Profit drops by 20%, but Beike co-founder makes a massive 800 million investment to increase holdings in real estate

On March 16, Shell (KE Holdings) released its 2025 performance results: full-year net profit fell sharply by 26.7%, especially in the fourth quarter of last year, which was only 0.8 billion yuan.

Over the past year, every battle in China’s real estate market has been extraordinarily difficult. In conventional thinking, during headwinds, companies and entrepreneurs would prioritize cutting long-term investment—which is completely understandable. However, Shell’s two co-founders, Peng Yongdong and Dan Yirgang, were instead unusually steadfast in anchoring themselves to another number—setting aside more than 800 million yuan for donations.

Under the sun, there’s nothing new. What a company chooses to stick with when times are hard—that’s the real thing. The two co-founders do not take their annual salaries in cash; instead, they donate everything to the industry. What are they trying to do?

41% of the figure’s secret

After a long period of rapid growth, China’s real estate industry has entered a new normal of deep adjustment. This is not a simple shift in the cycle, but a systematic reshaping of the industry’s model, growth logic, and competitive methods. By 2025, this adjustment has not ended; if anything, it has gone even deeper.

You can clearly see this pressure from Shell’s financial report. The inventory housing business—once viewed as a safety net—felt the chill strongly. Even though the number of secondhand transactions increased by 11% over the full year, there was a “squeeze gap where GTV increased and net revenue decreased,” severely compressing profit margins.

The reasons behind this are complex: it could be that falling home prices reduced single-commission income, while the fixed costs required to maintain a large agency-agent network remain relatively rigid. It could also be Shell’s active choice at the bottom of the cycle to stabilize transactions, preserve the ecosystem, and safeguard its market share.

Beyond the obvious decline in profits, Shell’s 2025 financial report also reveals changes in its business structure. The report shows that Shell’s revenue from “non-property transaction businesses” rose to a historical high of 41%. This means that when both new home and secondhand home transactions face shrinking volumes and mounting pressure, Shell is accelerating its shift from a single transaction platform toward a more complete “residential services platform.”

According to the financial report, in 2025, home renovation revenue broke 15.4 billion yuan, rental net revenue was about 21.9 billion yuan, and the leasing segment achieved full-year profitability—showing that non-transaction businesses have already developed self-sustaining “blood supply” capabilities.

In 2021, Peng Yongdong led Shell to acquire Shengdu, and later proposed a layout strategy of “one body with two wings.” Shell’s ability to hold its ground depends on the fact that in recent years it has not been doing a simple either-or—sticking to inventory homes or blindly crossing into other fields. Instead, it followed the direction Peng Yongdong had proposed many years ago, completing a strategic shift from the “transaction track” to the “residential track.”

800 million for the people who sell houses

Interwoven with the business adjustments is the two founders’ large-scale donations.

According to publicly disclosed information, in April 2025, Peng Yongdong announced the donation of 9 million shares of Class A ordinary stock, which was then worth about 440 million yuan. Half of the money was used for service providers’ medical welfare, and half for assisting tenants. This was the first time since Shell went public that a founder sold shares, and all proceeds were used for charity.

In February 2026, Peng Yongdong and Dan Yirgang jointly donated 10 million shares of Class A ordinary stock, worth about 400 million yuan, to establish the “Healthy Home Shell Guardian Fund,” covering more than 500,000 first-tier service providers on the platform.

In less than a year, the two core executives’ cumulative donated stock value has reached nearly 840 million yuan.

On the surface, this money mainly went toward health coverage and charitable assistance. But if you look at it in the context of the industry environment, you can also see a way of thinking from Shell: during industry slumps, continue to allocate resources to people.

Whether it is support for sudden illnesses, unexpected risks, or assistance for families’ economic backbones and children’s education, at its core these arrangements are about supplementing risk protection for frontline service providers—reducing personal and family pressure as much as possible when unexpected situations arise.

In terms of results, on the one hand, such investments help ease the worries of practitioners, adding some longer-term stability beyond short-term income. On the other hand, for a company that is highly dependent on service experience, reputation, and offline execution capability, allocating resources to service providers is itself a long-term consideration from a management perspective. As for how much effect these investments ultimately will bring, it still needs to be observed over a longer period.

Self-restraint in difficult times

Some people from Shell’s management have mentioned that these donations themselves mean that some kind of change is taking place.

From Lianjia to Shell, this company has gone through multiple real estate cycles over the past two decades. But what’s special right now is that market volatility and trust anxiety are deepening at the same time; consumers value the professionalism, transparency, and certainty of services more than ever before.

How does Shell plan to respond to market changes like this?

Judging by Shell’s recent actions, whether it’s the ongoing donations by the co-founders or pushing the initiative to “adhere to a neutral market view,” it doesn’t look like a series of scattered moves. It looks more like self-imposed restraint.

According to public disclosures, nearly 100,000 agents have voluntarily signed related commitments, using “three must-dos and six prohibitions” as behavioral guidelines. They emphasize not subjectively discouraging the market, not distorting policies, and not creating anxiety—returning to professionalism and integrity. This is not a simple slogan; it is a renewed confirmation of professional boundaries when emotional expressions in the industry run rampant.

Another more direct change appeared in March this year. Shell further loosened restrictions on talent mobility within the platform, giving individuals more choice. This seems like an adjustment to organizational mechanisms, but in reality it reflects a shift in management philosophy: the platform no longer relies on closed constraints to retain people; instead, it pressures itself to attract and help people succeed with better “soil,” better tools, and clearer development space.

At the 2025 performance conference, Peng Yongdong said that China’s residential housing market is still one of the largest and most valuable residential markets in the world. The meaning behind this statement is that Shell is not pessimistic about the long term. If it’s “a long runway with thick snow,” why wouldn’t Shell continue to keep its focus on scale?

According to Peng Yongdong, in 2025, Shell mainly did two things: improving operational and governance management and advancing strategic upgrades. The purpose is, first, to create more room for long-term strategic transformation and for continuously promoting progress in the residential industry. Second, going forward, it will pay more attention to the certainty of transactions, the precision of matching, and improvements to unit economics models.

From this perspective, what Shell is most worth looking at now is not how much money it made (or earned) in this single year, but where it chose to put its money, where it built its capabilities, and what it bet on for the future when the industry was at its coldest.