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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Hello, ladies and gentlemen. Thank you for standing by for KE Holdings Inc.'s Fourth Quarter and Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] 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. or Beike's fourth quarter and fiscal year 2020 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, www.investors.ke.com.
On today's call, we have Mr. Stanley Yongdong Peng, our Co-Founder and Chief Executive Officer; and Mr. Tao Xu, our Chief Financial Officer. Mr. Peng will provide an overview of our strategies and business developments, and Mr. Xu will provide additional details on the company's financial results and discuss the financial outlook.
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 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 renminbi.
With that, I will now turn the call over to our CEO, Mr. Stanley Peng. Please go ahead, sir.
Thank you, Matthew. Hello, everyone, and thank you for joining us today on our fourth quarter and fiscal year 2020 earnings conference call. We achieved exceptional growth in 2020, closing the year with strong fourth quarter operational and financial results. Our massive scale, operating efficiency and quality services combined with the strong network effects, have created a self-reinforcing virtuous cycle.
It drove our full year GTV to increase by 64.5% to reach a historical high of RMB 3.5 trillion and helped us solidify our leadership position at the largest housing transaction and services platform in China and the second largest commerce platform across all industries in China.
2020 marked the 19th anniversary of Lianjia's operations and the third year since the Beike platform's inception. The ground we have covered over the past years as well as our outstanding results in 2020 have provided further affirmation of our belief that the path we are taking in doing the right thing, even if it is difficult, is the right path. It also brings us closer to our vision of providing comprehensive and trusted housing services to 300 million families in China.
I would now like to provide you with a closer look at exactly what we accomplished over the past year.
Looking back, 2020 was a challenging year for our business and for the world. Facing the COVID-19 pandemic, we worked hand in hand with the connected brands, stores, agents, developers and other platform participants to overcome this tremendous obstacles and emerge stronger. We carried out a series of measures to help our own and connected agent persist during this difficult period. This included 3 levers: timely payments; supporting brand owners and store owners to ensure their agents continue to be paid and [ exempted ]. With off-line activities severely hampered by the pandemic, we promoted online agent training, online VR property showing and online property sales when the pandemic just broke out. These initiatives supported agent capabilities to continue to push forward online, lock-in sales opportunities and build out the inventory of potential buyers during the period. As the impact from COVID-19 started to ease in China, the sales performance of connected stores and agents on our platform recovered rapidly, demonstrating the significant value of our platform. This period of share adversely enhanced trust to brand owners, store owners and agents in the Beike platform while in turn contributed to accelerated momentum and improved operational efficiencies.
In 2020, we focused on expanding the scale of our AC network with quality growth. The total number of connected stores grew by 25.1% year-over-year, reaching 46,900 by the end of 2020. Among which, over 30% of our stores have annual GTV of RMB 50 million or more, which we believe is an adequate level to support sustainable growth of the stores compared to only 19% in 2019.
The total number of agents on the Beike platform grew by 37.9% to 493,1000 (sic) [ 493,088 ] by the end of 2020, and more than 30% of the agents in our ACM have college backgrounds.
75% of the total existing home transactions were completed through cross-store collaborations while connected stores contributed over 81% of existing home listings, indicating continuously enhanced cooperation on the platform.
Our off-line expansion was underpinned by increasing industry digitalization along with our growing online presence. We recorded data for almost 240 million homes in our housing dictionary and VR data for more than 9 million homes, more than 73% of our existing home listing we covered by VR property showing by the end of 2020. The number of VR property showing exceeded 66 million in 2020 compared with 3.9 million in 2019.
Total MAUs of our platform apps and retail mini programs increased by 88.3% to 48.2 million in the fourth quarter of 2020 while Beike stores were viewed online more than 1.1 billion times, growing almost 150x year-on-year, which implies the increasing significance of the Beike store in assessing service quality for both consumers and agents.
Next, let me give you more color in terms of our existing home transaction services business. In the past year, we further solidified our competitive advantages in the existing home transactions market, which continued enhancing consumer experience and empowering brands, stores and agents to improve productivity and service quality and achieved substantial growth on multiple fronts.
According to Beike's Research Institute, GTV of existing home transaction in China grew 6.7% to RMB 9 trillion in 2020 while including a RMB 7.5 trillion of existing home sales, increasing 11.8% year-over-year.
On our platform, GTV of existing home transaction grew a 49.5% to RMB 1.94 trillion in 2020. GTV of connected stores grew 109.9% year-over-year, accounting for 48% of total GTV from existing home transactions compared with 34% in 2019, and third-party stores are increasingly playing a vital role on our platform.
We always focus on creating value for our customers and providing them with a wide range of commitments as well as value-added services. We endeavor to promote the 8 core commitments including authentic listing guarantees, no markup in pricing, transaction from escrow and [ in center ]. 84% of stores in top 30 major cities pledged to honor these 8 core commitments in the fourth quarter of 2020, and 100% of the stores has endorsed the most foundational commitments such as authentic listing guarantees. Given that, consumer funds safety has been one of the biggest concerns in home transactions. We strengthened the escrow services for transaction funds which covered more than 80% of transactions, non-mortgage payments volume at the end of December.
In terms of value-added services, one particular noteworthy was the premium package for home seller services. Through which, 45,000 housing transactions were completed. Our focus on quality services brought us not only recognition from customers and agents but also financial rewards. As a result, in 2020, the commission rate of our existing home transaction services increased slightly for both Lianjia and connected stores. Meanwhile, brands, stores and agents on our platform increasingly benefit from efficiency improvement as our AC network effects play out.
In terms of operational enhancement, we vigorously promoted the store scoring and ranking system to find and reward the finest service providers and supporting them to flourish. We also deployed a series of digital operational tools to help our both brand owners and store owners carry out systematic business analysis and matters. As a result, unit store GTV of existing home sales for both Lianjia and connected stores achieved the mid- to high teens percentage growth rate in 2020.
Turning to the new home transaction services business. According to National Bureau of Statistics, GTV of China overall new home transaction grew by 10.8% to RMB 15.5 trillion in 2020. Our new home transaction services business delivered robust all-around results, reaching annual GTV of RMB 1.38 trillion with a 5% year-over-year growth with solid performance was primarily driven by the strong GTV growth of connected stores and other channels.
In order to take better care of our customers, in 2020, we focused on advocating the 3-day free return commitment for new home sales which we collaborated with developers to pioneer. In the fourth quarter, this commitment was offered in 100 cities. We put considerable effort to support brands, store owners and agents and improve their experience in the new home transaction services.
And thanks to our advanced risk control mechanism, our AR turnover in new home transaction was 103 days in 2020, which nicely increased from 2019, which was a achievement given that the GTV of our new home transaction grew 85% from 2019. And the industry withstood impact from COVID-19 pandemic. As such, agent on our platform will be able to receive their commissions on a timely basis. Meanwhile, to further support the [ agents, the commission advances ], we extended cover more than 40% of new home sales commission split. We successfully brought to the whole commission advance progress online, and enabled the 24 hours commission advances payments.
For operational enhancement in new home sales, we invested in online infrastructure and equipped agents with advanced tools and methodologies. Leveraging our stronger capability to mobilize agents, we made concentrated sales process possible for certain projects in order to increasing productivity and project sell-through certainty. These initiatives led to continuously improve capabilities of both our own and connected agents and resulted in more than [ 20 ]% growth in terms of unit store GTV on new home sales. We have built relationship with an increasing number of real estate developers and have provided more tailored and efficient services.
As of the end of 2020, the number of new home projects on sale listed on our platform reached 8,600 compared with 7,700 at the end of 2019. In the second half of 2020, we directed our emphasis to accelerate new home sell-through promotion and promoting and implementing cross-city and cross-region sales. We are pleased that our efforts are bearing fruit and our market share and leadership position in the new home transaction services market have gone from strength to strength.
A few comments on our emerging services. Regarding our new home renovation services in 2020, we focused on Beijing market to expand our capabilities and produce meaningful results. We developed the beta version of the in-house SaaS platform for service providers and an app for consumers as well as detailed SOPs management. We completed more than 1,200 projects and connected more than [ 404,005,000 ] workers and 200 designers at the end of 2020.
For real estate financial services, we have been continuously upgrading products and offerings to optimize customer experience and encouraging financial advisers to interact with customers at an easier stage of the transaction process to improve penetration and customer experience. In 2020, the penetration of our financial services averaged 8.4% and reached 10.5% in the fourth quarter.
Looking to 2021, we have 4 key focus areas tapped in taking care of the customers: supporting the service providers; nurturing our emerging services; creating social value; and fostering the critical role technology plays in the broad market opportunity.
First, we continue to see a clear sign of the rising power of customers. [ Pretty impressive ] we have an unwavering commitment to consistently refine the consumer experience through increased digitalization and enhanced service quality. In 2021, we will leverage our capabilities in systematic data collection and artificial intelligence as well as our extensive offline network to enrich the content offering in new home sales to meet consumers' demand for our abundant and accurate online information for new homes. We will start by building out the housing dictionary for new homes -- new house, even house -- will have more than -- each house will have more than 200 description fields that incorporate basic housing information as well details that our user insight tools have identified as particularly important to Chinese customers. Leveraging our AI technology, we can provide more extensive information even pinpointing the lighting and noising conditions on different floors. In terms of service quality, we intended to provide our customers and platform participants with even more security and quality through the continuous construction to our platform's infrastructure. Specifically, we plan to make all customer complaints public for increased transparency and further improve customer satisfaction.
Second, we are increasingly convinced of the tremendous value of service providers through tools that we plan to launch in 2021 such as [ 30-day tool rate ], easy [ worrying ] and the intervention model and the professional scoring ranking and training framework for more platform participants. We aspire to identify and retain the finest service providers, including brand owners, store owners and agents and empowering them to flourish.
Third, we will nurture the healthy development of emerging and other sources. Our focus will be on building out our core competencies in home renovation services to achieve multi-customer satisfaction improvement by providing a seamlessly integrated transaction experience. Meanwhile, we will continuously upgrade the product and service offerings and increase the service efficiency of our real estate financial services. For example, we will launch the system to bring all of the financial advisers daily operations online in 2021.
Fourth, we are committed to creating more social value. We believe it is our corporate responsibilities to assist in building a stable real estate market characterized by a neutral market view. Our social responsibilities intended -- intends to facilitating transition in the residential real estate market from a opportunistic one to a more orderly and sustainable one. Meanwhile, we aim to fulfill our broader social responsibilities through a series of initiatives in 2021. For example, our platform will offer agent recruiting and retaining program to provide more job opportunities to the community, especially for new graduates. We will continue to upgrade our rental services, offering young tenants more convenient and affordable experience. Furthermore, since our deeply rooted, community-centric stores and agents have gradually become gathering points for local residents, we will continue to contribute in community services across the country. For example, we will continue the smartphone training sessions, volunteer our agents, which we offered to more than 140,000 elderly citizens in the past year.
Lastly, on the technology front. In 2021, we will continue to leverage our massive and authentic housing and transaction data and our deep understanding of business scenarios to innovate AI-driven technologies that drive optimal alignment between agents, consumers and home through smart matching and personal recommendations in housing transaction. This will be implemented with the products including our AI system, Xiaobei, Beike's pick, VR and [ Central ]. We will also push forward data and AI-driven intelligence operations such as the intelligent operations of Beike core in order to improve the overall platform operations efficiency.
In summary, the market is rich with opportunity. By ensuring consumers' needs are met while simultaneously supporting service providers, online and offline, we are driving transformational industry change. The progress we made in 2020 show us we are on the right path. We are confident in our growth trajectory forward as we continue to expand our self-reinforcing network that is greater than the sum of its parts. With this in mind, we will work to create further value for the consumers, agents, store owners, brands, real estate developers and all other platform participants.
With that, I would like to turn the call over to our CFO, Xu Tao, for a closer view of our fourth quarter and full year financials. Thank you.
Thank you, Stanley. Thank you, everyone, for joining us. I would like to provide a brief overview for our fourth quarter and fiscal year 2020 financial results. We are pleased to deliver another strong quarter of financial results marked by high revenue growth and strong profitability.
Our net revenues reached historical high for the first quarter of 2020, driven by strong GTV growth. Our net revenue increased by 57.6% year-over-year to RMB 22.7 billion in Q4, exceeding both high end of our guidance and The Street consensus. The rapid growth of net revenue was driven by solid GTV growth of 65.4% year-over-year to RMB 1.12 trillion along with increased productivity and continuously improve the service cost on our platform. In particular, our net revenue from existing home transaction services increased by 56.1% year-over-year to RMB 9.2 billion in Q4, mainly due to 69.8% year-over-year increase in GTV of existing home transaction to RMB 584.7 billion in Q4.
Our net revenue from new home transaction services increased by 58.8% year-over-year to RMB 12.9 billion in Q4, primarily due to a 55.5% year-over-year increase in GTV of new home transaction to RMB 469.2 billion in Q4.
Our net revenue from emerging and other services increased by 58.1% year-over-year to RMB 0.6 billion in Q4. The increase was primarily due to the increase of penetration level in company's financial services around our housing transaction services as well as increased number of home decoration units completed through the company's platform.
Cost of revenues increased by 48.2% year-over-year to RMB 17.2 billion in Q4. Gross profit increased by 97.4% year-over-year to RMB 5.4 billion in Q4.
Gross margin increased to 23.9% from 19.1% in the same period of 2019. The increase of gross margin was mainly due to the decrease of internal commission and the compensation as a percentage of net revenue from the existing home transaction service completed through Lianjia brand as well as the decrease of commission split as a percentage of net revenue from new home transaction services completed through connected agent and other sales channels.
Operating expenses were RMB 4.2 billion in Q4 compared to RMB 5.9 billion in the same period of 2019.
General administrative expenses were RMB 1.88 billion compared to RMB 4.56 billion in the same period of 2019, mainly due to the decrease of share-based compensation expenses.
Sales and marketing expenses were RMB 1.32 billion compared to RMB 831 million in the same period of 2019, mainly due to the increase of brand advertising and promoting marketing activities.
Research and development expenses were RMB 714 million in Q4 compared to RMB 478 million in the same period of 2019, mainly due to the increase of share-based compensation expenses.
Income from operation was RMB 1.27 billion in Q4 compared to loss from operation of RMB 3.12 billion in the same period of 2019.
Operating margin was 5.6% in Q4 compared to negative 21.7% in the same period of 2019, primarily due to the decrease of share-based compensation expenses.
Excluding non-GAAP items, our adjusted income from operations were RMB 2.23 billion in Q4 compared to negative RMB 80 million in the same period of 2019. Adjusted operating margin was 9.8% in Q4 compared to negative 0.6% in the same period of 2019, mainly attributable to increased gross margin and improvement of operating leverage.
Adjusted EBITDA increased by 2,183.9% year-over-year to RMB 2.9 billion in Q4. Net income was RMB 1.1 billion in Q4 compared to net loss of RMB 31 billion in the same period of 2019. Excluding non-GAAP items, our adjusted net income increased by 4,424.8% year-over-year to RMB 2 billion in Q4.
Net income attributable to KE Holdings Inc.'s ordinary shareholders was RMB 1.1 billion in Q4 compared to negative RMB 3.7 billion in the same period of 2019.
Adjusted net income attributable to KE Holdings Inc. increased by 4,508.2% year-over-year to RMB 2 billion in Q4. For the fourth quarter of 2020, diluted net income per ADS attributable to KE Holding Inc.'s ordinary shareholders was RMB 0.93 compared to negative RMB 7.99 in the same period of 2019.
Adjusted diluted net income per ADS attributable to KE Holdings Inc.'s ordinary shareholders was RMB 1.71 compared to negative RMB 1.15 in the same period of 2019.
As of December 31, 2020, the combined the balance of our cash, cash equivalents, restricted cash and short-term investment amounted to RMB 65.2 billion or USD 10 billion.
And for the full year of 2020, our business achieved robust operation and financial growth, and our GTV increased by 64.5% year-over-year to a historical high of RMB 3.5 trillion from RMB 2.13 trillion, enabling us to remain the second largest commerce platform across all industry in China and the third largest spending platform globally.
Our net revenue increased by 53.2% year-over-year to a historical high of RMB 70.5 billion from RMB 46 billion.
Our net income reached a total high of RMB 2.78 billion compared to net loss of RMB 2.18 billion in 2019.
Our adjusted net income decreased by 245.4% year-over-year to historical high of RMB 5.72 billion from RMB 1.66 billion.
Looking forward to our first quarter of 2021. We expect our net revenue to be between RMB 18.5 billion and RMB 19.5 billion, representing an increase approximately of 159.8% to 173.9% from the same quarter of 2020. The relative higher year-over-year growth of our revenue guidance is mainly due to the significant negative impact of COVID-19 to our business in the same period last year, which result in a meaningful portion of transaction shift from Q1 to Q2 last year.
The business outlook reflects company's current and preliminary view of the business situation and market conditions, which is starting to change.
Last but not least, we believe the long run under the principle housing for living not for speculation. The risk market in China will continue to shift towards a more stable and steady growth. This in turn will create a more favorable environment for us to carry out our commitment to reinvent the industry and deliver the highest quality service to 300 million families in China.
Going forward, we will remain focused on taking better care of the consumer and support platform discipline such as Beike brands, store owners, agents and real estate developers to take better care of the consumers while continuously strengthening our competitive modes and our growing business at a faster pace. As we continue to reinvent our Agent Cooperation Network infrastructure, user base function and innovative AI technologies, we are confident we will further enhance our monetization capability and deliver sustainable growth.
That concludes our prepared remarks. We would like to now open the call to questions. Operator, please go ahead.
[Operator Instructions] And your first question comes from the line of Elsie Cheng from Goldman Sachs.
[Foreign Language] Congratulations on strong results again. I have three questions here. One is really about the changing macro environment and tightening regulation in the housing industry in China. How does it impact Beike and its operations in major cities? And how should we think about the impact to our full year results?
And the second is on the competitive landscape. It's been a while since UBA got privatized, and we also observed some developers who are proactively building their own digitalized team. So can management share a little bit more color on your observation in the key trends in the industry and bigger strategy in sustaining the competitive mode?
And the last one is about emerging businesses. We continue to see the GTV and revenue scale robustly in the segment. Can management share a little bit more color into the progress of the operations in home decoration and financial services?
Thank you, Elsie. This is Xu Tao. Let me address your first questions. Let me talk about some positive changes recently. So all of China's housing policy is aiming to promote housing for living, not for speculation while preventing the financial systematic risk arising from the real estate market with layered matter and specific policies. So in Chinese, we call this from [Foreign Language]. But stable growth, the market is stable growth in market is beneficial for the sustainable development for Beike and the industry as a whole.
The so far policy result [indiscernible] to slow the market from our [ seeking ] by using a relatively mild regulation and we implemented [indiscernible] to prevent the most severe regulation matters and a greater market fluctuation down the road.
As part of the long-term mechanism to maintain an attractive housing market, it consumes the -- it also consumes the volatility of the real estate market that was offered in the past and makes the competitive landscape more about the cyclicality, quality and efficiency, and create a favorable environment for Beike and the whole industry.
From our observation, the recent housing policy had no significant or direct impact on the national real estate transaction momentum nor brought significant changes in the overall market price of the transaction volume since the policy has been limited to some overheated cities like Shenzhen and Shanghai. But the housing is still necessary and rated demand in China.
So let me talk about Shenzhen. In Beike, actually, we have a business presence for 102 cities. And all of our incremental revenue was mainly come from our newly connected platform business. So Shenzhen is a Star City of Beike. Its market share improved from 70% in 2018, when we launched Beike, to 29% in 2020. That still counts low single-digit percentage of Beike total GTV in 2020. So we would like to say, at present that we don't have centralization problem for spacious cities. And Beike is a platform company, and our nationwide platform is able to mitigate the downside risk or devaluation from any particular cities and also for Shanghai. And Shanghai is the largest [ befitting ] home sales market in China with large housing stock opportunity.
Measures in Shanghai are relatively mild with a limit impact on the transaction volume, and we believe the city will return to a housing market with active trading in due time. The recent matters in Shanghai are not that strong at Shenzhen as the impact on the transaction volume and the price will be relatively mild. This is your first question.
Regarding some competition. Yes, we do notice some peers step into [indiscernible]. So normally, we don't comment on other peers' performance directly, but the two things are very certain. The first, Beike's IPO has inspired so many people, and there will be more players and capital step into the residential real estate market. The second, Beike is very confident and is very happy to see new industry entrants to step into this barrier and allowing us to further enhance our capability to be the leader of the industrial Internet. And [ it says a deep play ] about our strategy. That is how to take care of our clients and help platform participants to take better care of our clients.
Regarding the marketing conditions, I'd like to say [ directly is ], there are still some competition among investors or among developers. The developers may be hesitant to use some of this: one, they reprice their broker channel due to the competition or much worry about the customer monitoring, which relates cooperation mechanism even unlikely. Beike always hopes to different value proposition, again, to set target or make a promise on the future valuation at the beginning of the entrepreneurship. Beike's business strategy has never been changed. And as I just reiterate, again our strategy is to take our customers and help service provider to take care of customers.
So from the financial numbers and the business performance perspective, no impact to Beike. If we look at the GTV, our take rate and contribution margin and [ DSO in ] past 3 years, the GTV will increase from CNY 280 billion to CNY 747 billion. And last year, we further increased CNY 1.38 trillion. And the take rate for the new home sales, we have a modest increase. So our take rate increased from 2.66 to 2.71 and last year increased to 2.74.
And the contribution margin for the new homes continues to improve. And improved from CNY 3 billion to CNY 4.9 billion, and the last year is CNY 8.2 billion.
And the DSO, we're also -- all in all, [ our stability ] doubled year-over-year, but our DSO is improved. In 2018, 117 days and 2019, 96 days. Last year, we have slightly increased 103 days just as the combined impact of COVID-19, if you look at the Q3 and Q4 number, we are reduced to 87 days, but still, no [ solid ] impact.
So last question regarding our -- this strategy for the new business, I would like to invite our CEO, Stanley to give the answer.
[Foreign Language]
[Interpreted] This is Stanley. Let me address your question in terms of the emerging services development. So the next month, we will -- to enter the 3 years of anniversary for the Beike's platform as well as the Lianjia's almost, like, 20 years of anniversary. So in the past 20 years, we actually accumulated a lot of experience, especially during our procedures to restructuring of the housing transaction industries. So we really focus on how we can build up the overall standard to the industry. What we've got to take from the past 20 years’ experience is we need to do in the business horizontally, firstly, right? So then after that, when we get to know the know-how of the industry, we can start doing the platform business vertically. So that's also what we got to take. And we noticed for a lot of different kind of -- the business such as housing transaction or the decoration as well as furnitures, each of them has a significant big of the potential market size, so we'll continue develop of the opportunities there.
[Foreign Language]
[Interpreted] We're looking for the opportunities in the industrial Internet going forward. When we look at the potential sectors to develop, we always look at the following the characteristics. Firstly, the industry should be very big enough. Secondly is we also look at how we can [ copy cat ] and [ iterate ] of our capabilities from the past years of the operational experience.
And firstly -- and thirdly, we also look at the potential opportunities within that track. So from that perspective, I can give you two examples going forward in terms of our continued development. So first is about the decoration business. And secondly, is about the financial business. For the declaration business, we will -- in the year of 2021, as I described in our -- in the prepared remarks, so we'll continue to focus on the Beijing market. We will focus on to build up the SOP for this industry and build up the SaaS system as well as continue [ iterate ] of the system's capabilities. So we will focus on the workers' management as well as the overall industrial trend management in order to further build up our capability within of the decoration business in Beijing.
[Foreign Language]
[Interpreted] In terms of financial business, for this year, we'll continue to improve our capability to promote the online process. We're trying to build out the system for the financial advisers to ensure that working procedures can be completed online. And meanwhile, in terms of the customer side, we're also trying to promote the products such as the safeguard and [ cymbal ] products for home sellers' mortgage redemption needs -- so the -- in order to connect the buyers' mortgage with the seller together to further improve the user experience. So in the future, as I mentioned, so looking into 2021, we'll continue to explore the good practice as well as other explorations within of the financial services. Thank you.
And your next question comes from the line of Binbin Ding from JPMorgan.
[Foreign Language] So my question is about the pricing strategy. We noticed that recently, Beike has gradually raised a secondary home transaction commission rate to 3% in some cities. So I was wondering, number one is how many cities have they started to adopt the 3% commission rate? And second is in each city, how do we differentiate the pricing of our in-house Lianjia stores versus third-party connected stores? The third one is, are we going to further expand the 3% pricing to more cities in China? And how should we look at the secondary home commission take rate in the rest of the year? And a related question is, do we have any plan to increase the commission rate in new home transactions in the near future?
Okay. Thank you. Tao Xu here. Let me address your question. So for our commission rate for the new home, actually, we want to -- we want to clarify the level of commission rate actually reflects service quality and transaction efficiency. The market of its new home sales is a market with a full competition and balanced supply and demand market. Rising commission without being justified by service quality or transaction efficiency is just like water without source and tree, which are the [ roots ], in other words, it's just not sustainable. So with the neutral market view, our platform will actively explore our natural commission model to balance the financial burden between buyers and sellers while striving to improve our service quality, commitment, coverage and ability to identify customers with strong purchase power in order to support the local brand to use [ their purchase ] power. So the basis of the basic infrastructure of Beike is community centric store network. So to balance our existing home and new home sales is very crucial. And we encourage our agents to take part in the community services and the [ local ] and [indiscernible] and build-up long-term commitment and perpetual dignity to continuously improve the service quality, efficiency and offers most guarantees.
So if you look at our take rate for our existing home sales in past 3 years, so there's still in a modest increase for our proprietary brand of Lianjia in the past 2 years, commission rate from 2.32 to 2.38 and the last year is 2.4.
And for our franchise brand of [ Douyo ] the commission rate up and down in a very mid-range. So its range is varied from -- it's changed from 2.15% and 1.99% and last year is 2.00%. And for our connected brand in Beike platform for 278 brands. So we can average the take rate to have a modest increase from 1.89% to 1.92%, and the last year is 2.07%. So including the for our existing home commission rate, we expect a steady growth in both Lianjia, [ Douyo ] and our connected stores. The existing home sales commission rate are more commitment are covered and the [ car ] service are improved and this will be the benefit from our platform. And for the new home commission rate, actually, for new home sales market is also a [ 2B ] market in which we play an important and equal goal with the developers. This is a perfect market, and the high commission rate reflects our high efficiency, faster cash collection as well as high level of customer resolution.
So it's a long run for the new home commission rate. In order to maintain mutual and beneficial and sustainable relationship with the realty developer, we expect commission rate to remain stable and at around 2.77%. Thank you.
And your next question comes from the line of Steven Tsai from Morgan Stanley.
[Foreign Language] My question is related to the sales efficiency improvement for the connected stores. You previously mentioned that on a core basis, the third-party stores improved GTV per store by 100% and 26% in their first and second year, respectively, on the platform. So just wondering if there is any difference for the stores that join later in second half of '19 or first half of '20 in terms of the sales improvement trend that you have observed so far?
Okay. Thank you. Actually, in -- we would like to say in 2020 Beike connect more than 47,000 stores and 493 agents. And our GTV year-over-year, as I mentioned just now, increased 64.5%. Among these incremental facts, we always understand the importance of our operating system, namely the ACN, the agent cooperation network, to promote healthy platform development and prevent Beike's competition through the ecosystem governance.
So in 2020, reaching Beike platform more than 81.5% listing actually come from third-party stores and more than 75%, there's a cross-store transaction, and more 36% is cross-brand collaboration. So as a consequence of this -- so if you look at our number, just store efficiency, namely [ all-new IOTT REIT] per store, in 2020, this is the total number. The big picture for our third brand of Lianjia year-over-year increased 21.2%.
And for our [ fourth brand ] of [ Douyo ], year-over-year, they increased 18.7%.
For our connected brand in Beike platform, year-over-year the efficiency increased by 17.2%. This is a big picture. If you look at the cohort base and the cohort base, their efficiency year-over-year increase is over 26%. Thank you.
And your next question comes from the line of John Lam from UBS.
[Foreign Language] So there are two questions for me. Number one is about what do we see in terms of the GTV trend for the primary and also secondary transaction? And also, do we have the guidance for 2021 GTV? And my second question is regarding the margins. We see that during the fourth quarter, adjusted net margin is up 8.8%. And which city has the highest adjusted net margin? And what is the level of that margin?
So this is Xu Tao, let me address your question. So we see a steady growth, especially for the existing home sales sector. This will be defining our business outlook for the first quarter. As I mentioned just now, we expect revenue for the first quarter of 2021 where we reach CNY 18.5 billion to CNY 19.5 billion. So we cannot give a very detailed number for the Q1 because Q1 is still on progress.
So regarding the second question, we see this margin is high. So let me clarify. Internally, we do not measure our financial performance by cities. We -- just as a consolidation of the bigger entities. So -- and also, we just kind of comment say, internally, we have a environment. This is a managerial environment is like the store efficiency. As I just talked with the last analyst, we measure the store efficiency by different cities, different brands. So this is our internal environment so far. So we can see the Shanghai City, the store efficiency is very good because when we have our business, we stepped into Shanghai for 3 years. And we continue to recruit new graduates from the college. And also in Shanghai, our local management team, they issue so many service guarantee and so many come back for the Lianjia agent. So overall, the client satisfaction has improved, and the API has continuously improved. So the efficiency of our store, as a consequence, you see improve as well.
And our last question comes from the line of Thomas Chong from Jefferies.
[Foreign Language] Congratulations for a strong set of results. My question is more about the long-term outlook. Can management talk about how we should think about the long-term trend in terms of the GTV and profitability? Are we getting a bit even more optimistic about the outlook in the next few years? And on the other hand, can you comment about any technological upgrade that we should be aware with regard to our back-end ecosystem?
Thank you for your question. This is Xu Tao. Let me address your first question. Regarding our long-term GTV, revenue and the profitability production. Actually, last year, when we prepared the IPO, we have this IPO model and releases to the market. So we still keep our IPO model as that changed. So in that model in 2024, we see the GTV will be CNY 7.6 trillion. That revenue will be over CNY 161 billion. And that profit will be adjusted net profit will be CNY 18 billion. So far, we will not change this projection because we need to balance our investment in future and also our profitability. And the management of Beike, we have strong confidence to beat and raise on this.
So regarding your second question, I will invite our CEO to give some further explanation.
[Foreign Language]
[Interpreted] This is Stanley. Let me address your second question. So since we actually has been accumulated a huge amount of data in our operational history. So in terms of the ACN evolution this year, we'll continue using the technology as well as AI capability to continue to integrate our products and to further help the agents to get better services as well as serve better to our customers. So we're using a lot of different types of the tools, as I mentioned before, such as Beike's peak as well as our AI system Xiaobei, which has helped the agents -- people to continue optimize as well as improve their efficiency as well as productivity;. So in the following -- in the previous of the experience, in terms of the industrial Internet, we truly believe the engineers' capability definitely can help of the service as well as the service providers within the industry can bring better. So definitely, in the future, we will combine the two part of the culture and the capability together to continue to improve the efficiency and productivity for the Asian network. Thank you.
Thank you so much. And due to the time limits, I will now turn the call over to your speaker host today, Mr. Matthew Zhao, for closing remarks.
Yes. 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 teams 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.
And that does conclude our conference for today. Thank you for participating. You may all now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]