--- title: "\"Big Banks\" JP Morgan: KE's stock price correction makes valuation attractive, maintains \"Overweight\" with a target of 47 yuan" type: "News" locale: "en" url: "https://longbridge.com/en/news/280406058.md" description: "JP Morgan released a report stating that KE's stock price has corrected by 20%, reflecting the market's expectations for the mainland real estate market. Although the real estate market lacks momentum in the short term, the current valuation is attractive, with expected price-to-earnings ratios of 20 times and 15 times for 2026 and 2027, respectively. KE has the ability to generate excess returns, with expected profit growth of 28%. Morgan Stanley maintains an \"Overweight\" rating, with a target price of HKD 47" datetime: "2026-03-25T02:22:38.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/280406058.md) - [en](https://longbridge.com/en/news/280406058.md) - [zh-HK](https://longbridge.com/zh-HK/news/280406058.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280406058.md) | [繁體中文](https://longbridge.com/zh-HK/news/280406058.md) # "Big Banks" JP Morgan: KE's stock price correction makes valuation attractive, maintains "Overweight" with a target of 47 yuan JP Morgan published a research report indicating that KE (02423.HK) stock price has fallen 20% from its high at the end of January, reflecting the market's expectations of weak policies in the mainland real estate market and sluggish sales in the primary market. Although the real estate market still lacks momentum in the short term, after the stock price adjustment, the current price corresponds to a forecasted price-to-earnings ratio of 20 times and 15 times for 2026 and 2027, respectively, relative to operating profit growth of 54% and 39% for 2026 and 2027. The bank believes this represents an attractive entry point for long-term investment. The bank pointed out that KE has excess return capability (company alpha): 1) Market share continues to increase, with total transaction volume growth in the second-hand and new housing markets outpacing the market by 3% and 5% respectively in 2025; 2) Despite the challenging market environment this year, expected profits can still grow by 28% to RMB 6.4 billion, benefiting from optimized brokerage networks and improved gross margin contributions; 3) Strong commitment to shareholder returns, with buybacks and dividends totaling approximately 7% of the current market value. Regarding artificial intelligence, the company believes that AI will not replace brokers but can automate standardized tasks to enhance efficiency, and has been embedded into core workflows. JP Morgan expects that KE's profitability will continue to improve driven by efficiency-driven models and cost structure optimization, with fixed labor costs having declined for four consecutive quarters. The bank has lowered its revenue forecast for this year by 5%, mainly reflecting downward adjustments in second-hand and rental income forecasts, but maintains net profit forecasts largely unchanged, reflecting strong gross margin contributions in the fourth quarter and reduced spending assumptions. It maintains an "Overweight" rating, based on a forecasted price-to-earnings ratio of 17 times for 2027, with a target price of HKD 47 ### Related Stocks - [GF CSI All Share Financials ETF (159940.CN)](https://longbridge.com/en/quote/159940.CN.md) - [Yinhua CSI Interior Real Estate Theme ETF (159768.CN)](https://longbridge.com/en/quote/159768.CN.md) - [ChinaAMC CSI All Share Real Estate ETF (515060.CN)](https://longbridge.com/en/quote/515060.CN.md) - [KE Holdings Inc. (BEKE.US)](https://longbridge.com/en/quote/BEKE.US.md) - [BEKE-W (02423.HK)](https://longbridge.com/en/quote/02423.HK.md) - [Hwabao WP CSI 800 Real Estate ETF (159707.CN)](https://longbridge.com/en/quote/159707.CN.md) - [China Southern CSI All Share Real Estate ETF (512200.CN)](https://longbridge.com/en/quote/512200.CN.md) ## Related News & Research - [Great China Holdings Posts Deeper 2025 Loss on Property and FX Hits](https://longbridge.com/en/news/281250022.md) - [Cherish Sunshine to Guarantee RMB42.44 Million Loan for Mainland Subsidiary](https://longbridge.com/en/news/281184873.md) - [Guangzhou R&F Properties Revamps Board and Committees Ahead of 2026 AGM](https://longbridge.com/en/news/281182304.md) - [Zhuguang Pledges Silver Grant Stake to Secure US$210 Million Senior Notes](https://longbridge.com/en/news/281300086.md) - [China’s Foreclosed Property Market Rebounds as Buyers Bid Up Auction Prices](https://longbridge.com/en/news/281353101.md)