KE Holdings Inc. at a Crossroads: Executive Share Sale Meets Aggressive Buybacks

Deep News12-16

KE Holdings Inc. (NYSE: BEKE) finds itself at a strategic inflection point as executive share disposals coincide with aggressive stock repurchases, sparking market scrutiny amid industry headwinds.

On December 9, regulatory filings revealed that co-founder and CEO Stanley Peng plans to sell 1.4 million ADS (equivalent to 4.2 million Class A shares), valued at $24.05 million (≈¥170 million). The proceeds will fulfill Peng's April pledge to donate 9 million Class A shares—marking his first divestment since BEKE's 2020 IPO. BEKE's shares dropped 4.78% in Hong Kong and 3.86% in New York following the announcement.

Simultaneously, BEKE has ramped up buybacks to stabilize investor confidence. A December 15 disclosure showed $3 million spent repurchasing 519,500 shares on December 12 at $5.74-$5.82 per share. YTD through Q3 2025, the company has deployed $675 million in buybacks—a 15.7% YoY increase—including a record $280 million quarterly repurchase.

The dual moves unfold against challenging fundamentals: 1. **Executive Compensation**: Peng's reported remuneration surged from ¥8.48 million in 2021 to ¥713 million in 2023, with BEKE attributing this to WVR structure compliance requirements via restricted stock grants. 2. **Operational Pressures**: - Q3 2025 revenue grew marginally by 2.1% to ¥23.1 billion, driven by 45.3% rental service growth offsetting 3.6%/14.1% declines in existing/new home transactions. - Gross margin contracted 130bps YoY to 21.4%, with net profit plunging 36.1% to ¥747 million. 3. **Strategic Pivot**: The "One Body Three Wings" strategy (adding home development to rental and renovation businesses) shows mixed results—rental yields just 8.8% despite revenue growth.

BEKE confirmed workforce optimization affecting ≈650 employees (0.5% of 131,800 total headcount), contradicting market rumors of 30% cuts. Cash reserves dwindled to ¥55.7 billion from ¥61.6 billion at year-start due to sustained buybacks.

As the property downturn persists, BEKE's ability to balance legacy business stabilization with new growth drivers—while maintaining capital market confidence—will determine its trajectory through this transitional phase.

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