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  "documentTitle": "KE Holdings (BEKE)",
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  "notes": "Includes a qualitative critique of the Shengdu acquisition citing an expert network interview.",
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      "text": "On both an EV/transaction basis or an EV/store basis, BEKE paid nearly 4x for Zhonghuan. We believe this underscores the absurdity of the price paid for Zhonghuan.",
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      "text": "Zhonghuan Valuation Premium: 3.9x",
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      "text": "Another suspicious acquisition merits scrutiny. BEKE claims that the Company spent RMB 8 billion to acquire Shengdu Home Renovation. Yet Shengdu only operates in several provinces with many of its branches setup in 2021.",
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      "text": "It also notable that whereas BEKE wrote down the value of IFM (through a deemed marketing expense), BEKE wrote up the value of Zhonghuan. Ultimately, we think the evidence shows that BEKE inflated the purchase price of the Zhonghuan acquisition.",
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      "text": "On both an EV/transaction basis or an EV/store basis, BEKE paid nearly 4x for Zhonghuan. We believe this underscores the absurdity of the price paid for Zhonghuan.",
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      "text": "Personally, I think the company think that it is very natural that people want to get a home renovation... but in my opinion, it is a very — like what I said, this industry, the home renovation, the way of acquiring a company like Shengdu is not a very smart move.",
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      "text": "Personally, I think the company think that it is very natural that people want to get a home renovation. If they bought a home, especially if they bought a secondary housing, they want someone to help them to do with their renovation. But in my opinion, it is a very — like what I said, this industry, the home renovation, the way of acquiring a company like Shengdu is not a very smart move. What's more important is that, for the home renovation, you do not have this kind of network effect like what you have with brokerage companies. With the brokerage companies, the more agents that you have, you have a better chance of getting a much bigger market share than a smaller one. But for home renovations, you do not have this kind of network effect. Even if you are 10 times bigger, or even 100 times bigger, than your competitor, it is highly unlikely you can take market share from the small competitor. — Former BEKE senior manager",
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      "text": "BEKE did not disclose the exact amount, but only stated that the purchase price would be capped at RMB 8 billion.",
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