Why a Fund Made a $47.5 Million Bet on KE Holdings Even as the Stock Sinks 13%
Key Points
Hong Kong-based Athos Capital added 2.5 million shares of BEKE in the third quarter.
The move contributed to a $47.5 million net position change from the previous period.
BEKE is now Athos Capital Ltd’s largest holding, comprising 29.8% of 13F assets.
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On November 12, Hong Kong-based Athos Capital disclosed a new position in KE Holdings (NYSE:BEKE), revealing it acquired 2.5 million shares in a transaction estimated at $47.5 million.
What Happened
According to a filing with the U.S. Securities and Exchange Commission (SEC) dated November 12, Athos Capital established a new stake in KE Holdings (NYSE:BEKE), purchasing 2.5 million shares. The stake, valued at $47.5 million as of September 30, makes KE Holdings the fund's largest position by reported value.
What Else to Know
This new position accounts for 29.8% of Athos Capital Ltd’s 13F reportable assets under management as of September 30.
Top holdings after the filing:
- NYSE:BEKE: $47.50 million (30.7% of AUM)
- NYSE:KVUE: $40.58 million (26.2% of AUM)
- NYSE:GTLS: $11.58 million (7.5% of AUM)
- NASDAQ:LBRDK: $10.75 million (6.9% of AUM)
- NYSE:TXNM: $8.08 million (5.2% of AUM)
As of Monday, shares of KE Holdings were priced at $16.08, down 13% over the past year and underperforming the S&P 500, which is up 16% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Monday) | $16.08 |
| Market Capitalization | $103.5 billion |
| Revenue (TTM) | $14.5 billion |
| Net Income (TTM) | $549 million |
Company Snapshot
- KE Holdings offers an integrated platform for existing and new home transactions, home renovation and furnishing, rental services, and related real estate solutions.
- The company generates revenue primarily through commissions and service fees from property transactions, brokerage services, and value-added offerings across online and offline channels.
- It serves home buyers, sellers, renters, and real estate agents throughout China, with a focus on both individual consumers and institutional clients.
KE Holdings operates at scale in the Chinese real estate market, leveraging a technology-driven platform that integrates online and offline housing transactions and services. The company's diversified business model spans brokerage, property management, and ancillary services, supporting a broad customer base and multiple revenue streams. Its extensive network and proprietary technology infrastructure provide competitive advantages in efficiency, reach, and customer engagement.
Foolish Take
By the size of the position, this is not a small, optional bet tucked into the margin of a diversified book. It is a statement that the current price of China’s largest housing transaction platform materially understates its earning power through the cycle. KE Holdings remains solidly profitable even in a weak housing environment. In the third quarter, revenue rose 2.1% year over year to $3.2 billion while net income came in at $105 million. Existing home transactions grew modestly (5.8%), rental services surged more than 45%, and management continued scaling higher-margin, service-driven businesses that are less exposed to new home volatility.
The balance sheet also matters. KE ended the quarter with roughly $7.8 billion in cash and short-term investments and has repurchased more than $2.3 billion of stock since 2022. That capital discipline stands out inside a portfolio otherwise anchored by defensive consumer exposure like Kenvue and a smaller allocation to industrial growth through Chart Industries. Ultimately, this looks like a bet that transaction infrastructure outlasts housing cycles, and that scale, data, and cash flow eventually matter more than sentiment tied to a single year of prices.
Glossary
13F: A quarterly SEC filing by institutional investment managers disclosing their equity holdings.
Assets Under Management (AUM): The total market value of investments managed by a fund or institution.
Position: The amount of a particular security or asset held in a portfolio.
Stake: The ownership interest or shareholding an investor has in a company.
Net position change: The difference in the number or value of shares held in a security after a trade.
Commission: A fee paid to a broker or agent for facilitating a transaction, such as buying or selling property.
Brokerage services: Professional services that assist clients in buying, selling, or renting assets, typically real estate or securities.
Value-added offerings: Additional services or products provided to enhance the main service, often generating extra revenue.
Institutional clients: Organizations such as funds, banks, or insurance companies that invest large sums, as opposed to individual investors.
Proprietary technology: Technology owned and developed by a company, not available for public use.
Ancillary services: Supplementary services that support a company's main business activities.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chart Industries, Kenvue, and TXNM Energy, Inc. The Motley Fool recommends Liberty Broadband. The Motley Fool has a disclosure policy.
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