KE Holdings Inc. (NYSE: BEKE), a leading integrated online and offline platform for housing transactions and services in China, saw its stock plummet 6.10% in pre-market trading on Tuesday. The significant drop comes on the heels of two major announcements from the company: a substantial cash dividend and the release of its fourth-quarter financial results.
In a press release, KE Holdings announced that its board of directors had approved a final cash dividend of US$0.12 per ordinary share, or US$0.36 per ADS, amounting to approximately US$0.4 billion in aggregate. While dividends are often viewed positively by investors, in this case, the market reaction suggests that some participants may be concerned about the company's use of cash reserves or its future growth prospects. The dividend is set to be paid in late April to shareholders of record as of April 9, 2025.
Additionally, the company released its fourth-quarter financial results, reporting adjusted earnings per ADS of $0.16 and net revenues of $4.3 billion. The market's negative reaction could indicate that these figures fell short of investor expectations. This downward movement also contrasts with the recent strong performance of Chinese stocks, which have been outperforming U.S. equities. It's possible that some investors are taking profits after the recent rally in Chinese tech stocks, contributing to the pre-market decline in KE Holdings' share price.
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