Hello ladies and gentlemen, thank you for standing by for KE Holdings Inc.'s second quarter 2025 earnings conference call. Please note that today's call, including the management's prepared remarks and question and answer session, will all be in English. Simultaneous interpretation in Chinese is available on a separate line for the duration of the call. To access the call in Chinese, you will need to dial into the Chinese language line. 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, Ms. Siting Li, IR Director of the company. Please go ahead. Thank you, Operator. Good evening and good morning, everyone. Welcome to KE Holdings Inc.'s or Beike's second quarter 2025 earnings conference call. The Company's financial and operating results were published in the press release earlier today and are posted on the Company's IR website, investors.ke.com. On today's call, we have Mr. Stanley Peng, our Co-Founder, Chairman, and Chief Executive Officer, and Mr. Tao Xu, our Executive Director and Chief Financial Officer. Mr. Xu will provide an overview of our business updates and financial performance. Mr. Peng will share more strategic thinking on our current and future developments. Before I continue, I refer you to our safe harbor statement in our earnings press release, which applies 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 the Company's press release, which contains a reconciliation of the unaudited non-GAAP measures to comparable GAAP measures. Lastly, unless otherwise stated, all figures mentioned during this conference call are in RMB. Certain statistical and other information relating to the industry in which the Company is engaged to be mentioned in this call has been obtained from various publicly available official or unofficial sources. Neither the Company nor any of its representatives has independently verified such data, which may involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. For today's call, management will use English as the main language. Please note that the Chinese translation is for convenience purpose only. In the case of any discrepancy, management statements in their original language will prevail. With that, I will now turn the call over to our CFO, Mr. Tao Xu. Please go ahead, Tao. Thank you. Siting, and thank everyone for joining our 2025 half year result conference call. In Q1, the real estate market continued the recovery momentum we saw at the end of last year. However, as we entered Q2, the momentum softened and the slowdown was likely due to international trade friction and the fading impact of the early policy measures. Because of the high base created by intensive easing policy in the middle of last year, the real estate market recorded a year-over-year decline in Q2. Turning to our business performance, our platform, agent, and store network continued to scale along with refined operations and ecosystem improvement. Our existing home and new home business significantly outperformed the market in the first half of 2025. The proportion of the number of housing transactions from Yi Xing home sales reached a record high. At the same time, our home renovation and furniture business and home rental service business both achieved high-quality growth. Revenue from non-housing transaction services accounted for 41% of total revenue in Q2, highlighting our diversified growth drivers. Regarding our overall financial performance in Q2, our total GTV was RMB 878.7 billion, representing a year-over-year increase of 4.7%. The revenue reached RMB 26 billion, up 11.3% year-over-year. Gross margin declined by 6 percentage points year-over-year to 21.9%. GAAP net income was RMB 1.31 billion, falling 31.2% year-over-year. Non-GAAP net revenue reached RMB 1.32 billion, down 32.4% year-over-year. Next, I'd like to elaborate on the operational update and the financial performance of our business segments. Looking at our housing transaction services, the momentum from our proactive growth efforts has been clearly evident. In the first half of the year, the number of Yi Xing home sales on our platform rose by 26%, outpacing the market growth rate of 19% admitted by Beike Research Institute, both year-over-year. New home orders on our platform increased by 19%, outperforming the market, which according to Beike Research Institute declined by 6%, both year-over-year. The share of our Yi Xing home sales continued to rise, with the proportion of total home transaction orders on our platform increasing from 51% in the first half of 2021 to 76% in the same period this year. Our competitive edge in the Yi Xing home market led to more stable and solid overall business performance. Our digital and store network further expanded. In the first half of the year, v arious high quality industry brands joined our platform including Guangzhou Hope Real Properties, Tianjin Baoyuan Properties, Wuxi Dongcheng Real Estate Services, and Shenyang Yumei Property. The number of active stores on our platform increased by 30% in the first half of the year, of which active Nanlian Jia store soared by 36.8% year-over-year. The number of active agents on our platform lifted by 19.5% in the first half of the year, including a nearly 24% increase in the number of non-Lianjia agents year-over-year. For our existing home transaction services, we continue to deepen and refine our operations, leveraging our scientific management system for home-based operations and AI-driven technology application to boost the store and agent productivity throughout home listing, customer acquisition, and conversion process. On the home listing side, we have tools like Home Maintenance Score and Exceptional Home Product to help agents better market home listings while focused on top listing to increase transaction conversion. On the conversion side, we also implemented measures to strengthen store-level operation and network operation to enhance matching and transaction efficiency. These measures included mechanisms like incorporating competition into our store scientific management system, deepening the operation of core governance consoles, store point-based incentive program, and designating [cardigan] efficiency business districts. In terms of financial performance, revenue from the existing home transactions reached around RMB 6.7 billion in Q2, down 8.4% year-over-year and remaining relatively flat quarter-over-quarter. GTV was RMB 583.5 billion, remaining relatively stable year-over-year and quarter-over-quarter. The GTV growth outpaced revenue on a year-over-year basis mainly due to a higher GTV contribution from its in-home transaction services facilitated by connected agent, for which revenue is recorded on a net basis. The contribution margin for the existing home transaction services was 39.9% in Q2, a decline of 7.5 percentage points year-over-year, primarily due to a higher fixed labor cost resulting from an increase in the number of Lianjia agents and the lasting impact of the agent welfare improvement strategy we implemented since last year. Sequentially, the contribution margin grew by 1.8 percentage points due to stronger leverage as our series of cost reduction and efficiency enhancement initiatives conducted this year led to a quarter-on-quarter decrease in fixed labor costs while revenue remained generally flat. For our new home construction services, the scale of our collaborative project remains steady. Through our AI-driven agent [Xiangji], we refined the management of new home projects, revitalizing more existing projects. On the customer front, we reinforced its incentives between existing new home and rental services and fine-tuned operations while launching our AI assistant [Huanshu] to help service providers emulate customer demand and input matching efficiency. In terms of the financial performance, our new home GTV reached RMB 255.4 billion in Q2, at 8.5% year-over-year and 10% quarter-over-quarter. Gross new home transaction was RMB 8.6 billion in Q2, rising by 8.6% year-over-year and 6.7% quarter-over-quarter. Revenue growth was in line with GTV growth year-over-year, demonstrating our steady monetization capabilities in new home transactions. While GTV growth outpaced revenue growth sequentially due to the seasonal fluctuation of the peak rate, the contribution margin from the new home transaction services fell by 0.6 percentage points year-over-year to 24.4% due to an increased variable cost resulting from our agent welfare improvements last year. Sequentially, the new home contribution margin rose by 1 percentage point, largely attributed to the cost decline in variable cost thanks to our refined operations and the focused sales strategy to maximize unit sales for property project this year. For our home renovation furniture business, we focus on enhancing the operations to build up our underlying capability to support our sustainable growth. On product capabilities, we analyze the customer data and insight to understand our core needs. Leveraging master designs and R&D, we introduce the home renovation modules that can be flexibly configured and quickly iterated. By combining these modules with design adjustments, we provide customers with a one-stop home renovation solution. On the supply chain side, our digital infrastructure enables us to significantly streamline partner brand selection and SKU con based on customer need. The proportion of centralized procurement is up while the overall unit purchase price declined significantly. To further improve our delivery quality, we identified over 2,600 high quality project managers on our platform, improving their efficiency and income while elevating the end user experience. Operationally, we implement quality and efficiency Business District Strategy. We scored business districts based on multiple indicators such as building age and housing transaction volume. This allowed designers, project managers, and other service providers to focus on high score districts, enabling them to gain deeper insight to the customer and the property conditions. By introducing the upfront site measurements and other processes, we reshaped workflow to improve operational efficiency. We also accumulated and refined design solutions on the construction guidelines, ultimately enhancing the customer experience. In terms of the financial performance, revenue from our home renovation and the furniture business reached RMB 4.6 billion, increasing by 13% year-over-year. This was mainly driven by the increase in home renovation orders alongside a high average revenue per order stemming from an increase in the average price of furniture and home furniture retail. Contribution margin for the home renovation and furniture business reached 32.1%, up 0.8 percentage points year-over-year, primarily driven by a larger proportion of centralized procurement and enhanced order dispatch efficiency. The contribution margin fell by 0.4 percentage points, mainly attributable to a structural shift with an increased revenue contribution of furniture and home furniture retail, which has relatively low contribution margin. In our home rental service business, we continue to iterate our products and apply AI to reconstruct our business process and operational funnel. On the product front, we expanded our differentiated product portfolio, launching product 09 in the first half of the year to meet homeowners' various needs around the vacancy period and rental income while balancing risk and returns for our business. For unit SaaS and occupancy, we implemented quality driven lease allocation rules so that a better listing and a better service provider gets more leads. Customers will also benefit. We also leverage AI capability for the intelligent collection and identification of the rental housing conditions as well as intelligent pricing to explore unit startup module led by the platform AI. In terms of the operational management, we leverage AI massive computing power to optimize resource dispatching, inventory, unit setups, and occupancy, which enhanced both personal productivity and rental occupancy rates in a pilot region. Overall, personal productivity improved remarkably in the first half of the year. The average number of the rental unit manager per property manager rose significantly, with the number of unit startups growing by over 50% in June compared with the same period of last year. Regarding the financial performance, revenue from our home rental services business reached a record high of RMB 5.7 billion in Q2, up 78% year-over-year, mainly benefiting from the rapid growth in the number of the rental units under management. By the end of Q2, we have over 590,000 rental units under our management compared with over 310,000 in the same period of 2023. The contribution margin for home rental service was 8.4%, a 2.5 percentage point increase year-over-year and 1.6 increase quarter-over-quarter, largely due to the improved gross profit of our carefree run business. As we continue to refine the carefree run business model based on the essential for service contract, the revenues from some newly managed rental units were recorded as net revenues derived from the service fee. For Beihaojia business, our strategic direction is very clear and firm. We will never be a developer. Our commitment to an asset-light business model is absolute. Other than Chengdu Beitung and the Shanghai Fengxing Xincheng project, we will not independently operate any other project. Our role is to deliver Sichuan product solution and a marketing service for developers and other partners in industry, and we categorically do not provide any form of fund solutions. In Q2, our revenue from emerging and other service decreased by 50.6% year-over-year and grew by 23.5% quarter-over-quarter to RMB 432 million. Now moving to other costs and expenses, profitability, cash flow, and other financial metrics in Q2. Our store cost returned to RMB 762 million, increasing by 11.9% year-over-year and remaining relatively stable quarter-over-quarter. The year-over-year growth was mainly from higher store repair and maintenance cost. Other costs were RMB 588 million, up 15.2% year-over-year and 7.5% sequentially, primarily due to a higher basic maintenance cost of our home rental service business. Gross profit dropped by 12.5% year-over-year to RMB 5.7 billion. Gross margin was 21.9%, down 6 percentage points year-over-year, primarily due to the decrease in contribution margin from the [SING] home transitioning services. Gross margin increased by 1.2 percentage points sequentially in Q2, mainly due to the greater revenue contribution from the home renovation and furniture business, which has a relatively high contribution margin. In Q2, archive operating expenses totaled RMB 4.6 billion, up 3.1% year-over-year and 9.7% sequentially. [Not only G&A] expenses for RMB 2.1 billion remaining flat year-over-year and increasing by 11% quarter-over-quarter, primarily attributable to an increase in bad debt provision. Sales and marketing expenses amounted to RMB 1.9 billion, remaining relatively stable year-over-year and growing quarter-over-quarter, primarily resulting from the increased sales and marketing expenses for home renovation and furniture business. Our R&D expenses were RMB 633 million, up 25.6% year-over-year and 8.5% sequentially, largely driven by a higher personnel cost and detecting service fee. In terms of the profitability, net income from operations totaled RMB 1.06 billion in Q2, down 47.4% from the same period last year and up 79.4% sequentially. GAAP operating margin was 4.1%, dropping by 4.5 percentage points from Q2 2024 and rising by 1.5 percentage points quarter-over-quarter. Non-GAAP income from operations totaled RMB 1.61 billion, falling by 42.9% from the same period of last year and increasing by 40% sequentially. Non-GAAP operating margin reached 6.2%, down 5.9 percentage points from Q2 2024 mainly due to a year-over-year gross margin decline. Non-GAAP operating margin rose by 1.3 percentage points from the previous quarter, meaning it built to a sequential gross margin improvement. Net income totaled RMB 1.31 billion in Q2, down 31.2% year-over-year and up 52.8% quarter-over-quarter. Non-GAAP net income was RMB 1.82 billion, falling 32.4% year-over-year and increasing 30.7% quarter-over-quarter. Moving to our cash flow and balance sheet, we generated a net operating cash inflow of RMB 826 million. In Q2, [New home DSO] reached 51 days in Q2, remaining at a healthy level. On top of spending approximately [$254 million] for share repurchase and distributing $400 million for 2024 final cash dividend during Q2, our total cash liquidity excluding customer deposits payable remained at a high level of around RMB 70 billion. With our robust cash reserves, we will continue to augment shareholder return through active share buyback to further enhance capital allocation and capital operation efficiency. At the end of Q2, we repurchased around $394 million worth of shares this year, which accounted for around 1.7% of the company's total shares outstanding at the end of 2023. We have consistently delivered on our promise to reward shareholders since the launch of the share repurchase program in September 2022. We have repurchased around $2 billion in shares as of the end of June 2025, accounting for about 10.3% of our total shares outstanding before the program began. Today, we are pleased to announce that our board has approved an expansion of its new share repurchase program. The authorization has been increased to $5 billion and the program has been extended to August 31st, 2028. Going forward, we will continue to reward our shareholders who have grown with us and share the value we create. Despite fluctuations in macro environments, we have delivered a top-line performance that significantly outperformed the market, underpinned by our solid business fundamentals and a diversified portfolio while actively driving operational improvement to maximize the company's long-term value. AI-driven refined operations and ecosystem optimization are continuously unleashing the platform's long-term potential. Our healthy cash flow and proactive shareholder return policy demonstrate our firm commitment to long-term value creation. Looking ahead, we will join force with all partners and shareholders to seize opportunities and create great value together. Thank you. Next, I would like to turn the call over to our Chairman and CEO, Mr. Stanley Peng. Go ahead, sir. Thank you, Tao, for the overview of our updates for the first half of the year. Now I'd like to share the reasoning behind our initiatives and address some key interests and concerns. First, I'd like to talk about scale and efficiency. For our housing transaction services business, we have expanded our agent and store network very rapidly over the past few years. In the first half of the year, a large number of new brands, stores, and agents joined our network. However, we saw some softness in our efficiency indicators in housing transaction services in the second quarter. Our ACN and [authentic] listings were originally built to solve the key consumer pain points of that time. As China's real estate market evolved, consumer needs changed dramatically, and our response didn't fully meet those emerging needs. This created an urgent need for us to shift our growth engine from scale to efficiency. The main challenge we faced was how we would raise productivity per store and per agent and increase platform efficiency while maintaining the scale of our agent and store network. Resolving this will define the next stage of our development. To begin with, I want to stress that scale and efficiency are not a zero-sum trade-off. Gaining efficiency doesn't mean sacrificing scale. Reaching the current scale of our agent and store network was no small feat. You'd be hard pressed to find a comparable example anywhere in the world of a company that has reached such a large presence in a single city through its own operations. How did we accomplish it? In the past, the scarcest resources in the market were high-quality assets and transaction security guarantees. That is why we built our ACN and introduced authentic listings and service commitments, integrating online platform innovation, offline business execution, and disciplined scientific management to support them. By providing what was scarce, we achieved a breakthrough in scale and built a deep competitive moat. How do we move from scale to efficiency? First, by looking at our history. We need to find out the existing strengths that we can leverage while acquiring new capabilities for today's context. Second, by responding to consumers' evolving needs in China's changing real estate market, the new scarce resources are accurate market insights to help buyers make the right decisions, operational capabilities to help sellers market properties effectively, and the emotional value that comes from empathizing with customers. Buyers want professional advice, homeowners need a skilled mind, marketing support, and in the age of AI, consumers crave emotional connection. Our task is to create clear pathways to deliver these values as we seek a new growth parity. We start by challenging a paradox. Large organizations often sacrifice efficiency to pursue scale. We already have the drivers for efficiency improvements. First, the transformation of customer demands acts as a natural form of selection. Second, AI-led innovation is delivering real productivity gains as a new means of production. AI is becoming increasingly powerful, capable of replacing traditional means of production. These two forces enable us to rate efficiency while maintaining the scale of our agent and store network. Our endgame is clear, but how we get there is still being defined. Going forward, we will commit our energy and resources to those areas to reshape our growth path. Now I'd like to delve into the logic behind some of the business initiatives we are working on. I will start with the home renovation business. As Tao mentioned, our strategy centers on community-centric operations and our full-services premium store model. Our rationale reflects a major emerging trend. It's a shift from a traffic-driven mindset to a local community-centric approach. We have begun piloting this model through our first full-services home renovation premium store in Beijing. In the premium store, we put in showrooms with our more modular renovation products so potential customers can see real, replicable home renovations based on typical local floor plans in a community. Our organizational structure has adapted accordingly. Designers, project managers, and workers are now dedicated to specific communities, gaining knowledge and experience of both properties and customers there. The key here is to deepen our engagement, locking in high-value areas and strengthening our presence to become customers' first choice in the region, ultimately occupying their mind share. Our goal is to bridge the distance between our services and the users. We want to bring them closer physically, psychologically, and in decision making so we can evolve from a city-level renovation service provider to a community-level partner whose interests are deeply aligned with the customers. Specifically, by opening our community-centric premium home renovation store adjacent to our existing home transaction contract signing centers, we have reduced the physical distance to our customers. This tells our customers we are the neighbor right down the street, not a large distant company they have to drive an hour to reach. This builds cost and convenience at the same time. Our community-based premium store and community-specific service providers are well versed in the floor plans and customer needs so they can offer tailored home renovation design plans even before customers purchase homes. This shortens the decision making distance for customers. Why is it? Because the biggest pain points in traditional home renovation is uncertainty. Customers often don't know the final costs, what their homes will look like, or whether a service will be reliable. We solve this with two innovative community showroom designer designs and pre-signing measurements and drawing. Community showrooms design say to potential customers your neighbor's home renovated with the same floor plan as yours has already been renovated with visible results, clear process, and proven satisfaction. No guesswork is needed. Our pre-signing measurement and drawing flips the traditional payments-first service network model. We demonstrate value upfront by providing professional measure, measuring, and design renderings before customers commit. This gives people great security and confidence right from the start. Our strategy also reduces the psychological distance for users with a physical store, proven cases, and a professional consulting team in the community. Our brand is no longer cold, impersonal, and white advertisement. It becomes a real tangible presence customers can interact with anytime. The assets we gain from this kind of deepening operational are more powerful than marketing, turning one-time transactional customers into long-term interactive community users. These are just some of the ways we think about our initiatives in the home renovation business. Next, I'd like to talk about how we view the home rental business. Tao has already covered much of our progress in this segment, including product interaction and a broader use of AI to boost property management efficiency and streamline other operations. Why do we pursue maximum efficiency in this business? Because under the traditional management model, our carefree rental business inevitably faces this economics of scale. Once the numbers or units reach a certain level, complexity may rise sharply due to the non-standard nature of our products, the service provider abilities and skill, and sales negotiations. At the same time, the rental business operates on the service fee, profit fee, profit margin, which cannot absorb losses from non-standard operations and low efficiency. These three major changes form an iron triangle that compels us to break through the traditional model and pursue maximum operational efficiency. How do we achieve maximum efficiency? In phase one, we restructured our organization, moving away from the all-in-one manager model to six specialized roles fully aligned with the logic of our ACN. This division improved professional skills, reduced service variance, and embedded these capabilities into our platform. In phase two, we optimized our product model, shifting from the high-risk non-standard vacancy, prune lease-out model to a steady rent pass-through model with unified service fees. This stabilized revenue per property, aligned team goals, and removed the obstacles for scaling growth. We also digitalized processes through our SaaS system, accumulating structured data to fuel AI applications. In phase three, we begin to build intelligence into operations, deploying our AI human model where AI handles standardization, pricing, auditing, and 24/7 virtual services. We hope that AI could cover 80% of standardized work while people can focus on trust, irregular cases, and high-quality services. The logic tying all of this together is about transforming a non-standardized offline industry full of uncertainty into a data and intelligence-driven business with more certainties. At its core, our system reduced reliance on individual experience, smoothing out fluctuations in service quality and customer experience. Efficient operations and consistent service quality create a growth flywheel, reinforcing the synergies across the home rental business, home renovation, and housing transactions. Our vision is to build an AI-driven rental platform by combining AI and IoT hardware and operating processes. We hope this platform will give the rental industry a proven and scalable profit model. Meanwhile, the pursuit of operational excellence will inevitably compel our whole organization to develop more efficient operational mechanisms. We also hope it can be an example for the traditional service industry, showing how structure, model design, and technology can solve issues like non-standardized, natural, and economics of scale. Now moving to our Beihaojia business, why are we pursuing this business? We will not be developers. To be clear, we will not be adopting an asset-light model. The traditional real estate developer business used to depend on land and money. In today's market there is a new variable, a customer-oriented mindset. Because we are so close to our customers, we can collect more customer insights and data to add value to this third variable. In the early stage of this business, we ran two self-operated projects to test our understanding and to see what value we could create for this third factor. General customer needs at the very core of our product design and construction, we leverage our robust data and AI power capabilities including pricing, prediction, unit mix optimization, and potential customer insights to deeply understand our target customer needs. Our project positioning, product design, and construction adhere to this authentic customer needs, including many small details traditional developers might overlook but that we consider critical to the long-term living experience. In our Chengdu Bei Cheng project, we have dedicated meticulous design and construction efforts to over 108 quality-driven details that many seem minor yet meaningful. This spans from urban integration of architecture, design, landscape planning, homecoming journey experiences, interior spatial planning to AI IoT enabled sensory system covering sight, sun, smell test, touch consciousness, as well as lifestyle scenarios and property services. This productization capability is something that's becoming crucial as the market shifts to buyers. This means the supply side must offer differentiated, not homogeneous, products and this is how we add value to the industry through the third variable of production beyond land and money. Finally, we now stand at crucial turning points. Balancing scale and efficiency, adapting to evolving customer demands, and keeping pace with rapid technology development are all issues we must address. We have already started exploring and testing new approaches across our business while maintaining the scale advantage of our platform. We aim to revamp our service interface through community-centric operations, unlock organizational efficiencies with AI, rebuild our product logic with a customer-centric mindset, and continuously shape new paradigms in the residential service industry. This concludes my prepared remarks for today. Operator, we are now ready to take questions. Thank you. If you wish to ask a question, please press Star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star 2. If you are on a speakerphone, please pick up the handset to ask your question. As a reminder, we only accept questions on the English language line for the benefit of all participants. On today's call, please limit yourself to one question, and if you have additional questions, you can re-enter the queue. If you're going to ask the question in Chinese, please follow with an English translation. Your first question comes from Timothy Zhao from Goldman Sachs. Please go ahead. Great. Thank you, [Operator], for taking my question and congrats on the solid result and very excited to hear about your new approach in growing the business in future. I think my question is on the secondary home. I just wondering if management can provide us any overview on the second quarter secondary home market and how should we expect the trajectory into the second half of this year? What kind of policy tools that we can expect for the rest of this year? [Foreign language] Thank you, Timothy. Let me first take a brief look on the market. In the first half, the total value of the housing transaction nationwide was stable. Overall, the market was off to a good start in Q1, sustaining the recurring momentum from the Q4 of last year. Both number and the price of transaction weakened significantly in this Q2. Divergence also intensified. Based on NBS data, new home sales nationwide dropped by 5.2% year-over-year in the first half. CRIC research indicates the top 100 developers saw steeper declines, posting 10.9% in the first half. Sales flattened that intensified to 14.5% year-over-year in this Q2. The existing home market holds up relatively well. According to Beike Research Institute, in the first half, the total value of online registered transaction for existing homes rose 8.3% year-over-year. This was driven by a 19% increase in the number of transactions even though average price driven by 9% both year-over-year set aside momentum loads. In this Q2, the transaction volume growth rate dipped to just 2% and the number of transactions also slipped to a 12% gain. In June, the number of transactions decreased by 8% year-over-year and the home prices dropped further month over month by 1.7%. Rent has been more stable than home prices. Nationwide, rental yield has been steadily rebounding since year of 2021. In June this year it reached a high of 2.5%, about 40% higher than its lowest point, creating value support for the home prices. Structurally, existing home continue to perform better than new homes. Existing home transaction tended to have a large average GFA, lower total price and a higher share of the nearly new existing homes. Population movements from lower to higher tier cities remain steady and we continue to see wide differences across cities in terms of the housing price, inventory sell through and the land auction premiums. Our key indicators like homeowner price adjustment, prospective index, and agent confidence index show the weak market sentiment, the feeding efforts of the new policies, China-U.S. trade tensions, shortened policy vacuums, and the system market correction set to market momentum reinforced expectations for price declines constrained market recovery. All of this adds to a strong downward pressure for the market. Since the beginning of July, the market downturn has picked up speed. The number of its in-home transactions fell by over 5% month over month while the prices dropped by 1.5%. New home subscriptions fell by 25% month over month, signaling a period of sharp correction. Looking ahead, the market path will still depend on the pace of the future policies, and the supply-demand balance improvements also are key to restore the confidence which influence buying behavior and the price trends. On June 30, the State Council executive meeting once again emphasized the need to double down on stabilizing the market, signaling the potential for stronger policy support. On top of current policies that remain in place, there is still room for new, stronger policies aimed at boosting demand and improved supply. On the demand side, leasing cities have further relaxed purchase restrictions. Urban renewal, relocation vouchers, and purchase subsidy can also unlock potential home buying demand. On the supply side, high-quality housing from the fourth-generation houses and the nearly new existing home supply enable the easing of sales restrictions, which could elevate supply-side quality and potentially market sentiment and transaction volume. Proactive policy can help counteract the market downward trend and support a shift towards recovery. Thank you. Thank you. Your next question comes from John Lam from UBS. Please go ahead. Thank you. [Foreign language] Let me translate my question in English. Could management share about under the backdrop of the sector downturn regarding the property sector, is there anything that the management team has done to deliver the offer to the investors? For example, would be like the market share, agents' productivity, or store productivity. Also, how does the management think about the growth strategy for both the agents and number store? Thank you. John, t hank you for your question. We hope to outperform the market for a long time to come and have taken steps to achieve that. I will answer your question from two angles, scale and efficiency. First, the continuous expansion of our platform agent store network over the past few years has fueled fast business growth. Going forward, we will slow the pace of our store and agent growth and focus more on efficiency for sustainable development. This strategy will vary by city. In places where store network coverage is already high, we will impose higher quality and ROI requirements to onboard new stores. In a few cities where store network coverage is still relatively low, we'll continue to make a strategic investment. By the end of the year, we expect to keep our store and agent number stable outside of Beijing and Shanghai. In those two cities where agent growth has been strong over the past few years, we are consolidating lower performing stores and phasing out lower performing agents. I believe it's time to shift our goals' focus from scale to efficiency, starting with deeper operation efforts in the short term. In the long term, we have the technology to drive the industry-wide gains in total factor productivity. In detail, we will implement in-depth systematic scientific management operations, particularly by enhancing operations that add competitive dimensions. This involves manager processes that influence competitive outcomes, such as focusing on properties, customers, and improving collaboration and matching to enhance the competitiveness of individual stores on our platform. We will also continue to strengthen our key operation initiatives, such as our points-based store incentive system, regional core governance councils, management of high quality business districts, and separation of Cagen row for homeowners and buyers, which we pilot in Shanghai. These projects are helping us improve our ecosystem and guide service provider behavior. For example, stores in high quality business districts had 1.44 x the average productivity of other stores compared with less than 1.4 x in the second half of 2024. Over the long term, technology will be key to enhancing our efficiency and consistently delivering alpha. We see the demand in large AI module technology combined with our unique scenarios and the data in the residential service sector have strong potential in reshaping user experience and boosting efficiency. [To bring transformation] for in the real estate industry, we have established the AI project metrics that develop different AI applications simultaneously for different roles of SAN and BI on both staging and operational levels. Some of these applications have demonstrated good results. One example is our AIGC marketing and AI-driven CRM products that address customer acquisition and the conversion of agents. We have built an intelligent AI DC marketing agent for real estate agents to support customer acquisition through self-media, private booming traffic operations, and lead conversion. It offers a full suite of tools to help agents create multimodal content for multi-channel customer acquisition, perform better data analysis and lead identification, analyze leads and create [aspirational] scripts, and generate price trends automatically. Our intelligent AI-powered CRM agent strengthens customer acquisition and conversion for all customer-facing roles. Here I refer to the brokerage agent as brokers to avoid any confusion, for it's new home brokers. Our ARCIM improves customer management through a constantly evolving multi-agent system. Powered by our user data, it gave the brokers personal guidance ranging from market insight and the customer strategy to recommended actions. This input helps brokers understand users' needs, gauge their intentions, and spot new opportunities. It also automates personalized follow-up tasks to drive transactions. At the end of June 2025, NICO, one of our AI-driven CRM product applications, was in use across 59 cities with over 335,000 brokers. The product penetration rate exceeded 75% across Beijing and Shanghai. In Xi'an, for example, brokers who use [Like Extensive View] achieve a 30% higher conversion rate for final customer mandates and about 20% higher conversion rate for showing compared with brokers that use the product less frequently. For new homes, we have AI-driven CRM agents Qianji and Qianzhou that help new home sales managers improve listing management efficiency and strengthen both matching and marketing for new home products. On our consumer side, for example, our Pushing AI online service assistant now provides real estate market analysis, citywide home search, regional analysis, home-based new comparisons, preliminary matching for home listing, and patents. We began gray box testing in May, making Pushing available to select users in 11 cities. In July, the MAU reached 780,000, up 10% from June. Commercial volume grew by 59% and average time spent per user was up 14%. [Pugin] now supports marketing language marketing model services while also transforming [Pugin] to allow it to proactively explore customer needs and handle tasks while providing more precise, high-quality instructive answers. This enhancement will help users make decisions at the more transaction forward. [Pugin] is our first 2C trial in offering AI-powered services and we are making extensive efforts to offer more important patent services to the industry. We believe AI is the most crucial driver for our next generation productivity improvements. We will keep you updated on our internal progress. Thank you. Thank you. Your next question comes from Griffin Chan from Citi, please. [Foreign language] My question is about how will the property new development model such as companies' property sales or promote of the quality house create new opportunity for vehicle for example in demand forecast or even for the product design. Thank you. Thank you, Griffin. This year, supply side policy in real estate have accelerated in push better living quality, especially through high quality homes and moving ready homes. Such measures are being implemented at a fast pace. Residential products that meet new national standards have performed well under pilot sales of the moving ready new homes in Xinyang have set a good example. Surveys show that among the factors holding back buyers, price expectation accounted for nearly 50% while home suitability accounts for around 20%. At new home products better meet home upgrades, suitability demands and the system for selling moving ready new home gradually expands, we expect to see reduced quantity and input quality supply. This new model set much higher requirements on developers from securing funding and ensure project returns to understanding upgrade needs, product positioning and pricing and sales through marketing. This will further highlight the value of Beike bring to developers in terms of the impact of the current voltage model. In the short in four steel cities, new home products that met the new standards will have a lower voltage sales proportion and commission rate than the products under the old standard. Nevertheless, in most cities, new standard products currently only accounted for around 10% of units and their presence will push old standard products to reserve brokerage service penetration ratio. As a consequence of this, the overall impact on the channel sales market is gradually small. When new standard products make up over 30% of the project launch in the city, for example, as they do in Xi'an, the brokerage penetration and commission rate will match those of old standard products. The fast sell through of the new regulation products can boost agents' confidence in new home products, forming a virtuous cycle. Opportunities for cooperation model upgrades the industry. New model will also drive upgrades in how we work with developer beyond the broken channel sales model, our goal is to offer the tailored service for managers of full project lifecycle based on each developer's needs and project type. This will further highlight the value of Beihaojia business from its C2M product solution to its integrated online-offline marketing services. Pricing forecast capability, we leverage systematic modeling approach including a sublimate factory-eliminated pricing model with the rolling review and the calibration mechanism and the comparable price trend analysis based on authentic in-home market data. Our algorithm sets out structured factors so that the prices are comparable both across market and over time. This pricing capability helps developers objectively assess price trend and set accurate prices, avoiding profit loss from the mispricing. When competition in selling move-in ready new homes intensified, it can also improve the product value-for-money positioning. For example, in Nanjing and Wuhan, new standard products are noticeably more competitive, excepting independent price trends. Beike's price forecasting capability enables granular segmentation analysis to better characterize some market dynamics. Today, our pricing model already has a fairly high level of accuracy. Regarding the unit mix forecasting capability, we apply machine learning algorithm to model and forecast customers' housing unit needs, drawing on both potential customer behavior and historical transaction data. In June 2025, the compliance rate of our sample simulations continued to rise. Our goal for the year of 2026 is to have a full price and market coverage to help developers plan unit mixes more accurately, avoid inventory buildup, and speed up sales of move-in ready new homes. Regarding the customer insight, we can clearly define and pinpoint potential customers for building projects in specific districts along with their needs and profiles. This includes identifying their purchasing power, preferred housing unit type, location, age, purchase purpose, finance size, and so on. Using our potential customer model, we can forecast the high price in chain fires in the next 90 days for any given district under their specific needs. This gives developers the information they need to enhance competitiveness by targeting the right demographic and design, optimizing products that meet the new standard requirements. At the current stage, we hope to help developers position their products accurately at early stage, reducing the cost of the late stage adjustments and improving product alignment with market demand. Looking ahead, we will focus on building customization and community operation capabilities to help developers stand out in the move-in ready new home market. By complementing developers with our strength in move-in ready new home sales through regulatory reduction and the bottom line production, our value to developers will extend from brokerage to product source. Thank you. Thank you. Your next question comes from Daniel Chen from JP Morgan. Please go. [Foreign language] My question is on the home renovation and furnishing business. We have seen that the margin improvement has been strong on a d aily basis, and revenue growth is healthy. What's the key growth driver behind? Is there further room for cost optimization? Meanwhile, are we going to expand the city coverage or are we going to further eoptimize our sole network? Thank you. Thank you, Daniel. The home renovation and furniture business maintained a relatively high growth rate in the first half of this year. Skill wise, its revenue reached RMB 7.51 billion, up 16.5% year-over-year. On the profitability front, the second property margin was 32.3% in the first half of the year, rising by 1.3 percentage points from the same period last year. Operational efficiency also improved significantly at the CT level in Q2. Operation efficiency enhancement is the focus of our home renovation business. This year we have implemented a series of initiatives aimed at enhancing fundamentals like our product and delivery capability, streamlining our organizational structure, and unconfirmed management and operational efficiency. This effort have led to continuous improvement in our performance. Here I'd like to elaborate. In terms of cost, the home renovation business expense mainly include the mature and labor cost formal materials. We cut procurement cost by consolidating brands and SKUs and moving to centralized procurement. By leveraging customer insight to streamline brand selection and SKU counts, we have consolidated procurement to three or four brands for most categories and achieved significant SKU reduction. Centralized procurement rate for primary and auxiliary materials reached more than 50% in Q2 2025 compared with over 20% in the same period of last year. This increased volume for SKU in each category has led to a significant decrease in the unit price of some products that were awarded contracts. On the labor side, we have improved service providers' work efficiency by optimizing order dispatching rules, enhancing the system order distribution capability, and focusing project manager service area on specific business districts, also while allocating more resources to high quality service providers. In Q2 2025, average monthly order intake per professional project manager was more than double last year's average, driving significant improvement in both sales efficiency and income. In terms of the sales and marketing expenses, this mainly covers the sales personnel cost for designers and accounting managers and store and bulky channel cost as a percentage of revenue. Sales personnel costs for designers and other roles significantly decreased year-over-year, primarily due to our ideal transformation of the home renovation business organization structure. We streamlined the design team, optimized the overall home renovation business workflow, eliminated certain roles in the sales process, and shifted the functions towards agents. Our digital tools such as AI proposal and lightweight bins have significantly improved operation efficiency in the sales process. The average monthly order volume per designer had increased from around 0.8 order last year to over 1.2 orders in the second quarter of this year. To optimize store cost, we closed some underperforming large stores and piloted small sites. Community-centric premium home renovation stores near our home construction concrete styling center where we integrated master design productized showrooms. We hope to strengthen the synergy between our housing transaction business and the new issue initiatives, reducing store costs and improving sales per unit area while exploring a new one-stop full service home renovation model, [OT & E] expenses. We also made some structural enhancements responding to service scope middle and back office personnel. The average number of orders supported by each middle and back office personnel increased by 70% year-over-year in this Q2. This initiative enabled us to achieve a better operational result while continuously improving the service quality in Q2. This year, the customer compliance rate of our home renovation and furniture business dropped to below 10% from over 25% in the same period last year. We have seen a significant improvement in the unit economies at the city level. In the Beijing area, revenue increased from over RMB 700 million in the first half of 2023 to RMB 1.15 billion in the first half of 2024 and exceeded RMB 1.5 billion in the first half of this year, representing a year-over-year growth rate of 30%. The gross profit margin in the first half of 2023, 2024, and 2025 was 35%, 36.1%, and 36.3% respectively. The operational margin at the city level rose from around 5% in the first half of 2023 to over 11% in the same period of 2025. The remarkable improvement in the Model Cities UE has boosted our confidence in the business continuous operation and the future success. There is still plenty of room for operational efficiency improvement. Moving forward, our focus will shift from optional structure optimization this year to implementing ongoing innovation in business models, products, and technology. Thank you. Thank you. Your next question comes from Xiaodan Zhang from CICC. Please go. [Foreign language] Thanks management, for taking my questions. We know that since its launch in the end of 2023, Beihaojia has brought a number of projects to the market. Drawing on our personal experience accumulated over the past year or so, could management share the future plans for Beihaojia and specifically what business model will it adopt? Will there be an upper limit on the investment budget for individual projects? Thank you. Thank you, Sophie. We have been very clear about our Beihaojia strategic direction. We are adamant about not being developers in terms of business models. We are dedicated to an asset-light model business. Except for our Chengdu Financial City project and Shanghai Fengxian Xincheng project, we will not independently operate other projects. The [Beihaojia] model does not provide funding solutions. We will continue to explore a platform model that offers full front-to-back-end service for developers, construction contractors, product owners, and asset partners, including product solutions and marketing services. Our product solutions cover [C2N] product positioning on the design plans backed by AI and big data. Our marketing services are integrated online and offline promotional services for more efficient customer acquisition. Regarding TADA Capital, which I know is a concern for all of you, we will set a strict limit on the peak total investment from our own funds based on the amount already deployed by the group. As of June 30, we will invest approximately RMB 1 billion in additional self-owned funds. After the exit of two proprietary development projects in Chengdu and Shanghai, the limit of our capital occupation for this business will be reduced by the investment amount of these two projects, further lowering our aggregate self-owned funding cap. Thank you. Thank you. We are now approaching the end of the conference call. I will now turn the call over to your speaker host today, Ms. Siting Li, for closing remarks. Thank you once again for joining us today. If you have any 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.