Net Profit Plummets Yet Dividends Remain Generous, Beike's Hundred-Billion Annual Report Conceals "Risks" and "Opportunities"

AI Profit Decline: Why Does Beike Persist in High Dividends to Reward Shareholders?

Produced by Radar Finance | Text by Peng Cheng | Edited by Meng Shuai

On March 16, the trillion-dollar housing services giant Beike released its latest annual financial results.

In 2025, Beike achieved a total net revenue of 94.58 billion yuan, a slight increase of 1.2% year-over-year; however, net profit plummeted from 4.078 billion yuan last year to 2.991 billion yuan, a 26.7% decline.

In the fourth quarter alone, Beike’s quarterly net profit dropped sharply by 85.7% to 82 million yuan.

Looking at specific business segments, in 2025, Beike’s core real estate transaction business faced pressure: net revenues from existing home sales and new home sales decreased by 11.3% and 9.1%, respectively.

However, Beike’s non-real estate transaction businesses led growth last year, accounting for 41% of total revenue, reaching a record high. Notably, revenue from home renovation and furniture increased by 4.4% year-over-year, while rental services soared by 52.8%.

It’s worth noting that during the earnings conference, Beike executives repeatedly highlighted the positive impact of AI on the company’s business.

Despite the pressure on performance in 2025, Beike still chose to reward shareholders with real cash. The company spent $921 million on share buybacks and announced a final cash dividend of about $300 million, bringing total shareholder returns for the year to over $1.2 billion.

Additionally, in the recently published 2026 Hurun Global Rich List, Beike founder Zuo Hui’s widow, Zhu Yan, and her family ranked 767th with a wealth of 40.5 billion yuan, while Beike’s current Chairman and CEO Peng Yongdong was listed with 8.5 billion yuan.

Tianyancha shows that Beike went public in the U.S. in 2020 and in Hong Kong in 2022. As of the close on March 18, 2026, Beike’s stock price was HKD 44.34 per share, significantly down from the peak of over HKD 70.

Total Transaction Volume and Net Profit Both Decline

On March 16, Beike officially released its unaudited financial results for Q4 and the full year of 2025.

The report shows that in 2025, Beike’s net revenue was 94.58 billion yuan, a modest 1.2% increase from the previous year.

Profitability, however, faced greater challenges. The full-year net profit was 2.991 billion yuan, down 26.7% from 4.078 billion yuan in 2024; adjusted net profit was 5.017 billion yuan, a 30.4% decrease year-over-year.

Quarterly, in Q4 2025, Beike’s performance slowed further. Revenue for that quarter was 22.189 billion yuan, down 28.7% year-over-year.

The company explained that the decline in Q4 revenue was mainly due to high base effects from the transaction services of new and existing homes.

Meanwhile, net profit in Q4 plunged by 85.7% to 82 million yuan compared to the same period in 2024.

In 2025, Beike’s gross profit margin decreased from 24.6% in 2024 to 21.4%.

The decline in gross margin was mainly attributed to reduced contribution from high-margin existing and new home businesses, which previously contributed a higher profit rate. Additionally, the contribution margin of the existing home business fell due to increased fixed labor costs for Lianjia agents. The decrease was partly offset by higher contribution margins from rental services.

Regarding core transaction data, Beike’s total gross transaction volume (GTV) in 2025 was 3.18 trillion yuan, down 5% year-over-year.

Specifically, GTV from existing home transactions was 2.15 trillion yuan, down 4.2%; new home transactions totaled 890.9 billion yuan, down 8.2%.

In Q4, GTV declined more sharply, reaching 724.1 billion yuan, a 36.7% decrease year-over-year.

Within that, GTV for existing and new home transactions fell by 35.3% and 41.7%, respectively.

Despite significant pressure on transaction volume, Beike maintained a healthy cash flow. As of the end of 2025, total cash, cash equivalents, restricted funds, and short-term investments amounted to 55.5 billion yuan.

The company also continued expanding its store and agent network. By the end of 2025, Beike operated 61,100 stores, an 18.5% increase; active stores numbered 58,400, up 17.5%. The number of agents reached 523,000, a 4.6% increase, with 445,600 active agents, roughly unchanged from the previous year.

Peng Yongdong stated that for the directly operated Lianjia business, last year the company proactively optimized store and agent structures, focusing on high-efficiency capacity and deep operations in core cities, which improved labor productivity.

In terms of user traffic, in Q4 2025, Beike’s average monthly active users on mobile were 43.8 million, slightly up from 43.2 million in the same period last year.

Traditional Strong Businesses Under Pressure, Non-Real Estate Transactions Rise

Further analysis of the financials reveals significant changes in Beike’s business structure in 2025.

The company’s two main pillars—existing home and new home sales—performed weakly: full-year net revenue from existing homes was 25 billion yuan, down 11.3%; new home revenue was 30.6 billion yuan, down 9.1%.

Although the contribution margin of existing home sales improved slightly in Q4, the full-year profit margin from new home sales increased by only 0.2 percentage points.

Management explained that Beike’s previous operating model was more traditional, relying heavily on channel logic centered around commissions and traffic allocation. They stated, “For core projects, we leverage our large channel traffic to help developers clear inventory, which is very effective in an incremental market stage.”

However, they also acknowledged that in the current environment, this model can only serve some projects and buyers, offering limited value to developers and homebuyers. Therefore, Beike is transforming its new home business from a channel role into a full-cycle project partner.

In contrast, non-real estate transaction businesses became the key growth drivers, with revenue share rising from 33.8% in 2024 to 41% in 2025, a record high.

Among these, rental services performed particularly well, with full-year net revenue of 21.9 billion yuan, up 52.8%. By the end of 2025, Beike’s managed rental properties exceeded 700,000 units, a 62% increase.

The profit margin of rental services also rose by 3.6 percentage points to 8.6%, achieving profitability for the first time since adopting the “light management” model.

Home renovation and furniture businesses also saw growth, with net revenue of 15.4 billion yuan, up 4.4%. Their profit margins increased by 0.7 percentage points to 31.4%, and operating losses narrowed significantly.

Peng Yongdong emphasized that both home renovation and rental services are now focused on improving profitability and establishing sustainable, replicable business models, both entering healthier development stages.

He believes that the true resilience in cyclical markets comes not from scale but from continuously creating real value for consumers.

AI-Driven Business Transformation and $300 Million Final Dividend

At the 2025 earnings presentation, Beike executives repeatedly discussed AI’s role in reshaping the business.

“AI cannot be ignored, and humans cannot be replaced,” Peng Yongdong said. He believes AI can optimize rational processes to the extreme and amplify the value of emotional aspects that must be handled by humans.

Based on this understanding, Beike has adopted a “human-AI collaboration” strategy. Leveraging AI capabilities, Beike aims to enhance the platform’s overall service professionalism, resource conversion efficiency, and output per unit.

For example, in real estate transactions, AI is embedded in core processes such as marketing, customer acquisition, content creation, and professional training, further amplifying service providers’ expertise and platform efficiency.

In rental operations, AI-driven efficiency improvements include automating “receiving, listing, management,” and decision-making processes, increasing management accuracy and efficiency. Pilot regions saw a 13% increase in property management efficiency, and AI-based pricing improved rental success rates by 5.3 percentage points compared to manual pricing.

Data shows that with deeper AI integration and refined operations, the average number of second-hand deals per agent increased from 2 to 3, professional home renovation project managers now handle over 100% more orders per month, and asset managers’ managed properties grew by over 40%, all reaching record highs.

Peng Yongdong also stated that in 2026, the company will use AI to reshape its competitive barriers, further enhancing service professionalism and platform efficiency to improve the consumer living experience.

Alongside the 2025 results, Beike announced its shareholder return plan. The company emphasized its commitment to actively returning value through capital allocation.

In 2025, Beike repurchased shares worth approximately $921 million, a 29% increase from the previous year. It also declared a final cash dividend of about $300 million, paid from surplus cash on the balance sheet.

Total shareholder returns for 2025 exceeded $1.2 billion, a 9% increase year-over-year.

Since launching its buyback program in September 2022, Beike has repurchased approximately 159 million ADSs (equivalent to about 478 million Class A ordinary shares), totaling around $2.547 billion.

Looking ahead to 2026, Peng Yongdong reaffirmed Beike’s neutral market outlook. He believes China’s residential market remains the largest and most valuable globally.

However, he emphasized that the underlying logic of the tech service industry has changed dramatically. Consumers now demand more professional and decisive decision-making services. The industry is shifting from scale-based competition to one centered on professional service capabilities and efficiency.

CFO Xu Tao stated that in 2026, Beike will adopt a more cautious financial discipline, balancing efficiency and growth, continuously improving profitability, and optimizing capital allocation while ensuring long-term competitiveness.