Mar 16, 2021
Operator
Hello, ladies and gentlemen, thank you for standing by for KE Holdings Inc.' s Fourth Quarter and Fiscal Year 2020 Earnings Conference Call.
At this time, all participants are in a listen-only mode. Today's conference call is being recorded.
I will now turn the call over to your host, Mr. Matthew Zhao, IR Director of the company.
Please go ahead, Matthew.
Matthew Zhao
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 know 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.
Stanley Peng
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 a 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 RMB3.5 trillion and helped us solidify our leadership position as 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 three year since Beike platform's inception.
The ground we have covered over the past two 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 these tremendous obstacles stakeholders emerge stronger. We carried out a series of measures to have our own and connected agents persist during this difficult period.
This included fee waivers, timely payments, supporting brand owners and store owners to ensure their agent continued to be paid [ph]. With offline 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 agents' 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 sheer adversity 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 stores have annual GTV of RMB50 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 49,310 by the end of 2020 and more than 30% of the agents in our ACN 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 offline expansion was underpinned by increased 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 listings were 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 the Weixin mini programs increased by 88.3% to 48.2 million in the fourth quarter of 2020 while Beike scores were viewed online more than 1.1 billion times, going almost 150 times year-on-year, which implies the increasing significance of the Beike score 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, 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 transactions in China grew 6.7% to RMB9 trillion in 2020 while included RMB7.5 trillion of existing home sales, increasing 11.8% year-over-year. On our platform, GTV of existing home transactions grew 49.5% to RMB1.94 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 as 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 eight core commitments including our authentic listing guarantees, no mark-up in pricing, transaction fund escrow and etcetera. 84% of stores in top 30 major cities pledged to honor these eight core commitments in the fourth quarter of 2020 and 100% of the stores have endorsed the most foundational commitments such as authentic listing guarantees.
Given that consumer fund 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 payment volume at the end of December. In terms of value-added services, one particular note 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 the efficiency improvement as our ACN network efforts 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 both brand owners and store owners carry out systematic business and analysis and measures. 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 RMB15.5 trillion in 2020. Our new home transaction services business delivered robust all-around results, reaching an annual GTV of RMB1.38 trillion with 85% year-over-year growth.
This solid performance was primarily driven by the strong GTV growth of connected stores and other channels. In order to take a better care of our customers, in 2020, we focused on advocating the three-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, stores, owners, and agents and improve their experience in new home transaction services, thanks to our advanced risk control mechanism.
Our AR turnover in new home transaction was 103 days in 2020, only slightly increased from 2019, which was an achievement given that the GTV or our new home transaction grew 85% from 2019, and the industry restored impact from COVID-19 pandemic. As such, agents 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 the whole commission advance progress online and enabled the 24 hours commission advances payments.
For operational enhancements 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 improved capabilities on 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 relationships 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 emphasize to accelerate new home sales 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 service 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 Beike 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 400 foremen, 5,000 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 advisors to interact with customers at an earlier 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 into 2021, we have found key focus areas in taking care of the customers, supporting the service providers, nurturing new -- nurturing our emerging services, creating social value and fostering the critical role technology plays in the broad market opportunity.
First, we continue to see clear sign of the rising power of customers. Very impressive, we have an ongoing 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 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 as 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 of 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 our 30-day turn rate, easy [ph] and intervention model and 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 services. Our focus will be on building out our core competencies, new home renovation services to achieve multi-facilitated 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 advisors' 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 our stable real estate market characterized by a neutral market view.
Our social responsibilities extend to facilitating transition in the residential real estate market from opportunistic one to a more orderly and a 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 returning 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 homes through smart matching and personal recommendations in housing transaction. This will be implemented with the products including our AI assistant Xiaobei, Beike's VR and etcetera.
We will also push forward data and AI driven intelligence operations such as the Intelligent Operations or Beike [ph] in order to improve the overall platform operations efficiency. In summary, the market is rich with opportunity.
By ensuring consumers needs 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 some of its past. 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 close view of our first quarter and the full year financials. Thank you.
Xu Tao
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're pleased to deliver another strong quarter of financial results marked by high revenue growth and strong possibility.
Our net revenues reached a historical high for the fourth quarter of 2020, driven by strong GTV growth. Our net revenue increased by 57.6% year-over-year to RMB22.7 billion in Q4, exceeding both high end of our guidance and the Street consensus.
The growth of net revenue was driven by solid GTV growth of 65.4% year-over-year to RMB1.12 trillion, along with the increased productivity and continuously improved service quality of our platform. In particular, our net revenue from these new home transaction services increased by 56.1% year-over-year to RMB9.2 billion in Q4 mainly due to 69.8% year-over-year increase in GTV of new home transaction to RMB584.7 billion in Q4.
Our net revenue from new home transaction services increased by 58.8% year-over-year to RMB12.9 billion in Q4, primarily to a 55.5% year-over-year increase in GTV of new home transaction to RMB469.2 billion in Q4. Our net revenue from merchant and office services increased by 58.1% year-over-year to RMB0.6 billion in Q4.
The increase was primarily due to the increase of penetration level in the 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 RMB17.2 billion in Q4.
Gross profit increased by 97.4% year-over-year to RMB5.4 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 the internal commission and compensation as a percentage of net revenue from these new 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 agents and other sales channels. Operating expenses were RMB4.2 billion in Q4 compared to RMB5.9 billion in the same period of 2019.
General and administrative expenses were RMB1.88 billion compared to RMB4.56 billion in the same period of 2019 mainly due to the decrease of share-based compensation expenses. Sales and marketing expenses were RMB1.32 billion compared to RMB831 million in the same period of 2019 mainly due to the increase of brand advertising and promotional and marketing activities.
Research and development expenses were RMB714 million in Q4 compared to RMB478 million in the same period of 2019, mainly due to the increase of share-based compensation expenses. Income from operations was RMB1.27 billion in Q4 compared to loss from operations of RMB3.12 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 was RMB2.23 billion in Q4 compared to negative RMB80 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 RMB2.9 billion in Q4.
Net income was RMB1.1 billion in Q4 compared to net loss of RMB31 billion in the same period of 2019. Excluding non-GAAP items, our adjusted net income increased by 4,424.8% year-over-year to RMB2 billion in Q4.
Net income attributable to KE Holdings Inc.' s ordinary shareholders was RMB1.1 billion in Q4 compared to negative RMB3.7 billion in the same period of 2019.
Adjusted net income attributable to KE Holdings Inc. increased by 4,508.2% year-over-year to RMB2 billion in Q4.
For the fourth quarter of 2020, diluted net income per ADS attributable to KE Holdings Inc.' s ordinary shareholders was RMB0.93 compared to negative RMB7.99 in the same period of 2019.
Adjusted diluted net income per ADS attributable to KE Holdings Inc.' s ordinary shareholders was RMB1.71 compared to negative RMB1.15 in the same period of 2019.
As of December 31, 2020, the combined balance of our cash, cash equivalents, restricted cash and short-term investments amounted to RMB65.2 billion or $10 billion. And for the full year of 2020, our business achieved robust operational and financial growth and our GTV increased by 64.5% year-over-year to historical high of RMB3.5 trillion from RMB2.13 trillion, enabling us to remain the second largest commerce platform across all industries in China and the third market expanding platform globally.
Our net revenue increased by 53.2% year-over-year to historical high of RMB70.5 billion from RMB46 billion. Our net income reached historical high of RMB2.78 billion compared to net loss of RMB2.18 billion in 2019.
Our adjusted net income increased by 245.4% year-over-year to historical high of RMB5.72 billion from RMB1.66 billion. Looking forward to our first quarter of 2021, we expect our net revenue to be between RMB18.5 billion and RMB19.5 billion, representing an increase approximately of 159.8% to 173.9% from the same quarter of 2020.
The rapid high year-over-year growth of our revenue guidance is mainly due to the significant negative impact of COVID-19 for our business in the same period last year, which resulted in a meaningful portion of transaction shift from Q1 to Q2 last year. The business outlook reflects the company's current and preliminary view of the business situation and market conditions, which is subject to change.
Last but not least, we believe in the long run under the principle housing for living, not for speculation, the real estate market in China will continue to shift toward a more stable and steady growth. This in turn will create a more favorable environment for us to carry out our commitment to reinvent industry and deliver the highest quality service to 300 million families in China.
Going forward, we will remain to focus on taking better care of the consumer and several platform participants such as brokerage brands, store owners, agents, and real estate developers to take better care of the consumers, while continuously strengthening our competitive moat and growing business at a fast pace. As we continue to reinvent our agent cooperation network infrastructure, user based function and innovative AI technologies, we're confident we will further enhance our 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
Thank you so much. Ladies and gentlemen, we will now begin the question-and-answer session.
[Operator Instructions] And your first question comes from the line of Elsie Cheng from Goldman Sachs. Elsie, your line is now open.
Elsie Cheng
[Foreign Language] Thank you management for taking my questions and congratulations on the strong results again. I have three questions here.
One is really about the changing macro environment and tightening regulation. In housing industry in China, how does it impact Beike and its operations in major cities and how should we think about its impact to our full year results?
And the second is on the comparative landscape. It's been a while since [indiscernible] got privatized and we also observe some developers 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 Beike's strategy in sustaining the competitive moat? And the last one is about emerging businesses.
We continue to see the GTV and revenue scale robustly in the segment. Can the management share a little bit more color into the progress of operations, home decoration and financial services?
Thank you.
Xu Tao
Thank you, Elsie. This is Xu Tao.
Let me address your first question. Let me talk about some policy changes recently.
So over the China housing policies promote housing for living, not for speculation while preventing financial systemic risk arising from the real estate market with layered matter specific policies. So in Chinese, we call this as [indiscernible].
The stable real estate market is beneficial for the sustainable development for Beike and the industry as a whole. The policy we saw to slow the market from our overheating by using a relatively mild regulation and implement the management to prevent more severe regulation matters and greater market fluctuations [ph].
As part of long-term mechanism to maintain [ph] housing market, it also [indiscernible] volatility of the real estate market that was in the past and made the competitive landscape more about this capability, quality and efficiency and create a favorable environment for Beike and the whole industry. From our observation, the recent housing policy has no significant or direct impact on the national real estate transaction momentum, nor brought significant changes in overall market price or the transaction volume.
Since the policy has implemented to some over 50 cities like Shenzhen and Shanghai, but the housing is still necessary and related demand in China. So let me talk about Shenzhen.
In Beike, actually we have a bit of presence for 102 cities and all of our incremental revenue was mainly coming from our newly connected platform business. So Shenzhen is the star city of Beike.
Its market share improved from 17% in 2018 when we launched Beike to 29% in 2020. That still comes low single digit percentage of Beike total GDP in 2020.
So we would like to say at present that we do have centralization program for specific cities and Beike is a platform company and our nationwide platform is able to mitigate the downside risk of the valuation from any particular cities. And also for Shanghai and Shanghai is the largest existing home sales market in China with the market's housing stock over 2 million.
Measures in Shanghai are relatively mild with the limited impact on the transaction volume and we believe the city will return to a housing market with active trading in due time. The recent measures in Shanghai are not as strong as Shenzhen and the impact on the transaction volume and the price will be relatively mild.
This is your first question. Regarding strong competition, yes, we do notice some peers step into this area.
So normally we don't comment on other peers' performance directly, but two things are very certain. 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 area and allowing us to further enhance our capability to be the leader of the industry of Internet and think deeply about our strategy, that is how to take care of our clients and our platform participants to take better care of our clients. Regarding the market conditions, I would like to say directly there are still some competition among the industry or among the developers.
The developers may be hesitant to use somebody's -- one developer as their broker channel due to the competition or might worry about the customer long-term, [indiscernible] the cooperation mechanisms even likely. Beike will hold the different value proposition against to start target or make promise on the future valuations at the beginning of the entrepreneurship.
Beike's business strategy has never been changed and I'd just reiterate again, our strategy is to take care of customers and help the service providers to take care of the customers. So from the financial number and the business performance perspective, no impact to Beike.
If you look at the GTV, our take rate and the contribution margin and DSO in the past three years, the GTV increased around RMB200 billion to RMB747 billion and last year, we further increased RMB1.38 trillion, and the take rate for the new home sales will 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 home continuously improved and improved from RMB3 billion to RMB4.9 billion and the last year is RMB3.2 billion.
And the DSO, also owing our stability, doubled year-over-year, but our DSO improved. In 2018, 117 days, and 2019, 96 days.
Last year, we have slightly increased 103 days just as a combined impact of COVID-19. If you look at the Q3 and Q4 number, we have reduced to 87 days.
There is no impact [ph]. So last question regarding our business strategy for the new business, I would like to invite our CEO Stanley to give the answer.
Stanley Peng
[Foreign Language] This is Stanley. Let me address your question in terms of the emerging services development.
So the next month, we will enter three years of anniversary for the Beike's platform as well as 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're really focused on how we can be with overall standard to the industry. What we got take from the past 20 years of experience is we need to doing 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 a lot of different kind of business such as housing transaction or the decoration as well as the furnitures. Each of them has a significant of the potential market size.
So we will continue to develop the opportunities there. [Foreign Language] We are 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 of the characteristics. Firstly, the industry should be very big enough.
Secondly is we also look at how we can [indiscernible] 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 the secondly is about the financial business.
For the decoration 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 [ph] the systems capabilities.
So we will focus on the workers' management as well as the overall industrial chain management in order to further build up our capability within the decoration business in Beijing. [Foreign Language] In terms of financial business, for this year, we'll continue to improve our capability to promote the online process.
We are trying to build up a system for financial advisors to ensure the working procedures can be complete online. And meanwhile in terms of the customer side, we're also trying to promote the products such as the safeguard [ph] products for the home sellers -- for home sellers' mortgage redemption needs, so 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 will continue to explore the good practice as well as other explorations within the financial services. Thank you.
Elsie Cheng
[Foreign Language]
Operator
Thank you so much. And your next question comes from the line of Binbin Ding from J.P.
Morgan. Binbin, your line is now open.
Binbin Ding
[Foreign Language] So my question is about the pricing strategy. You noticed that recently Beike has gradually raised the secondary home transaction commission rate to 3% in some cities.
So I was wondering number one, in 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% price into 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?
Thank you very much.
Xu Tao
Okay, thank you. It's Xu Tao.
Let me address your question. So for our commission rate for this new home, actually we want to clarify the level of commission rate actually reflects the service quality and the transaction efficiency.
The market of new home sales is a market with full competition and a balanced supply and demand market. Rising commission, we felt, being justified by service quality or transaction efficiency.
It's just like water without force and tree without roots, in other words, just not sustainable. So with a neutral market view, our platform will actively explore bilateral commission model to balance the financial burden between the buyers and sellers whilst striving to improve the overall service quality, commitment coverage and the ability to identify customers with strong purchase power in order to support local brand to improve their power.
So, the business infrastructure of Beike is community-centric store network. So to balance our existing home and the new home sales is very crucial and we encourage our agents to take part in the company's services and client better and serve clients better and build up long-term commitments and professional dignity to continuously improve their service quality efficiency and offers most of guarantees.
So, if you look at our take rate for our existing home sales, in past three years, so there is still a modest increase for our brand of Lianjia in past three years, commission rate from 2.32 to 2.38 and the last year is 2.4, And for our franchise brand of Deyou, the commission rate up and down in a very limited range, so it's varied from -- it's changed from 2.15% and 1.99% and last year is 2.00%. And for our connected brands, 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 last year, 2.07%.
So in conclusion, for our existing home commission rate, we expect a steady growth in both Lianjia, Deyou and our connected stores. The new home sales commission rate, more commitment are covered and the quality of 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, it's also a to-be market, in which we play an important and equal role with the developers. This is a perfect market and high in commission rate with high efficiency, fast cash collection as well as high level of customer commission.
So it's a long run for the new home commission rate. In order to maintain a mutual and beneficial and a sustainable relationship with the real estate developer, we expect commission rate to remain stable and at around 2.77%.
Thank you.
Binbin Ding
Thank you very much.
Operator
Thank you so much. And your next question comes from the line of Steven Tsai from Morgan Stanley.
Steven, your line is now open.
Steven Tsai
[Foreign Language] Thank you management for taking my question. 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 joined later in the second half of ' 19 or first half of '20 in terms of the sales improvement trend that you have observed so far.
Thanks.
Xu Tao
Okay, thank you. Actually in -- we would like to see in 2020, Beike connected more than 47,000 stores and 493,000 agents and our GTV year-over-year, as I mentioned just now, increased 64.5%.
Among this incremental effect, we always understand potential for our operating system, namely the ACN, the agent cooperation network, to promote healthy platform development and prevent virtual competition through the equal system governance. So, in 2020 Beike applied for more than 81.5% listing actually come from third-party stores and more than 75% is cross-store transaction and more than 36% is cross-brand collaboration.
So as a consequence of this, so if you look at our number, just efficiency, namely the annual GTV per store in 2020 just the total number, the big picture, for our brand of Lianjia year-over-year increased 21.2% and for our franchise brand of Deyou year-over-year increased 18.7%. For our connected brand in Beike platform, year-over-year the efficiency increased by 17.2%, just the big picture.
If you look at the cohort base, at the cohort base, their efficiency year-over-year increased over 26%. Thank you.
Steven Tsai
Thank you. It's very clear.
Operator
Thank you so much. And your next question comes from the line of John Lam from UBS.
John, your line is now open.
John Lam
Thank you, management. [Foreign Language] So my -- there are two questions from me.
Number one is about what do we see in terms of the GTV trend for the primary and also secondary transactions. 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 about 8.8%.
And which city has the highest adjusted net margin and what is the level of that margin? Thank you.
Xu Tao
It's Xu Tao. [Indiscernible] me to answer your question.
So we see a steady growth especially for this new home sales sector. This will be different in our outlook for the first quarter.
As I mentioned just now, we expect revenue for the first quarter of 2021 will be reached RMB18.5 billion to RMB19.5 billion. So we cannot give very detailed number for the Q1 because Q1 is still in progress.
So regarding your second question, where cities' margin is high, so let me clarify, internally we do not measure our financial performance by cities. We -- just as a consolidation of the -- so -- and also we just kind of come in and say, internally we have a measurement, the major measurement is like the store efficiency.
As I just talked with the last analyst, we measure the store efficiency by different city, different brand. So this is our internal measurement.
And so far we -- we can see the Shanghai leading the store efficiency, it's very good because where we have our business, we stepped into Shanghai for three years and we continue to recruit new graduate from the colleges and also in Shanghai our local management team issue so many service guarantee and so many business contact for the agents. So overall, the client satisfaction has improved.
The API has continuously improved. So the efficiency of our store, as a consequence, continuously improved as well.
Thank you.
John Lam
Okay, thank you.
Operator
Thank you so much. And our last question comes from the line of Thomas Chong from Jefferies.
Thomas, your line is now open.
Thomas Chong
[Foreign Language] Thanks management for taking my questions and 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 type of a logical upgrade that we should be aware with regard to our back-end ecosystem? Thank you.
Xu Tao
Thank you for the question. This is Xu Tao.
Let me address your first question. Regarding our long-term GTV, revenue and the profitability projections, actually last year when we prepared the IPO, we had this IPO model and released it to the market.
So we still keep our IPO model as unchanged. So in that model, in 2024, we see the GTV will be RMB7.6 trillion and revenue will be over RMB161 billion and net profit will be -- adjusted net profit will be RMB18 billion.
So far we will not change this projection because we need to balance our investment in future and also our profitability and the -- but the management of Beike will have strong confidence to beat any risk on this. So regarding your second question, I will invite our CEO to give some further information.
Stanley Peng
[Foreign Language] This is Stanley. Let me address your second question.
So since we actually have been accumulated huge amounts of data in our operating of history, so in terms of the ACN evolution this year, we will continue using the technology to -- as well as the AI capability to continue iterate our products and to further help the agents to get better services as well as serve better to our customers. So we are using a lot of different types of tools, as I mentioned before such as Beike's [ph] as well as our AI assistant Xiaobei, which has helped the agents -- agent 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 engineer's capability definitely can help of the service as well as the service providers within the industry kind of bring better. So definitely in the future, we will compound the two part of the culture and the capability together to continue to improve the efficiency and the productivity for the ACN network.
Thank you.
Thomas Chong
Thank you.
Operator
Thank you so much. And due to the time limit, I will now turn the call over to your speaker host today, Mr.
Matthew Zhao for closing remarks.
Matthew Zhao
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 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.
Operator
And that does conclude our conference for today. Thank you for participating.
You may all now disconnect.