Recently, KE Holdings Inc. (BEKE) has been in the spotlight again.
On one hand, Chairman Peng Yongdong sold shares to fund donations, claiming to fulfill commitments to support employees and graduates struggling amid the downturn—earning gratitude from staff.
On the other hand, BEKE's in-house developer, Beihaojia, faced dismal sales and announced it would exit property development to refocus on brokerage services.
When Beihaojia was launched, Peng was optimistic about BEKE’s foray into development, leveraging C2M (customer-to-manufacturer) models and the company’s vast transaction data for customized projects.
Over the past two years, Beihaojia aggressively acquired land in cities like Beijing, Shanghai, Guangzhou, and Chengdu, with 17 projects nationwide and estimated investments exceeding ¥7 billion.
Take Chengdu’s "Beichen S1" project as an example. In September last year, Beihaojia outbid rivals like Greentown and Yuexiu in an 82-round auction, securing a plot at ¥1.076 billion—a 42% premium and a record-high land price in Chengdu.
After 14 months of preparation, Beihaojia launched 108 units priced at ¥6.5 million on average. Yet, only 22 units were sold in the first 12 days, a dismal 21% sell-through rate.
CEO Xu Wangang admitted at a press conference that BEKE would no longer self-develop projects. Even earlier, Peng had quietly declared Beihaojia’s end after the Chengdu and Shanghai projects.
As a capital-light company, BEKE boasts a market cap of ~¥140 billion, net cash of ¥58.8 billion, and operating cash flow of ¥42 billion over five years—far outperforming traditional developers.
So why did BEKE recklessly pivot to development? The answer likely lies in unchecked leadership.
After founder Zuo Hui’s passing, Peng and co-founder Shan Yigang gained control via voting rights restructuring, raising concerns about minority control risks.
In May 2022, BEKE granted Peng and Shan 71.82 million and 53.87 million restricted shares, respectively. Amid public outcry over executive pay, Peng pledged to donate 9 million shares (just 1/8 of his award) for tenant assistance programs.
The question remains: Who can hold Peng accountable now?
(Note: All data sourced from public disclosures. This analysis does not constitute investment advice.)
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