Hello, ladies and gentlemen. Thank you for standing by for KE Holdings Inc's First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen only mode. Today's conference call is being recorded. I will now turn the call over to your host, Mr. Matthew Zhao, IR Director of the company. Please go ahead, Matthew. Thank you, operator. Good evening and good morning, everyone. Welcome to KE Holdings, Inc., our Beike's First Quarter 2022 Earnings Conference Call. The company's financial and operating results were published in the press release earlier today and posted on the company's IR website, investors.ke.com. For today's call, we have Mr. Stanley Peng, our Chairman and Chief Executive Officer, and Mr. Tao Xu, our Executive Director and Chief Financial Officer. Mr. Peng will provide an overview of our strategies and business developments, and Mr. Xu will provide additional details on our financial results. Before we continue, I refer you to our safe harbor statement in our earnings press release, which apply to this call as we will make forward-looking statements. Please also note that Beike's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Please refer to our press release, which contains a reconciliation of the audited non-GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in RMB. With that, I will now turn the call over to our Chairman and CEO, Mr. Stanley Peng. Please go ahead, Stanley. Thank you, Matthew. Hello, everyone. Thank you for joining Beike's First Quarter 2022 Earnings Conference Call. Looking back on the first quarter, we were confronted with tremendous challenges, mostly arising from short-term uncertainties. These uncertainties have not shaken our belief in the slightest. We are now more convinced than ever of the positive long-term market outlook, the prospect of achieving our goal and the path to get there. We believe taking care of customers and having service providers take care of customers is at the center of everything we do. We are resolved to choose the difficult yet right path when facing multiple options. The market volatilities have made our beliefs more real, more certain, have inspired us to reflect on ourselves, and more importantly, given us the tenacity to survive during the cold winter. Meanwhile, we must stay optimistic. In the long term, our target addressable market in existing and new homes themselves will continue to grow steadily, and the broader living sector will usher in great opportunity, opportunities. Swimming upstream, only the brave will succeed. In the recent round of massive industry purges, we have united and actively embraced changes. Only the fittest will survive. With impending capabilities, accelerated speed and a strong mindset, our confidence is strong, knowing that we have all it takes to win when the market recovers. This year, as the market finds its bottom and a path to recovery, our one body housing transaction services needs to overcome the mounting difficulties in the short run and focus on resolving problems for customers and service providers, as well as improving efficiency. Our two wings, home renovation and furnishing and home rental services, need to take root and make integration its primary thing and rapid development. This is especially true now that we have completed our Shengdu acquisition. We are pleased that we have already realized strong synergies, delivering initial results after we announced our one body two wings strategy at the end of last year. The powerful growth of our home renovation and furnishing services and home rental services against weak market trends, further strengthening our belief that we are headed in the right direction by executing our strategy. Let's move to the details of our progress with our housing transaction services in the first quarter of 2022. Our housing transaction services is still undergoing a challenging time. During the first quarter, the new home market remained sluggish due to the strain of private developers' debt crisis, the lagging impacts from government's buyout policies and low consumer confidence. Meanwhile, the signs of bottoming out and recovery in the existing home market were interrupted by the Omicron outbreaks across various regions toward the end of the first quarter. Faced with the turbulence of this external environment, we must review the market, take quick action and stay focused on our business and organizational planning. Experience tells us that a sound strategy exists. We concentrate on the most fundamental issue. Improving the efficiency of our agents, making their services more professional and their retention rate higher. Improving customer experience by protecting them against risks and uncertainties. Accelerating receivable collections, leveraging our data strengths to optimize our services to developers and enhancing their understanding of end users. By streamlining our operations and reducing discretionary investments, we aim to boost our efficiency and profitability. The massive market correction has impact everywhere in the industry, but also changed the overly competitive landscape. As the battlefield becomes less crowded, we are left standing with a war chest to return to our original aspirations. We will take the time and the patience to further refine customer experience and service providers capabilities, and build upon our strengths to achieve sustainable development. At the end of the first quarter, the number of Beike's connected stores were over 45,700, down 10% quarter-over-quarter. The number of active stores were around 33,000, declining 5% quarter-over-quarter. As the market continued to find its bottom, we added a few new stores on our platform and strengthened existing stores via mergers. The number of industry practitioners continued to fall rapidly. At the end of the first quarter, the number of agents on our platform was 427,000, and the number of active agents was 381,000. Both decreased by approximately 6% quarter-over-quarter. The number of active stores and agents dropped 30% and 24% respectively from the respective peak level in mid-2021, which is in line with our expectations. The COVID-19 resurgence in the second quarter may result in further decline of the number of stores and agents on our platform. In addition to Lianjia, we will continue to optimize low productivity and loss-making stores, and steadily faster execute our big store model. This will also weigh on the number of Lianjia stores and agents, but at the same time, drive a notable increase in per-agent productivity, serving to reduce the agent churn rates. In the first quarter, total MAUs of Beike's app plus mini program reached approximately 39.7 million, up 6% quarter-over-quarter. We expected online traffic to grow as the market recovers. Regarding existing home transaction sources, according to Beike Research Institute, nationwide GTV of existing home sales dropped 52% year-over-year in the first quarter. The GTV of existing home transaction on Beike's platform was RMB 374.1 billion, down 55% year-over-year, all of which existing home sales declined 46%, outperforming the overall market. The existing home transaction volumes in some key cities were starting to bottom out in the first quarter, but the market rebound was interrupted by COVID-19 resurging in mid-March. Confronted with a series of external uncertainties, we are adhering to the principle of efficiency first in our existing home business. First, we will reduce the size of managing units of our stores and agents. Through more refining and grid-based management, we aim to optimize efficiency and better manage key operation, operating metrics such as collaboration indicators. Second, we will enhance our capabilities in existing home sales with a focus on critical nodes in a transaction, including the home listings, customer leads, and home tours. We will leverage our big data and technical capabilities to find the best listing that we call Beike's Pick and do our utmost in the listing maintenance, home showing, and sales tool of their, of these listings. We will also reconstruct our business leads distribution to improve home buyers coverage and sales conversion. From the technical point of view, the broad VR application during the pandemic boosted our efficiency. After the lockdown in Shanghai since mid-March, due to the COVID-19 resurgence, the weekly online leads generated in VR streams and VR home tools increased by more than 70% and 130%. Behind these achievements were the immersive virtual home tours experience made possible by our VR technology, which transcends the limits of time and expense, and space. It supported real-time interaction between customers and agents with sales consultants on a shared screen throughout the tour, providing a more intuitive and a rich experience compared with photos, texts, or videos. VR is an efficient substitute to a part of offline operations and is an ability all our peers do not have. This year, Lianjia will spearhead productivity and quality enhancement. First, we will be efficiency-oriented and improve agents per head productivity. In addition, we will optimize and discontinue low-performing stores. Senior management must personally walk into each store and engage in store-level operations. For customers, we will emphasize our Anxin service commitments and fulfillments. Our efficiency-oriented strategy choices do not mean that we are diluting our beliefs. Transactions in Shanghai have been suspended for more than two months due to the pandemic. Faced with many choices at this difficult time, we did not waver and insist on guaranteeing the full base pay and welfare for agents in Shanghai, putting all our resources into caring for agents. We will brace ourselves through the low return periods to reduce agent turnover, which will bring high returns in the future. We believe this is the right choice and what we consider an essential investment. Most importantly, we will uphold as always our business philosophy of community-friendly and devote more to community outreach and engagement to do what is within our capabilities for those in need. During the COVID-19 outbreaks since March, our agents have served the community and become a key team among community volunteers. Beginning on April twenty-third, volunteers from Beijing Lianjia alone provided pandemic prevention and control services 26,500 times. More than 3,000 agents in Shanghai Lianjia volunteered to combat COVID-19 on the front lines of 1,854 communities during the lockdown. In cities such as Suzhou, agents from Carefree brands and Lianjia actively participated in voluntary services more than 1,900 times, helping community pandemic prevention testing, necessities delivery and other services. These volunteers work reflects our strong bond with the community. We believe that community services will infinitely fuel our future as more frequent touch points allow our stores and agents to truly integrate into the communities. More importantly, this is how we turn our belief of taking care of customers into more practical actions. Turning to new home transaction services, according to the National Bureau of Statistics of China, in the first quarter, the overall market GTV of new residential home sales was down 26% year-over-year, making the second largest single quarter decline since 1999. Meanwhile, the GTV of CRIC's top 100 real estate developers fell by 47.6% year-over-year. Against this backdrop, the GTV of new home sales on Beike's platform was RMB 1,092.7 billion, decreasing by 44% year-over-year. The new home market continued to decline, with no signs of recovery in the first quarter, a trend differing from that of the existing home market. The ongoing debt crisis that developers face has made home buyers increasingly risk-averse, and slow sales lead to the future deterioration of the developers' liquidity condition. On the other hand, land auction prices fell, and the percentage of state-owned developers increased consistently. In the current period of market correction, we will strike a balance between scale expansion and risk management. First, we motivate agent to focus on low-risk projects and reduce high-risk projects collaborations in the short term, while advancing the commission in advance model to ensure the collection of receivables and accelerate sales growth of high-quality projects, all together boosting a virtuous business cycle. In addition, we refine our cooperation collaboration with state-owned developers and high-quality developers. To explore good incremental sales opportunities. As we boost sales standardization and scientific and refined management capabilities with our partners, we endeavor to jointly build a healthy ecosystem. On top of that, leveraging our advantage, with our unique comprehensive residential housing data, we are extending our reach to the front end of the industry value chain to develop more services and products to help developers efficiently enhance their customer reach, research, project assessment, and sales conversion. Next, moving to our progress and plans for our two wings business. Despite the market headwind, our home renovation and furnishing services achieved remarkable growth in the first quarter. We also completed the acquisition of Shengdu at the end of April. The synergies created between Shengdu and Beike are clearly reflected in the significant improvements in traffic sharing and in supply chain delivery and operational management. Propelled by these improvements on a pro forma basis, assuming Shengdu was fully considered consolidated, home renovation and furnishing revenue in the first quarter would show a 54% increase year-over-year to RMB 860 million. Contracted sales would have increased by 63% year-over-year, driven by an 8% increase in average contract price, in addition to 50% growth in the number of contracts, which reached close to 6,500 in the first quarter in stock contract trust. The total output value of the home decoration and renovation industry declined by 25%-30% year-over-year in the first quarter, according to China Building Decoration Association. This year, our overall strategy remains focused on building a one-stop solution for home furnishing as we continue to leverage traffic directed from housing transaction services, innovate new retail models, and build a better place for home furnishing sales. Our core business transaction services provide strong support for home renovation and furnishing services. In the first quarter, referral customers from our core business contribute roughly 23% of home renovation and furnishing contracted sales. Almost all will add incrementally to our top line. We expect this ratio to reach over 30% in the second half of the year. In Shanghai and in Beijing, such referral accounted for a remarkable 77% and 75% of all its contracted sales respectively. Our progress in major cities has been especially exciting. Contracted sales in Shanghai, Wuhan, Chengdu, and Beijing increased by approximately 550%, 219%, 100%, and 130% year-over-year, respectively. In the first quarter, Shengdu's more comprehensive supply chain and massive SKUs under management also further boosted our product delivery diversity and scale, assisting us in achieving higher customer satisfaction and average contract price. In the future, we were leveraging our Home SaaS system as a supply chain management tool to expand the scale of bulk procurement and further reduce procurement costs, while ensuring supply. With respect to project delivery, we're enhancing the quality and the craftsmanship of our products. At the same time, shorten the construction and delivery cycle by utilizing our online Home SaaS system in conjunction with our offline management. Throughout systematic and scientific project management, Beike's delivery cycle has reached an industry leading level of 98 days in the first quarter. We aim to shorten our overall delivery cycle from 130 days at the beginning of the year to 120 days at the end of the year. Meanwhile, we strive to consistently enhance customer satisfaction through construction voucher services, smart construction site, customer NPS management, and compensation measures. Moreover, our home furnishing revenue is consistently growing. In the short term, we will continue to deliver to drive back end sales of customized furniture, appliances, and other categories with high gross margins through our home renovation services. In the first quarter, thanks to our rich SKUs and improved sales, Taiyin, Shengdu, and Beike's average contract price increased by 7% and 21% year-over-year, respectively. Home furnishing accounting for 10% of total contracted sales in the first quarter and made up 30% of contracted sales in Hangzhou flagship stores. With the full integration of Shengdu, our home furnishing and renovation services have entered a more rapid development phase. We target its monthly contracted sales to exceed RMB 1 billion and the monthly contracted sales in Beijing, Shanghai, and Hangzhou to surpass RMB 100 million each sometime in the second half of the year. During the first quarter, our development approach to Beike home rental services became increasingly clear. Our light rental property management services, Carefree Rent, achieved groundbreaking progress with over 5,000 units acquired in the first quarter. During the first quarter, our units under management have expanded from three cities to eight cities and by 37% quarter-over-quarter increase to reach nearly 70,000. By the end of this year, we aim to have more than 50,000 units under management in our Carefree Rent model. We believe that our Carefree Rent model can transfer the dispersed rental properties in the market into high quality, reliable, professional management and institutionalized long-term rental properties. Meanwhile, with respect to centralized apartments, our first youth apartments project that we participated in using our light custodial operations approach, Beike New Youth Apartment launched in Shanghai Xuhui District in the first quarter. The project has a total of 2,978 apartment units, a monthly rental as low as RMB 2,700. Its occupancy rate has reached 98% to date. In March, we launched our Twilight Service Guarantee Program to protect the rights and interests of both tenants and homeowners. The system provides loss compensation, covers the most concerning issues such as commission, rent, and property, and personal safety, substantially allowing quality and worry-free rental services to be truly accomplished. In the first quarter, Three Light commenced operations in Chengdu and Shanghai, followed by developments in more cities. Finally, I would like to thank all investors for their support. Beike was successfully listed on the main board of Hong Kong Stock Exchange by way of introduction on May 11th. This represented the sound of horn for our journey forward and empower us for our next destination. The substantial uncertainty we face right now reflects the challenges our business has always faced from Lianjia to Beike. All our efforts have been centered on reducing the uncertainty of our business and providing value to the industry with sureness. The front against the uncertainty of information with authentic listings. Against the uncertainty in cooperation through our agent cooperation network. Against the uncertainty in customer choice through the optimization of our products. We reduced uncertainty in service providers' capabilities through training, certification, and examination. We combated the uncertainty in service through our steady, fast commitment to service qualities. Our organization has our spirits. It grows more united when the challenges are greater and, at the same time, more confident about the future. Therefore, the recent market trends, unprecedented though they may be, do not change who we are as an organization and even serve to strengthen our faith to accelerate in our set direction. There is no doubt that we are being tested this year on multiple fronts. Our housing transaction services must brave the many challenges in its operations, while our two wings must build solid underlying capabilities and collaborate. Decisive actions are a must for our whole organization to streamline costs and get leaner while maintaining our vitality. Fear, not a strong path, ironclad on all sides. We uphold our belief that as we overcome these obstacles, we will emerge stronger with new capabilities and lower structural costs. The steps we are taking today will solidify our consolidate foundation, empower our development for the next decade, and sustain value creation for our customers, service providers, and shareholders. With that, I would like to turn the call over to our CFO, Tao Xu, for a close review of our first quarter financials. Thank you. Thank you, Stanley. Thank you, everyone, for joining us. Before we discuss more details about our first quarter of 2022 financial results, I would like to provide a brief update on our recent housing market. During the first quarter, more and more cities have eased curbs on home purchases to support the ailing property market. Of the variety of policies, those of unprecedented frequency and intensity pushed the sector into a deep chill in the second half of 2021. Those measures to boost demand include subsidies, small down payments, reduction in mortgage rates, and relaxation of the rules for home purchases. The easing has brought some signs of recovery. According to Beike Research Institute, the decline of GTV of existing home sales narrowed to 60% quarter-over-quarter in Q1, compared to 21% and 32% in 2021 Q4 and Q3 respectively. The new home construction remains soft as many developers are still facing liquidity challenges. The fourth quarter also saw the resurgence of COVID-19 variants in many cities in China, including mounting infection in Shanghai, which went into a citywide lockdown. With varying mobility restrictions and other local level control measures in place, our operations in those areas have been adversely affected, under which our local stores have been closed temporarily and the transactions have been disrupted. However, as we experienced in the first half of 2020, consumers are increasingly demanding higher standard of living conditions. After outbreak of COVID-19, the demand has become even stronger. Therefore, we believe that the pent-up demands will be released in the subsequent period with the reopening of the economy in the foreseeable future. At end of April, China's top leaders signaled more loosening in a bid to lift economy. The Politburo meeting expressed support of the reform of the local property policies and optimizing the developers' pre-sale funding regulations. We believe those supportive policies will revive housing market sentiment and buyer demand, and home sales should gradually rebound. To summarize, although the market recovery was still fragmented and temporarily disrupted by COVID-19 in Q1, which muted overall transaction volume, we were able to utilize the opportunity to further optimize our execution and lay the groundwork to be better positioned for the market recovery. Turning to our financial details in Q1. Our net revenue decreased by 39.4% to RMB 12.5 billion in Q1, from RMB 20.7 billion in the same period of 2021, in line with the high end of our guidance and exceeding the street consensus. The decrease was primarily attributable to the decline in total GTV of 45.2% to RMB 586 million in Q1, from RMB 1,069.6 billion in the same period of 2021, due to the continuing downtrend of the GTV of the market for the existing home transaction and the new home transactions since the second half of 2021, the emergence of the COVID-19 in certain regions and the corresponding restrictive measures in Q1, and the relatively high base of the same period of last year. In particular, our net revenue from existing home transactions services were RMB 6.2 billion in Q1, compared to RMB 10.2 billion in the same period of 2021. Primarily due to a 44.5% decrease in GTV of existing home transaction to RMB 374.1 billion in Q1, from RMB 673.4 billion in the same period of 2021. Our net revenue from the new home transaction services decreased by 14.5% to RMB 5.9 billion in Q1, from RMB 9.9 billion in the same period of 2021. Primarily due to a 43.9% decrease in GTV of new home transactions of RMB 192.7 billion in Q1, from RMB 343.4 billion in the same period of 2021, which was partially offset by a moderate increase of the commission rate of the new home transactions. Our net revenue from the emerging and other services were RMB 0.5 billion in Q1, compared to RMB 0.6 billion in the same period of 2021. Primarily attributable to the decrease of net revenue from financial services, which was partially offset by the increase of net revenue of home renovation services. Cost of revenues decreased by 35% to RMB 10.3 billion in Q1, from RMB 15.9 billion in the same period of 2021. Gross profit was RMB 2.2 billion in Q1, compared to RMB 4.8 billion in the same period of 2021. Gross margin was 17.7% in Q1, compared to 23.3% in the same period of 2021. The decrease in gross margin was mainly due to, one, a lower contribution margin of its in-store transactions resulted from a relatively high percentage of fixed compensation cost for the Lianjia agents. Two, a relatively higher percentage of costs related to the stores to net revenue as a result of decrease in net revenue in Q1 compared to the same period of 2021. Operating expenses decreased by 17.5% to RMB 3.1 billion in Q1, from RMB 3.8 billion in the same period of 2021. General and administrative expenses were RMB 1,522 million in Q1, compared to RMB 2,108 million in the same period of 2021, mainly due to the decrease in provision for credit losses and personnel costs. Sales and marketing expenses were RMB 861 million in Q1, compared to RMB 1,057 million in the same period of 2021, mainly due to the decrease in brand advertising and promotional marketing activities. Research and development expenses were RMB 749 million in Q1, compared to RMB 638 million in the same period of 2021, mainly due to the increase in personnel costs. Loss from operations was RMB 980 million in Q1, compared to income from operations of RMB 1,030 million in the same period of 2021. Operating margin was - 7.3% in Q1, compared to 4.9% in the same period of 2021. Primarily due to, one, a relatively lower gross profit margin. Two, an increase of the percentage of total operating expenses of net revenue as a result of the decrease of net revenue in Q1 compared to the same period of 2021. Excluding non-GAAP items, our adjusted loss from operations was RMB 450 million in Q1, compared to adjusted income from operations of RMB 1,564 million in the same period of 2021. Adjusted operating margin was negative 3.6% in Q1, compared to 7.6% in the same period of 2021. Adjusted EBITDA was RMB 341 million in Q1, compared to RMB 2,050 million in the same period of 2021. Net loss was RMB 620 million in Q1, compared to net income of RMB 1,059 million in the same period of 2021. Excluding non-GAAP items, adjusted net income was RMB 28 million in Q1, compared to RMB 1,502 million in the same period of 2021. Net loss attributable to KE Holdings Inc.'s ordinary shareholders was RMB 680 million in Q1, compared to net income attributable to KE Holdings Inc.'s ordinary shareholders of RMB 1,059 million in the same period of 2021. Adjusted net loss attributable to KE Holdings Inc. was RMB 29 million in Q1, compared to RMB 1,502 million in the same period of 2021. For the fourth quarter of 2022, diluted net loss per ADS attributable to KE Holdings Inc.'s ordinary shareholders was RMB 0.52, compared to diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders of RMB 0.88 in the same period of 2021. Adjusted diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders was RMB 0.02, compared to RMB 1.25 in the same period of 2021. Next, I will talk about the recent update regarding our capital market and operation initiatives, as well as our near-term focus on corporate financials. Firstly, because successfully dual primary listed on the main board of the Stock Exchange of Hong Kong by way of introduction on May 11th. The dual primary, unlike a second listing, which has been adopted by many other U.S.-listed Chinese firms, requires a higher threshold and stricter procedures. It also allows to maintain our primary listing status on Hong Kong Exchange, even under the most extreme cases if our company delists from the New York Stock Exchange two years later. Meanwhile, unlike a typical IPO, we didn't issue new shares or raise additional capital by way of introduction, enabling us to avoid dilution to our shareholders' interest. The homecoming listing is a solution from us with the full responsibility to tackle the external uncertainties and risks, and to protect the best interest of our shareholders. Secondly, for one of our two wings business, home renovation and furnishing services, we successfully completed the acquisition of Shengdu in April. The combination will further leverage respective advantages from both sides, which will allow us to replicate our model more rapidly at scale to empower the industry. Shengdu will be consolidated into our financial statements since May of this year. With Shengdu gaining traction from Beike's strong resources and support, revenues of our home renovation and furnishing services are expected to grow more rapidly in the future. Thirdly, we recently carried out personnel restructuring in early May, with a focus on middle and back offices. We executed similar initiatives for our financial services business back in Q3 of 2021 in order to be more focused on the development of our core business, incurring approximately RMB 250 million in severance provision for that period. This time, we made it a little difficult twice due to the uncertainties associated with the recovery of the new home market and the re-emergence of the COVID-19 outbreaks into certain cities, and based on our prediction of the mid-term market dynamics. It was a big change that we made in a preemptive manner, and we expect around RMB 430 million severance provision may be incurred in Q2. By doing this one-off adjustment, we believe our personnel structure will be further optimized, and we will be able to better carry on our business during the tough market. Fourthly, we believe our strong cash generation capability and the sufficient liquidity will ensure the company can navigate through the market cycles and incorporate the fallout from the COVID-19 outbreaks and its uncertain impact from the rapidly slowing recovery of the housing market. As of March 31st, 2022, our cash equivalents, restricted cash and short-term investments were RMB 50.2 billion or $7.9 billion. The balance of our long-term cash items, mainly including long-term investments, amounted to RMB 18.9 billion or $3 billion. In addition, we also announced today that we propose to establish a share purchase program under which we may repurchase up to $1 billion of our ADS over a 12-month period, subject to obtaining a general mandate from our shareholders at a general meeting to be convened ASAP. The move underscores our confidence in the fundamentals and the long-term growth of our business. Turning to the guidance for the second quarter of 2022. Considering the housing transaction market is still at the early stage of recovery and the potential negative impact of the COVID-19 continued measures in certain regions, as well as the higher base effect of the same period, 2021, we expect overall market GTV of new home sales to fall over 60% year-over-year in Q2, and the overall market GTV of new home transaction to decrease over 50% year-over-year in Q2, according to Beike Research Institute. Based on all of the above considerations, looking forward to Q2 2022, we expect the total net revenues to be between RMB 10 billion and RMB 10.5 billion, representing a decrease of approximately 56.6% - 58.6% from the same period of 2021. This forecast concedes the potential impact of the recent real estate-related policy measures. The emergence of the COVID-19 in certain regions and the corresponding restrictive measures which remain uncertain and may continue to adversely affect our business. The company's current and preliminary view on the business situation and the market conditions, all of which are subject to change. Today, I'd like to reiterate our consistent beliefs. While we focus on weathering the short-term turbulence, we are devoting more effort to developing and investing in our long-term capabilities. Even if it might take time to achieve financial returns on this investment. In fact, the longer it takes and the more difficult it is, the more excited we become. Although China's housing market has undergone deep adjustment last year and is facing uncertainty from the COVID-19 outbreaks in the first half of this year, we believe that China will eventually win the battle against COVID. In the long run, we also believe with the establishment of a long-term housing market mechanism, the ongoing urbanization trend, the change in family structure to resource mobility among the city clusters, as well as government emphasis on the improvement of the people's living condition. There is a tremendous potential for us to explore, transform and upgrade in the service sector of better living. Starting with the vertical penetration to standardize the industry practice and the protocols, followed by horizontal expansion to integrate the entire industry, have been our proven path to success. It may not be a shortcut, but it is a path that's rooted in our culture of doing the right things over the quick success type of things. We place full faith in it as we ignite our one body, two wings strategy, and believe we will bring long-term benefits to the industry and our customers. All in all, we fully embrace the challenge and the changes and tackling with the determination and the responsibilities. We will always be self-motivated, driven by our long pursuit goal to create indispensable value for the industries. To that end, we will never stop. That concludes our prepared remarks. We would like now to open the call for questions. Operator, please go ahead. Thank you. To ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. For the benefit of all participants on today's call, please limit yourself to one question, and if you have additional questions, you can reenter the queue. If you are going to ask the question in Chinese, please follow with English translation. Our first question is from Steven Tsai with Morgan Stanley. Your line is now open. Thank you. [Foreign language] Thank you, Steven. Let me address your question. Since the beginning of this year, positive policy signals have been released continuously from the top down, especially for the mortgage rates have fallen for the nine consecutive months. In April, nationwide first, second home mortgage rate reached the lowest level since 2019. LPR and first home purchase mortgage rate cut lower to around 4.25%. Mortgage origination cycle length has also dropped from 73 days at its peak to 29 days in April, making the fastest mortgage approval cycle since 2009. These measures continue to be implemented at city level. From our observation, at least more than 30 tier two cities, including Zhengzhou, Suzhou, Changsha, Wuhan, et cetera, have released the easing policies. The policies have been leveling up. The easing steps include relaxing the purchase restriction, reducing the down payment ratio, and issuing the home purchase subsidies. These easing policies have been played a positive role in promoting market transactions, but in fact, it's relatively limited. I'd like to take Zhengzhou as a showcase. The 19 measures to stabilize the market were introduced on March 1st. This means the restrictive policies imposed in past two years all at once. That demonstrates the government's significant determination to boost the market. As a result, existing home sales market transaction volume rebounded notably. Nevertheless, in April, due to the continuous liquidity crisis faced by the developers and the impact of the pandemic, the existing and the new home sales market both began to weaken. Looking more broadly, while the easing policies were implemented as decided, the market remained sluggish for the following reasons. For example, the restrictive policies have not been loosened in the cities with the greatest demand, such as Shenzhen, Beijing, and Shanghai. More importantly, the series of market correction measures in 2021 brought about unprecedented results, with only one thing lost, that is confidence. The continuous debt crisis faced by developers has made home buyers increasingly risk-averse. The severity and the momentum of the economic downturn have also negatively affected the home buyer's expectation with respect to the future income as well as their risk appetite. The evolving pandemic situation and the respective normalized control measures further aggravated home buyers' feeling of uncertainty and made this transaction more difficult. Specifically, existing home sales market began to pick up after Chinese New Year, and the market bottomed out in the first quarter. The further subsequent recovery was interrupted by the pandemic. According to Beike Research Institute, in the first quarter, the GTV of existing home sales market in China fell by 50% year-over-year, and 60% quarter-over-quarter. The price trend shows divergence at city level, rising steadily in first-tier cities and fluctuating in the second-tier city and third-tier cities. Beike's existing home transaction GTV fell by 44.5% year-over-year in Q1. Our existing home sales volume rebounded in February and March, with month-over-month growth rate in March reached 45% and the sales returning to the level of July 2021. The COVID outbreak in many places since middle March interrupted the pace of the housing market recoveries as well. Regarding the new home sales market trend divergent from that of the existing home market. Its growth momentum continued to be lackluster and we anticipate a slow growth which will materialize post the Spring Festival. In first quarter, the GTV of CRIC's top 100 real estate companies fell by 47.6% year-over-year. According to data from National Bureau of Statistics, the GTV of the residential home sales across the country was down 56% year-over-year, making the second largest single quarter decline since 1999. The year-over-year decline in lower-tier cities has been significantly larger than that in the higher-tier cities. Following the same trend, the GTV of the new home sales on Beike platform decreased by 44% year-over-year. Looking ahead, in the short run, there are still many uncertainties in the short term with respect to the new home market due to the following reasons. The first is the persistence of cash crunch of private developers. Second is it will take more time for the easing policy to take effect. Certainly, we saw this, the consumers are more concerned about whether these cash-strapped developers can deliver houses and the quality of these newly built houses. Number four is the evolving pandemic, along with the respective control measures. However, in the long run, we still remain quite confident because the residential demand for the quality living remains very strong. We believe that in the existing homes, the existing high rates are transient, and that as the easing policy take effect and the pandemic subsides, the market is rebounding to recover and the transaction will return to the normal. Regarding your second question, actually, the resurging pandemic in many cities since the first quarter this year will make a significant impact on the company's performance in the first half of this year. At the same time, we will continue to monitor the evolving situation of the pandemic to assess the impact to our full year's performance. Since March, the COVID outbreaks resurged in more than 10 out of 30 top-tier cities and the pandemic containment measures were put forward. Roughly 60% of existing home sales were impacted by the pandemic in Q1, and at least 25% of existing home sales are expected to be affected in Q2. As such, the pace of market recovery is delayed. In Shanghai and the neighboring cities in Yangtze River Delta, the transactions during about half of one month in Q1 were affected, and the transactions during at least 2.5 months are expected to be affected in Q2. In April, 100% of stores in Shanghai were closed. According to our conservative estimate, transactions in Shanghai will come nearly to a standstill throughout Q2. In Beijing, at least 30% of transactions are expected to be impacted by the pandemic in Q2. More than 60% of stores are temporarily closed in May. Within areas where we operate, approximately 140 communities are under the pandemic lockdowns or restrictions. 50% of our new home sales projects are suspended for the on-site tours. However, we'd like to reiterate the housing demand is a rigid demand, which will only be delayed rather than disappeared, as we expect the booming market right after the post-pandemic. Based on our experience in early 2020, as well as more recently, transactions suspended during the lockdown will be completed after the pandemic subsides. Locking in this pent-up demand during the pandemic period will help us grow rapidly when the pandemic is over, which means that with the longer time horizon, the pandemic's impact on our business is relatively small. I'd like to take Shenzhen as a showcase, which went under lockdown beginning on March 13th. In the two weeks that followed, Beike's weekly new home sales in Shenzhen experienced a sequential decline of 65%. However, during the two weeks after the lockdown ended in April, our weekly volume increased subsequently by 400%. It was also 75% higher than the two weeks pre-lockdown, making up for almost all transaction losses incurred during the lockdown season. The degree of demand that will be released post-pandemic will also depends on the extent of the local easing policies in various cities. This is the fact as well as the home buyer's income situation and other factors. Thank you, Steven. Our next question comes from Timothy Zhao with Goldman Sachs. Your line is now open. Thank you, management, and congrats on the very solid results. My question is regarding the new home transaction business. Could management provide any breakdown between SOEs versus private developers in terms of GTV and any difference in terms of commission rate? What is the impact of SOE's concentration rate increase on your business and how is our base model are going to change along with that? Also on account receivables also related to the new home business. Does management see further need to book provisions as we see the decrease in the credit loss provision actually has a positive impact on the G&A cost in the first quarter? Thank you. Thank you, Timothy. Let me address your question. Regarding first question, the state and the central government-owned developers' concentration ratio has been increasing. This is actual. From the land auction perspective in the first quarter, state and the central government-owned developers bought 71% of all auctioned land. In terms of the sales, according to Beike Research Institute, of the top 100 developers GTV in Q1, city-owned developers accounted for 28%, representing an increase of 2% quarter-over-quarter and 5% year-over-year. Of the top 10 developers' sales, city-owned developers accounted for 37%, representing an increase of 7% year-over-year. On the Beike platform, the percentage of the state and the central government-owned developer has increased as well. The state and central-owned developers' GTV as a percentage of Beike new home sales has increased to more than 25% in Q1 from yearly around 20% in the early 2020s, representing 1.3% quarter-over-quarter increase and about 3% year-over-year increase. From the impact on Beike due to the increased concentration of the state and the central-owned developers, we want to emphasize that regardless whether the developer is a state-owned or private, there are only two factors that could impact Beike. The first is the relative commission rate and the second is beta risk. These two factors largely offset one another. The trend of the increasing brokerage service penetration rate will remain unchanged. I want to emphasize on this. In the long run, regardless of whether developer is state-owned or private, they face the same pain points in customer acquisition and have the same strong dependency on the sales channels. As such, a continuous increase in the brokerage service penetration rate is a certainty and will not change. Based on Beike's actual data, brokerage service penetration rate of the state-owned and the private developer are also at the same level of the, on the rise, every year. The key factors determining both brokerage service penetration rate and the commission rate is the degree of the new home project and the end user separation. As the cities continue to expand, new lands will become increasingly distant from the city center, which further increase the separation between the new home projects and the end user. As a result, whether developer is state-owned or private, the lack of the concentration and the connection to the end user will continue to grow. Self-built. The sales channel have become a paradox under the new industrial norm of the so-called Black Iron Age of the real estate. Broking services is still a necessity. Beike, we are the one. When it becomes collaboration with the sales channel, we are the brand of choice. This is the goodwill and recognition from more than 100 million families in China. We can truly help developers to effectively connect end user and increase the sales too, which give us unrivaled competitive advantage under the new industrial norm. For the commission rate. For commission rate, state-owned developers, commission rate is indeed relatively lower, same with their bad debt ratio. Therefore, the impact of a higher concentration of the state-owned developers on our profit margin is neutral. State-owned developers' average commission rate is 28% lower than that of private developers. Owing to state-owned developers' projects being close to the city center, resulting in a low degree of separation between the project and the user. At the same time, the financing cost for state-owned developers is relatively low. Hence, their requirement for selling soon is not as urgent. However, from an operating profit point of view, as the risks of the accounts receivable from the state-owned developers are quite low, the increase of state-owned developers will help to lower our bad debt ratio, partially offsetting the impact of the reduced commission rate on the operating profit. Generally speaking, the impact of the higher percentage of state-owned developers on our profit margin is relatively neutral. Regarding your second question is, for Beike, we as always, we perform the very prudent accounting treatment and also book the appropriate provision for all agent receivables and a timely reflect in the ledger of record. In the past quarters, we almost book all of the sufficient provision for all of the potential, risks from developers who have negative public opinion or who have some financial crisis. One more thing we need to mention is on May 12th, Sunac announced that the interest on four of its U.S. dollar-denominated senior loans was past due. Based on the principle of the prudence in our accounting, we may make a bad debt provision on Sunac's receivable with the highest provision ratio. At the end of Q1, the balance of accounts receivable and other receivable of Sunac was RMB 1.2 billion, of which RMB 790 million was fully covered by collateral. For remaining RMB 450 million without collateral, we increased the bad debt provision from the 20% in Q1 to 85% in Q2. As a consequence of this, the impact of the Sunac bad debt provision adjustment to our P&L in Q2 could be RMB 260 million. Thank you, Timothy. Our next question comes from Liping Zhao with CICC. Your line is now open. 好的。Stanley，涛哥，Matthew晚上好，感谢接受我的提问。我这边想问一下装修业务，那圣都呢，已经在四月份正式并表了，比之前的预期要早一点。想问一下目前圣都的整合的进展，同时呢，也考虑到近期各地疫情反复，想问一下今年最新的这个圣都收入贡献预期大概是怎么样的？我自己快速翻译一下。Thanks management for taking my question. [Foreign language] Since Shengdu started to consolidate in April this year, earlier than previous expectations, could you please share the integration process? Is there any updates on this year's revenue contribution considering the tightened COVID control in certain cities, in the second quarter? Thanks. Yeah, this is Stanley. Let me quickly address your question. It actually has been mentioned a couple of the metrics as well as updates during my prepared remarks, and later I will give you more details. Thank you. [Non-English content] I want to just give you more details in terms of the fundamental thinkings. We truly believe all those kind of operational results is about based on those kind of business philosophy as well as the thinkings behind that. [Non-English content] Yeah, we truly believe between our one body housing transaction business and the two wings and new business, there are a lot of synergies between that, especially the resources sharing. For example, in the housing transaction business, we actually has a very strong potential to continue to provide the Beike potential customer referral into the housing decoration as well as other services. [Non-English content] Secondly, in the past two decades experience from the Lianjia to the Beike era, we actually has been accumulate a series of the methodologies, especially if you look at the nature for the home decoration and the furnishing business, there are a couple of the features such as, overall, procedures, extremely prolonged. The participated rules are very complicated as well as the customer's decision making procedures are very heavy, right? All those kind of features, we truly believe our experience and methodology accumulate from the housing transaction business. We can replicate those kind of experience into the new business. Meanwhile, we also accumulate a bunch of the know-how in terms of the systematic management, data management, as well as the service commitment. We do believe by all those kind of empowerment, we can provide the different kind of services into the housing, decoration business in the future. [Non-English content] Meanwhile, we truly believe our new business also is the era which and the field which is can inspire us. We always ask the question by ourselves, if not us, who will be changed of the industry, right? We do believe, as I mentioned in the second part, all those kind of expertise as well as the inspiration could be help us to continue bring a better role in the housing, the home decoration as well as the home rental new business part. [Non-English content] We strongly recommend you, when you look at all those kind of data similar like what we sharing internally, is we want to make a balance between of the speed of the growth as well as the quality of the growth. We are organization always focused on the long termism, right? For example, for the home decoration business, we want to make a balance amount of the quality, efficiency as well as the scalability. We look at the data such as, for example, like one per month, the overall contract revenue could surpass RMB 1 billion. We do believe by all those kind of effort, in the foreseeable future, we can reach to all those kind of goal. In summary, in the long term, from myself as well as the team, we are not worried about the, you know, the growth for the business. Beyond that, we are more look at on the customer satisfaction. We all look at how we can using the online software tools as well as other, technical ways to continue bring the difference into the industry. [Non-English content] That's my answer. Thank you for your question. Back to you operator. We are now approaching the end of the conference call. I will now turn the call over to your speaker host today, Mr. Matthew Zhao, for closing remarks. Thank you, operator. Thank you once again for joining us today. If you have further questions, please feel free to contact Beike's Investor Relations team through the contact information provided on our website. This concludes today's call and we look forward to speaking with you again next quarter. Thank you and goodbye. This concludes today's conference call. Thank you for participating. You may now disconnect.