB933 million in the year-earlier period. In Q4 2022, operating income amounted to RMB387 million ($56 million), as opposed to an operating loss of RMB1.2 billion in the year-earlier quarter.

“Amid the challenging housing market in 2022, we underwent a strategic transformation from high-speed to high-quality growth, which not only enabled us to continue outperforming the market in GTV growth and cultivate new growth engines, such as home renovation and furnishing, but also delivered contribution margin expansion in both our existing and new home transaction services in 2022,” said Stanley Yongdong Peng, CEO of Beike.

For 2022 as a whole, revenue at KE Holdings declined by 25% y-o-y to RMB61 billion, while the company’s operating loss narrowed to RMB833 million from RMB1.4 billion in 2021.

“For the whole year of 2022, the market and our business experienced a wide range of challenges from the COVID-19 pandemic to spillover risks of developers. Facing the predicament, we took forceful actions to prioritize cost management and efficiency optimization, maximizing the value of our platform to improve the retention and acquisition of high-quality service providers,” said Tao Xu, CFO of Beike.

For the first quarter of 2023, the company expects y-o-y growth in net revenue of between 43.4% and 47.4% to between RMB18 billion and RMB18.5 billion.

“As such, with the optimized costs and expenses structure that we built in 2022, we will aim to maintain a dynamic balance between efficiency, risk management and scale expansion to support our sustained business growth and improvement of service quality,” added Xu.

Founded in 2001, Beike operates both offline stores and online platforms, including real estate brokerage brand Lianjia.

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