Beike Reports Second Consecutive Year of Declining Interim Profits Amid Executive Compensation Controversy

On the evening of August 26th, Beike released its 2025 interim results, revealing a complex picture of growth and challenges. The company reported revenue of 49.339 billion yuan, representing a 24.13% year-over-year increase. However, this top-line growth was overshadowed by a 7.31% decline in net profit, which stood at 2.162 billion yuan. This marks the second consecutive year of declining interim profits for the property platform giant. In 2024, the company had reported net profit of 2.333 billion yuan, which itself represented a dramatic 42.4% decrease from the previous year. The contrasting trends between revenue growth and profit decline highlight the operational challenges facing Beike in the current market environment. Beike’s operational metrics present a story of continued expansion despite profit pressures. By the end of the first half, the company’s store count had grown by 31.8% year-over-year to reach 60,546 locations. The number of active stores reached 58,664, representing growth of over 32% compared to the same period last year. The platform’s agent network also expanded significantly, with total agent count reaching 558,000, a 21.6% increase from the 458,700 agents recorded as of June 30, 2024. Active agent numbers grew to 491,600, marking a 19.5% increase from the previous year’s 411,500. However, one concerning metric emerged: between April and June, the company’s average monthly active users decreased by 1 million compared to the same period last year, settling at 48.7 million users. This financial performance comes against the backdrop of significant controversy surrounding executive compensation at Beike. In April of this year, the company found itself at the center of a firestorm over what critics labeled “sky-high salaries” for its top executives. Data revealed that between 2021 and 2023, the compensation package for Peng Yongdong (彭永东), Beike’s co-founder, board chairman, executive director, and CEO, skyrocketed by an astonishing 83 times, reaching a massive 713 million yuan. During the same period, compensation for co-founder and executive director Shan Yigang (单一刚) surged 76 times to 529 million yuan. When compared to executives at other major real estate companies, the compensation packages for Beike’s leaders stand out dramatically. For context, Longfor Group Chairman Chen Xuping received total compensation of 34.669 million yuan in 2023—less than 5% of Peng Yongdong’s package for the same year. Even more striking are the comparisons to other industry leaders. According to China Vanke’s 2023 annual report, then-board chairman Yu Liang voluntarily waived his annual bonus, receiving only 1.27 million yuan in pre-tax compensation. Since the report’s disclosure date (March 28, 2024), Yu Liang, along with president Zhu Jiusheng and supervisory board chairman Xie Dong, opted to receive a monthly salary of just 10,000 yuan before taxes. Country Garden also disclosed in December 2023 that, considering industry conditions and actual operational needs, executive directors Yang Huiyan, Mo Bin, Yang Ziying, and non-executive director Chen Chong had all voluntarily requested salary reductions. The annual compensation for these four directors was uniformly adjusted from 370,000 yuan, 3 million yuan, 2 million yuan, and 370,000 yuan respectively to just 120,000 yuan—effectively a monthly salary of 10,000 yuan. Beike has explained that the dramatic increase in executive compensation primarily stems from stock-based incentives rather than cash payments. The company emphasizes that these figures represent the accounting value of equity awards rather than direct cash compensation. According to Beike’s financial disclosures, the total compensation paid to directors surged from 24.269 million yuan in 2021 to 851 million yuan in 2022, before further increasing to 1.266 billion yuan in 2023. Meanwhile, the total compensation for the five highest-paid non-director employees also rose from 306 million yuan in 2021 to 426 million yuan in 2023. What makes the compensation increases particularly noteworthy is their timing relative to company performance. The year when Peng Yongdong and Shan Yigang’s compensation jumped from millions to billions—2022—was actually a difficult year for Beike’s business performance. In 2022, Beike’s revenue declined by 24.87% to 60.669 billion yuan, while net profit showed a loss for the second consecutive year, with a full-year net loss of 1.397 billion yuan. This contrast between declining company performance and soaring executive compensation has fueled criticism and questions about governance practices. As Beike navigates these challenges, several key questions emerge about the company’s future direction. The declining profits despite revenue growth suggest either margin pressure or increased investment in future growth areas. The company’s expansion of stores and agents indicates a commitment to market coverage, but the decline in monthly active users suggests potential challenges in user engagement or competitive pressures. The executive compensation controversy raises important questions about corporate governance and alignment between management incentives and company performance. While stock-based compensation can align executive interests with shareholders, the dramatic scale of the increases during a period of company struggle has clearly generated significant stakeholder concern. Beike’s challenges must be understood within the broader context of China’s real estate market, which has faced significant headwinds in recent years. Government policies aimed at cooling overheated markets, combined with economic uncertainties, have created a challenging environment for all players in the property sector. Despite these challenges, Beike has maintained its position as a leader in property technology, continuing to innovate and expand its service offerings. The company’s development reflects both the opportunities and challenges facing technology companies operating in traditional industries undergoing digital transformation.