China’s leading property broker KE Holdings (BEKE) delivered stellar topline growth in the first quarter of 2021 on the back of robust housing demand following China’s solid recovery from the COVID-19 pandemic. However, the company has seen its share price tumble year-to-date with the sudden death of its billionaire founder Zuo Hui. Also, given that China’s antitrust watchdog recently launched a probe into the company, is it a risky bet now? Read more to find out.Headquartered in Beijing, China, KE Holdings Inc. (BEKE) is an integrated online and offline platform for housing transactions and services in China. It operates through Existing Home Transaction Services, New Home Transaction Services, and Emerging and Other Services segments. BEKE’s focus on delivering unmatched service to its customers and improving the scalability on its platform, along with tailwinds from China’s robust economic growth after its recovery from the pandemic, bode well for the stock.
However, the housing broker was warned last month by the State Administration for Market Regulation (SAMR) for suspected anti-competitive practices. BEKE’s shares have retreated 23.1% over the past three months and 19.5% so far this year.
Also, the recent death of its billionaire founder Zuo Hui, who built the company into China’s largest platform for housing services, has made investors nervous regarding the stock’s prospects. While BEKE’s strong business model and success in enhancing its online content for new home projects have helped it achieve strong topline growth, given the regulatory pressure now on the company, its near-term prospects look uncertain.