March 25, 2023

Shell 2022 Annual Report: Improve quality and increase efficiency through the cycle, the first and second tracks will consolidate the quality of residential consumer services | Geek Park

On March 16, Beijing time, Keike, a digital service platform for the housing industry, released its financial results for the fourth quarter and full year of 2022. The financial report shows that the annual turnover (GTV) of Keike in 2022 will be 2.61 trillion yuan (RMB, the same below), the operating income will be 60.7 billion yuan, and the annual GAAP caliber net loss will be 1.397 billion yuan. In the fourth quarter, Keike’s net income was 16.7 billion yuan, exceeding the upper limit of the performance guidance and the market’s consensus expectations, and its GAAP caliber net profit was 372 million yuan.

According to the financial report, the GTV of shell housing stock fell by 23% year-on-year for the whole year, and increased by 1.5% year-on-year in the fourth quarter, both of which were better than the market level. Keike new house GTV fell by 42% year-on-year for the whole year, which was basically the same as the market. In the fourth quarter, it fell by 26% year-on-year, which was better than the market level. On a comparable basis, the contract value of Keike Home Improvement and Home Furnishing business reached 6.9 billion yuan for the whole year, a year-on-year increase of 31% against the market. The shell rental business has exceeded 120,000 units in terms of management scale throughout the year. The capability value and extensibility of the platform model have been further verified.

Peng Yongdong, co-founder, chairman and CEO of Shell, said: “The market will continue to decline from mid-2021, but we believe that consumers’ yearning for a better living will not change. The opportunity for recovery. Therefore, our hearts are very stable, and we have quickly made a series of adjustments internally to deal with short-term fluctuations and prepare for market recovery. Facing the market that is now recovering, we will practice a neutral market view and pursue growth The reactionary force. The violent market volatility is a long-term harm to the industry, and we hope that the market will recover in a benign and orderly manner.”

Xu Tao, executive director and chief financial officer of Keike, said: “Facing the difficult market in 2022, we will resolutely move closer to the front line, focus more on business essence, risk control, and efficiency improvement, and maximize the value of the platform to better attract and retain High-quality service providers, which enable us to realize that the decline in revenue is much smaller than the market adjustment, the gross profit margin has increased significantly year-on-year, and the non-GAAP net profit has increased year-on-year against the trend, effectively resisting external shocks in terms of profitability and cash flow. In 2023, the company The “One Body Two Wings” business will continue to diversify and advance, which puts forward higher requirements for stable operation, rational allocation of resources and profitability. We will continue to return to the essence of our operations, and on the basis of the optimized costs and expenses in 2022, we will make a turnaround, earn money, support business growth and improve service quality; at the same time, we will continue to strictly control risks, balance efficiency, The relationship between repayment and scale growth, in the case of accounts receivable safety, promote cooperation with upstream and downstream. “

From “scale growth”

Stepping into “Quality Growth”,

Retaining high-quality production capacity through the cold winter of the market

According to the data of the Shell Research Institute, the transaction volume of the national second-hand market will drop by 31% year-on-year in 2022, and it will drop by about 3% year-on-year in the fourth quarter. The sales of Kerui Top 100 real estate companies fell by 42% year-on-year, and fell by 30% year-on-year in the fourth quarter. Although the industry is full of difficulties and challenges in 2022, a series of extensive and in-depth regulatory measures and the consolidation of long-term mechanisms have effectively guaranteed and promoted the long-term healthy development of China’s real estate market. Keike also seized this opportunity to force self-iterative evolution, from “scale growth” to “quality growth”.

In 2022, through a series of management and operation measures, Keike will give full play to the value of the platform and ACN network effects, help stores on the platform reduce risks, improve efficiency, and protect and stabilize the supply of high-quality production capacity in the industry. Keike continues to promote the big store strategy, which has effectively improved the community’s ability to cover tenants, diversified business superposition capabilities and anti-risk capabilities. Keike helped more than 3,000 stores on the platform to reorganize throughout the year, and continued to promote the professionalization of store owners. By the end of 2022, more than 6,900 store owners have completed their professional studies at the Shell Flower Bridge Academy. At the same time, Keike builds a hierarchical infrastructure for stores and brokers, establishes standards for store and personnel capabilities, improves the management and operation capabilities of the platform and store owners for stores and brokers, and better builds a talent echelon for brokers.

At the same time, Keike promotes the ecological management of second-hand and new housing businesses, and resolutely cracks down on behaviors that destroy the ecology. Keike has built a comprehensive monitoring mechanism for C-end, B-end, and platform employees to encourage all parties to supervise and report violations. At the same time, Keke and the developer jointly promise that there will be no customer disclosure, interception, or washing of customers in the sales of new homes. Customer contact information will be hidden during the reporting and viewing process, and the sense of security of the broker’s work has also been greatly improved.

Thanks to a series of efforts throughout 2022, the structure and efficiency of brokers and stores on the Shell platform have continued to improve. In the fourth quarter, the proportion of Keike’s Class A high-quality stores in cities other than Beijing and Shanghai (hereinafter referred to as “non-beishang”) increased by 5.5 percentage points year-on-year. The average monthly turnover rate of Deyou and Beilian brokers dropped to less than 5%. The attrition rate dropped to just 3.1%.

In terms of second-hand housing transactions, Keike has restructured the distribution mechanism of second-hand business opportunities on the platform. The new business opportunity distribution is based on store performance points. The proportion of brokers who are matched with familiar housing sources has increased by 10%. Brokers are more focused on their work. To obtain business opportunities, do more Ineffective actions are greatly reduced, and customers have also received more professional services.

In terms of new home transactions, Keike has strengthened its strategy of focusing on risk control, safety, and efficiency, and insisted on not sacrificing the interests of brokers and consumers in exchange for growth. For example, we continue to iterate the developer risk assessment system to pre-manage business risks; the proportion of fast commissions reached 44% in the fourth quarter, doubling the proportion from the beginning of the year, and the security of brokerage repayments is guaranteed. The average sales volume of fast commission projects is 35% higher than that of non-quick commission projects, and developers have also obtained better sales sales. The proportion of state-owned real estate enterprises continued to increase, and their sales accounted for 45% in the fourth quarter.

The implementation of a series of measures to deepen operations, reduce costs and increase efficiency has also enabled Keike to obtain more stable profitability under the platform model. Among them, in 2022, the profit margin contributed by the stock housing business increased by 2.8 percentage points year-on-year; the profit margin contributed by the new housing business increased by 4.4 percentage points year-on-year. The bad debts of new houses have been written back throughout the year, and the number of payment days in the fourth quarter has dropped to a new low since listing, and the financial health has been effectively improved.

The linkage between the first and second tracks is consolidated

Residential consumer service quality,

“Neutral Market View”

Help users “live” better

Since the beginning of this year, under the promotion of various favorable policies, the domestic real estate market has recovered somewhat. Digital services, decoration, and house rental also provide new starting points for the release of residential consumption in the next stage. As a platform company in the housing consumption field, Keike is also constantly exploring, relying on its own capabilities and endowments, and working with industry partners to provide high-quality products and services for rigid and improved housing consumption needs, helping consumers realize “housing” and “housing” To promote the healthy development of residential consumption.

In the past year, Keike has fully integrated the organizational structure, operation process, and performance incentives of the first and second tracks. Through training and internships, it has also helped brokers acquire the knowledge and ability of decoration, and improve customer acquisition and transformation. The more comprehensive professional service capabilities of Keike One Track (second-hand and new house transaction service business) help consumers settle down better, and at the same time effectively drive the growth of home improvement business and Keike rental business. The ability of the Keike platform to extend to a wider range of industries in the new residential field has been initially verified.

Based on its experience in digital transformation of low-frequency, complex processes, heavy decision-making, and offline industries, Keike is also working hard to restructure the packaging industry. Through digitalization and online transformation of the industry, we strive to standardize construction techniques and methods, reconstruct the delivery process of hard decoration construction, customized furniture delivery process, and reconstruct the management and incentive mechanism of service providers based on quality service, and the dispatching mechanism, etc. link processes, and establish scientific management capabilities. In the past year, Keike has iterated the Home SaaS 2.0 system, which integrates the internal control management of Shengdu and the refined management capabilities of quilts, which can realize the online operation process of the whole decoration/new retail, and the integrated design of the whole process of BIM to support the construction Strong management of construction period, quality, material and quality in delivery.

In the fourth quarter of last year, real estate support policies on both ends of supply and demand were further rolled out. Housing prices have stopped falling this year and market sentiment has improved. Keike will continue to firmly implement corporate responsibilities, remain pragmatic and rational, always uphold a neutral market outlook, and actively support and adhere to the positioning of “houses are for living in, not for speculation”.

“Looking forward to 2023, in the face of recent market recovery signals, based on a neutral market view, our first-track strategy will be relatively consistent. On the basis of reducing costs, increasing efficiency and controlling risks, we will continue to deepen operations, improve the ecology, and seize Opportunities for high-quality growth. In 23 years, we will do some things in terms of long-term capabilities, which require more firm and continuous investment, such as ecological governance, packaged products and delivery, and gradually improving the efficiency of brokers , to find and fill the gap between the needs of consumers and service providers and our capabilities, fulfill social responsibilities, and be a good company in the hearts of the society and the people,” Peng Yongdong said.

Ewen Eagle

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