Beike (贝壳) is growing revenue but struggling to make money as it pivots into heavier, lower‑margin businesses

Results reveal a familiar but painful trade‑off

Beike (贝壳) posted its 2025 unaudited results showing total net revenue of ¥94.6 billion, up 1.2% year‑on‑year, while net profit attributable to shareholders plunged 26.7% to ¥2.991 billion. Gross transaction volume (GTV) fell 5.0% to ¥31.8 trillion for the year and collapsed 36.7% in Q4, yet revenue rose — a scissors gap that sums up Beike’s strategic choice to prioritise scale and ecosystem over near‑term margins. Short sentence: the company is earning more, but keeping less.

Pivot to rentals, renovations and AI — but at what cost?

Under its “one body, three wings” (一体三翼) strategy Beike has pushed aggressively into rentals and home improvement. Rental services and home furnishing/netting ¥21.9 billion and ¥15.4 billion respectively now account for roughly 41% of revenue, and the company says rental operations such as “Shengxinzu” (省心租) have more than 700,000 managed units. But these businesses are low‑margin and capital‑intensive: rental contribution margin was about 8.6% in 2025 versus 39.3% for second‑hand transactions and 25.0% for new home sales. Operating cash flow turned negative — it has been reported that operating cash flow through Q3 was −¥2.288 billion — largely because Beike provides rent guarantees, vacancy cover and upfront rental payments to scale its managed portfolio.

AI is being sold as a lever, but heavy offline delivery bites

Management stresses AI is embedded into pricing, sourcing and leasing workflows and has become a central talking point at investor meetings. Yet AI can only go so far when the business requires heavy offline delivery: property management, renovations and long‑tail leasing all demand capital, dispute resolution and localized operations. Beike’s 2023 move into development via Beihao Jia (贝好家) — including self‑operated plots in Chengdu and Shanghai — reportedly underperformed sales expectations, and the group has publicly said it will discontinue most self‑operated projects. So the company faces a core question: can AI and new revenue streams offset the margin erosion from exiting the pure light‑platform model?

Why Western readers should care

China’s property sector has shifted from an incremental growth era to a stock‑market, maintenance‑and‑service era, with knock‑on effects for employment, local government finance and consumer sentiment. For Western investors and partners watching China’s platform economy, Beike’s results are a case study in what happens when a large light‑asset platform tries to become a heavy‑asset operator to protect market share — faster scale, yes; but also deeper capital exposure and thinner margins. Will rentals and renovations carry Beike’s next decade? The answer remains uncertain, and for now the company is choosing to trade profitability for a bet on a more diversified, but riskier, housing services franchise.