Housing Services Platform KE Holdings Eyes $1 Billion IPO in New York

Beike is China's largest housing services provider in terms of transactions value.

Author: Anna Vodopyanova   

KE Holdings Inc., the operator of China's largest housing services platform Beike and real estate brokerage Lianjia, seeks an initial public offering in New York worth up to $1 billion.

Based in Beijing, Beike provides online and offline services related to housing transactions, including home sales, rentals, renovation, and financing.

In 2019, Beike facilitated over 2.2 million housing transactions and landed a gross transaction value (GTV) of 2,128 billion yuan ($300.5 billion), according to its preliminary prospectus filed Friday with the SEC.

Citing research by China Insights Industry Consultancy Ltd. (CIC), Beike said it was the largest housing transactions and services platform in China. As of June 30, its network counted more than 260 real estate brokerage brands and 456,000 agents in 103 cities.

Beike integrates Lianjia, KE Holdings' real estate brokerage brand, operating since 2001, according to the filing.

For the first quarter, KE reported revenues declined 13% year-over-year to $1 billion. It had turned up losses of 173.9 million in contrast to an income of $23.6 million a year ago. The company posted revenues of $6.5 billion for the full year 2019 on losses of $307.9 million

Citing the CIC report, KE said China's housing market is expected to reach 30.7 trillion yuan by 2024, growing at a compound annual growth rate of 6.6% from 2019.

KE said it intends to use the proceeds from its IPO in New York for research and development, including big data, artificial intelligence, and virtual reality. It also plans to expand its new home transaction services and diversify its services and operations, as well as expand into new locations.

Goldman Sachs (Asia) LLC, Morgan Stanley & Co. LLC, China Renaissance Securities (Hong Kong) Ltd., and J.P. Morgan Securities LLC are securing the IPO.

KE has been backed by SoftBank Group Corp., Tencent Holdings, Sequoia Capital, China Renaissance Holdings, and Hillhouse Capital. The real estate giant recently closed its latest round of funding, a Series D Plus, with $2.4 billion in new capital, as reported by TechNode.

In a letter to investors opening the prospectus, KE Holdings' founder and chairman, Zuo Hui, writes that the company will disrupt and reinvent the industry.

Hui also commented on the timing of the IPO: "We made confidential submissions to the SEC for this IPO in the midst of the global COVID-19 pandemic. Instead of holding off the IPO process, we moved forward as planned, which also reflects our belief in focusing on endogenous factors and minimizing external influences. We believe that our fundamental value, rather than external circumstances, is the key factor of a successful IPO."

KE Holdings applied to list on the New York Stock Exchange under the ticker symbol "BEKE."

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