Hello, ladies and gentlemen. Thank you for standing by for KE Holdings Incorporated's first quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. Today's conference 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 first quarter 2021 earnings conference call. The company's financial and operating results were published in the press release earlier today and are posted on our 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, Mr. Xu will provide additional details on the company's financial results. Before we continue, I refer you to our Safe Harbor Statement in our earnings press release, which applies to this call, as we'll 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 matters, 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, Stanley.
Thank you, Matthew. Hello, everyone, and thank you for joining us today on our first quarter 2021 earnings conference call. We are very grateful to have achieved operational and financial results in the first quarter that considerably exceeded expectations. Thanks to the tailwinds from China's robust economic growth following the COVID-19 pandemic and the adherence of the national policy, housing for living, not for speculation, as well as our unwavering focus on the long-term goal of delivering excellent consumer experience through quality service. Our total GTV grew rapidly to RMB 1.07 trillion, up 224.2% year-over-year. Meanwhile, the self-reinforcing virtual cycle of efficiency and scalability driven by quality service was further enhanced on our platform. We continue promoting industry digitalization by further building online infrastructure. In the first quarter, our housing dictionary contained data for over 244 million homes in China.
Average MAUs, including our platform's apps and retail mini programs, reached RMB 48.5 million in the first quarter, up 78% year-over-year. The expansion of our network scale also continued at a robust pace while we remain focused on the quality of our network. By the end of the first quarter, the total number of connected stores reached 48,700, up 25.4% year-over-year. Seamlessly and win-win collaboration among stores and brands continued to prevail on our platform. In the first quarter, 76% of transactions on our platform were completed through cross-store collaborations, and the transactions completed through cross-brand collaborations remained steady at 36% on our platform, while connected stores accounted for 83% of existing home listings.
In addition, we continuously supported our connected stores and brands in recruiting, cultivating, and retaining agents in the first quarter, which led to 41.8% year-over-year growth of the number of agents on our platform, reaching a total of 528,000. With that overview, I would now like to provide you with some color on our existing home transaction services business. Total GTV of existing home transactions in China grew 133% year-over-year in the first quarter. The substantial gain was in part due to the low base in 2020, caused by the severe impact of the pandemic, as well as the impact of some structural transaction growth at the regional level. On our platform, GTV of existing home transaction reached RMB 673.4 billion in the first quarter, increasing 244.2%, and the unit store GTV of existing home transactions achieved 174.7% year-over-year expansion.
Continuously improved service quality and efficiency of connected stores were the primary driver of these robust gains. In the first quarter, we initiated an agent specialization strategy, which encourages agents to focus on either existing home sales, new home sales, or home rentals, rather than their traditional mixed functions in the industry. Aided by the cooperative mindset we've fostered among agents, along with clearly defined roles and performance-based commission allocation mechanisms. This strategy helps agents sharpen their focus, cultivate stronger professional service capabilities, promote efficiency and efficient customer conversion across different offerings, and ultimately improve store efficiency and the consumer experience. The agent specialization strategy has proven very effective in enhancing consumer experience and store efficiency. Taking the pilot city of Hangzhou as an example, over 30,000 agents were assigned to different roles in the first quarter.
Unit store GTV was 11% higher in the store where agent specialization was implemented compared to stores that have not divided agent functions. At the end of the first quarter, we had implemented this mechanism in 20 cities, covering 17,800 stores. Given the encouraging early results, we plan to adopt this strategy in batches in at least 30 cities this year. In order to create value for our consumers one step further and improve the real estate transaction process, we began opening offline contract service centers in our major cities. Our goal is to further guarantee transaction security, streamline the signing process, and enhance the efficiency of multi-parties. The real estate contract and signing process tends to be very complicated and often requires comprehensive knowledge across financial, legal, and tax fields. The lack of professional service offerings that fit these needs left consumers exposed to transaction risk.
Our contract service center addresses exactly this pain point as they become the go-to location for customers regarding all contract-related services. The process is completed with a professional contract manager to ensure compliance and full risk disclosure, which provides a safe, efficient, and convenient contract experience for our customers. By the end of the first quarter, we had opened 74 contract signing service centers in 21 cities. Switching gears to our new home transaction services. In the first quarter, GTV for new home transaction increased 96% year-over-year in China, which was attributable to the low base last year, as well as developers' strong incentive to accelerate sales volume. GTV of our new home transaction services was RMB 343.4 billion, up 194.9% year-over-year, driven by the 220% GTV growth of connected stores and other channels as we continue to enhance the efficiency and professional training to our connected agents.
On par with our stellar financial performance, we also made substantial stride in new home transaction, in digitalization, content enrich, and ecosystem governance. This aim to empower service providers such as developers and continue to enhance the service quality and maximize value for the customer. As we communicated during our first quarter earnings call, we are dedicated to build online content for new home transactions to improve the consumer experience, online penetration, and facilitate this segment's digital transformation. As of March 31, we enriched comprehensive and multi-dimensional information for more than 10,000 new home sales projects on our platform, covering 34 cities and offerings consumer with more online information such as 3D property book through data processing. Together with platform and AI-generated online content such as evaluation assessment reports and AI housing layout plans, we were able to better satisfy the consumer's needs for new home online information.
We also optimized our new home sales traffic and the lead acquisition strategy. Thanks to all these initiatives, we generated on average a 10% increase in new home customer leads in those 34 cities in the first quarter and significantly enhanced the online experience for customers. Moreover, we launched a new home business conduct improvement plan to advocate for a transparent and healthy new home sales environment based on governance and a better collaboration mechanism in the new home transaction services. Our goal is to facilitate a fair, safe, efficient, and orderly ecosystem for the new home transaction services that addresses the improper practice that have existed for a long time, such as vicious competition for customers, customer information leakage, and false rebates.
By promoting governance mechanisms in the industry, including rules and protocols, as well as the capability to implement them, we aim to protect agents' rights and offer a sense of security and certainty to them. Eventually, this would substantially protect the legitimation interest of developers and improve agent efficiency and income, enhance the customer experience, and create a vicious cycle that enhance the overall operating efficiency of the new home industry. In the first quarter, we implemented a verification system at the agent level and put in place city-level supervision teams. We have also signed agreements with 91% of developers on our platform on five don'ts, making a firm commitment to the developers and the overall industry. For new homes, another important initiative is the new home sales empowerment plan.
By cultivating dedicated agents with expertise on new home transaction services, as well as online and offline full spectrum customer acquisition capabilities, the plan caters to consumers' different needs when purchasing new home projects compared with existing homes. At the same time, the portfolio of new home sales channels we offer to developers is further enriched, better meeting their needs for more focused and efficient sales channels. Lastly, on our emerging services, we have made steady progress in home renovation services and financial services. We completed 451 home renovation units in Beijing in the first quarter, while progressively iterating the infrastructure, including multiple self-developed systems. Among them, our self-developed Beike BIM System Version 1 was launched in the first quarter. As part of the industry infrastructure, the Beike BIM system successfully digitalized home renovation and decoration design.
For designers, the BIM system enables automatic drawing output, accurate real-time quotation, and the generation of digital Bill of Materials, BOM, as well as accurate VR design efforts supported by the VR capability available on our platform. This not only solves the industry-wide problem of visualizing and translating the abstract design from a designer's mind, but also lays out the foundation for the final construction feasibility with higher enhanced data accuracy. For customers, it's greatly reinforcing the notion that on our platform, what you see is what you'll get and empower them to take control of renovation costs in real-time. The service reliability is greatly enhanced. We believe we have established the industry-leading position in the infrastructure we provide for home renovation and decoration, including the system products and applications for both consumers and service providers.
In terms of financial services, recognizing 50% of sellers in existing home transaction have a demand for property redemption, we promoted the Anxin Bao products to meet owners' redemption needs more efficiently, and at an average 26% decrease in cost. At the end of the first quarter, this product had entered seven cities, improving the overall transaction experience for homeowners in existing home transactions. In summary, 2021 is off to a strong start. Our financial and operational performance has spotlighted our core strengths, and we continue to gain traction with our AC network in new and existing home markets. The national policy of house are for living, not for speculation, that underpins the foundation for a steady and healthy real estate market provides added support to our mission to transform the housing transaction and service industry in China.
Going forward, we will continue to evolve our business and invest in initiatives close to our core while creating a new and better normal for the industry, building trust and increasing value for everyone along the way. With that, I would like to turn the call over to our CFO, Xu Tao, for a closer review of our first quarter financials. Thank you.
Thank you, Stanley. Thank you, everyone, for joining us. I would like to provide a brief overview of our first quarter of 2021 financial results. We are pleased to deliver another strong quarter of financial results marked by high revenue growth and strong profitability. Our net revenue increased by 197% year-over-year to RMB 20.7 billion in Q1, exceeding both high ends of our guidance and the street consensus. The rapid growth of our net revenue was driven by solid GTV growth of 224.2% year-over-year to RMB 1.07 trillion. The high growth rate in the first quarter of 2021 was primarily attributed to a lower base in the same period of last year on the impact of COVID-19.
Although we experienced the impact of Chinese New Year in Q1, our net revenue in Q1 still surpassed the revenue in both Q2 and Q3 of last year and only declined single-digit on a sequential basis, demonstrating the strong momentum of top-line growth. In particular, our net revenue from existing home transaction services increased by 202.1% year-over-year to RMB 10.2 billion in Q1, mainly due to a 244.2% year-over-year increase in GTV of existing home transaction to RMB 673.4 billion in Q1. Our net revenue from new home marketing services increased by 187.6% year-over-year to RMB 9.9 billion in Q1. Our net revenue to 194.9% year-over-year increase in GTV of new home transactions to RMB 343.4 billion in Q1. Our net revenue from merchant and other services increased by 96.2% year-over-year to RMB 0.6 billion in Q1.
The increase was primarily due to an increase in GTV of financial services around housing transaction services, as well as increased number of home tech region units completed through its count by [audio distortion] . Our revenue increased by 140% year-over-year to RMB 15.9 billion in Q1. Gross profit increased by 860.4% year-over-year to RMB 4.8 billion in Q1. Gross margin increased to 23.3% from 7% in the same period of 2020. The increase in gross margin mainly attributable to a low base in the first quarter of 2020 under the impact of COVID-19 outbreak. Operating expenses were RMB 3.8 billion in Q1, compared to RMB 2.1 billion in the same period of 2020. General and administrative expenses were RMB 2.1 billion, compared to RMB 1.1 billion in the same period of 2020, mainly due to the increase in headcount as well as share-based compensation expenses.
Sales and marketing expenses were RMB 1.1 billion, compared to RMB 577 million in the same period of 2020, mainly due to increase the online offline of advertisements and the marketing teams. Research and development expenses were RMB 638 million in Q1, compared to RMB 451 million in the same period of 2020, mainly due to increase of headcount in experienced R&D personnel as well as increased share-based compensation expenses. Income from operations were RMB 1 billion in Q1, compared to loss of operation RMB 1.6 billion in the same period of 2020. Operating margin was 4.9% in Q1, compared to negative 22.9% in the same period of 2020, primarily due to the increase of net revenue and impact of COVID-19 outbreak in last Q1.
Excluding non-GAAP items, our adjusted income from operation was RMB 1.6 billion in Q1, compared to adjusted loss from operation of RMB 1.5 billion in the same period of 2020. Adjusted operating margin was 7.6% in Q1, compared to negative 28.8% in the same period of 2020. Adjusted EBITDA was RMB 2.0 billion in Q1, compared to negative RMB 1.2 billion in the same period of 2020. Net income was RMB 1.1 billion in Q1, compared to net loss of RMB 1.2 billion in the same period of 2020. Excluding non-GAAP items, our adjusted net income was RMB 1.5 billion in Q1, compared to adjusted net loss of RMB 1.1 billion in the same period of 2020.
Net income attributable to shareholders was RMB 1.1 billion in Q1, compared to net loss attributable to shareholders of RMB 1.9 billion in the same period of 2020. Adjusted net income attributable to shareholders was RMB 1.5 billion in Q1, compared to adjusted net loss attributable to shareholders of RMB 1.1 billion in the same period of 2020. Diluted net income for ADS attributable to shareholders was RMB 0.88 in Q1, compared to negative RMB 3.92 in the same period of 2020. Adjusted diluted net income for ADS attributable to shareholders was RMB 1.25 in Q1, compared to negative RMB 3.64 in the same period of 2020.
As of March 31st, 2021, the combined balance of our cash equivalents, restricted cash, and the short investments amount to RMB 62 billion, or $9.5 billion. Looking forward to the second quarter of 2021, rate of net revenue should be between RMB 22.5 billion and RMB 23.5 billion, representing an increase of approximately 11.7%-16.7% from the same quarter of 2020. The relatively low year-over-year growth rate of our revenue guidance, mainly due to higher base in the same period of last year, which results from meaningful portion of transaction shift from Q1 to Q2 last year due to the impact of COVID-19 outbreak. This piece always reflects company's current and preliminary view of the business situation and market condition, which is subject to change.
Meanwhile, since our business operation has been negatively impacted by COVID-19 outbreak in Q1 last year, and a meaningful portion of transaction has been shifted to Q2 of last year, we suggest investors to look at and compare our financial performance as a whole for the first half of 2021 versus the first half of 2020 to better reflect our business progress. Last but not least, we noticed that certain cities have implemented new city-level real estate policy change during the first quarter to control overheating housing price, which may bring negative impact to the regional real estate market in the short term. Nevertheless, we believe that a stable real estate market is beneficial for the sustainable development of Beike and the whole industry.
Since the residential upgrading demands of customer remain the mainstream in housing transaction market, we believe our industry-leading service will continue to attract more customer and allow us to mitigate short-term fluctuation in the cities. In conclusion, with the long-term outlook of the market industry, we are confident in our growth trajectory. Our commitment is consistently enhancing our accuracy, increasing value to consumers and empowering the service provider while continuing to support to realize our vision. That concludes our prepared remarks. We are right now to open the call for questions. Operator, please go ahead.
As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the queue and roster. For the benefit of all participants on today's call, please limit yourself to one question. If you have additional questions, you can re-enter the queue. If you're going to ask the question in Chinese, please follow with English translation. Your first question comes from the line of Elsie Cheng from Goldman Sachs. Please ask your question.
Hey, Stanley, Xu Tao and Matthew. [Non-English content]. Thank you management for taking my questions and congrats on the strong quarter again. I have three questions. First is about efficiency at Lianjia and Beike stores. Can we share a bit what color into the GTV per store growth as well as the main drivers of the growth for the quarter? Then second is on antitrust regulations in China. How does management think about the regulatory environment and it impacts our company, if any? Third is about the macro and housing industry, where we've seen some tightening policies in couple of Tier 1 cities, and what would be the impact from those cities and how should we think about future trends? Thank you. [Non-English content].
Thank you, Elsie Cheng. Let me take your questions. Regarding our store efficiency, both in Lianjia of our current store. For the first quarter for 2021, the average GTV per store increased 163.3% year-over-year, and the quarter-over-quarter sequentially we decreased 2%. Our proprietary brand of Lianjia year-over-year is increased 182%, and quarter-over-quarter increased 2%. Our connect store increased year-over-year 193%, whereas quarter-over-quarter decreased 5%. The year-over-year increase is mainly due to the effect of COVID-19, because last year due to the COVID-19 outbreak, we shut down our business for one and a half months to secure the safety of our agents and the funds. During that period, our VR tool was not only effective but developed very well. That's all, and then meaningful virtual transaction, which went to this main reason.
For the quarter-over-quarter decrease, this is owing to the seasonality, because normally Q4 is strong quarter, but usually Q1 is relatively weak quarter owing to the Chinese New Year holiday. If you look at this Q1 versus last Q4, the number for this quarter is very meaningful because even though we have the impact of the Chinese New Year, but that will affect both quality, efficiency and scalability of connect store. This further panned out that the traditional low season of first quarter and the peak season of first quarter did not show much impact. The Q1, we still delivered robust result and the number exceeds last Q2 and Q3. Looking back in 2020, GTV per store for our proprietary brand of Lianjia is 164 million to 48 million, and other connect store is 36 million.
By end of 2020, there were more than 31% store passed the 50 million bright line. Looking forward, this number equals to 36.7% in this quarter. That means more than 17,000 stores in Beike platform already passed the 50 million bright line. We anticipate by 2025, more than 90% of our store on platform can pass the 50 million bright line. According to our IT model and set 2019 as basis, we are very confident that our proprietary brand of Lianjia from 2019 to 2024, the CAGR every year will be reached 11%-12%. The connect store efficiency will reach 15%-16% CAGR year- over- year. In the long run, we will upstate will continue to reveal its network effect. The new home sales business development increase efficiency given for the scientific store management and the quality service bring customer satisfaction.
All this will force store efficiency. This is regarding your questions for recent antitrust regulation. The company consistently operate within the bounds of the laws, regulations, and rules. We always prioritize the interest of user and spare no efforts to achieve winning result through our GTV mechanism. Beike insists and is committed to promote the healthy development of the industry, devoted to resolving authentic property listing, this problem caused by the housing supply and the demand balance. Beike is striving to be an outstanding company in full compliance with the rules and regulations. Fundamentally, for our understanding, the antitrust authorities regulate and promote healthy and sustainable industrial development. For sensitive industry equations, there was being more platform-based, digitalized, and automated, and to prevent the disorderly dysfunctions through capital investment that damage the orderly and optimized competition environment.
Regulations are in place to promote healthy development for the industry and encourage development the non-public sectors in the economy. Through this round of frequent communication with the government authorities, as a corporate citizen, we are even more determined to take social responsibility as the top priorities. At the same time, the government also gained a better understanding of Beike's business model and the contribution we have made to help the industry grow and the integration over the past 20 years. Beike sincerely welcomes the supervision, compliance, and suggestions from customers and the public so that we can fix the problem and iterate ourselves and provide the feedback to the society. At the same time, we are also very grateful that the regulatory authority for their understanding and guidance of our business and the recognition of what we have brought to the entire industry.
Regarding your third question for the macro economy and some policy change. For our understanding, the Central Economic Work Conference in this year addressed the real estate market that relates to people's livelihoods and welfare. That is why we always mention it is a house for living, not for speculation, and this is the key policy to promote the steady and the healthy development of this market. The goal of this policy is to protect healthy development of the market, not to punish or freeze it. Based on the judgment in this year, some cities have introduced relatively mild measures. These measures have effectively prevented the market from overheating in some cities like Shenzhen, and avoided the severe measures and regional fluctuation down the road, and fostered the market with stable growth, which provide a beneficial environment for Beike's operation.
From a macro perspective, what government want is the stability, is not freezing. In other words, the market cannot too hot and cannot too cold, and the moderate growth market is beneficial to the China economy, especially post the pandemic period. A market with reasonable volatility is the best market to prevent the drastic peaks and the troughs that sometimes give poor future transactions, and that this is very conducive for the operation of companies that has a long-term and market-leading outlook such as we do. Because at Beike, we want to align with government demands, which is steady transaction volume for the long run, instead of benefiting only during the peak seasons. From a macro perspective, obviously, we see all regulatory policies aim to curbing speculative demands in this market with the goal of tweaking them out.
The mainstream demand will still exist in the market, such as the rigid housing demands and the people's willingness to upgrade demand will be gradually released. All of this demand will be gradually released into the remaining months of the year, and the year will come to a conclusion. Although some cities need to be cooled down, the remaining transaction in most of other cities will be still secured. From this perspective, we do not believe nationwide transaction volume will be significantly affected. One case to reference is excluding the GTV in other Tier 1 city like Beijing, Shanghai, Guangzhou, and Shenzhen. Our GTV in March compared with January still increased to 55.5% in March. As a national platform allows us to mitigate the cyclical fluctuation in few cities, and at Beike, we are very confident to deliver robust results for the rest of this year.
The 19 years history of Beike and Lianjia has proven that a neutral market with a balanced supply and demand provides the best foundation for our long-term development. Our course of development from 2017 to 2022 also demonstrates that Beike is a firm supporter and beneficiary of the national policy, House for Living, Not for Speculation. Thanks for asking.
Thank you.
Your next question comes from the line of Thomas Chong from Jefferies. Please ask your question.
[Non-English content]. Thanks management for taking my questions, and congratulations on a very solid set of results. My question is more about the second half outlook as well as the trend for different segments. Can management comment about how the trend will look like for the GTV revenue and the profitability, together with on a by segment basis, how should we think about the trend for the existing home, new home, as well as the emerging services outlook as we come to the second half? Thank you.
Okay. Thank you, Thomas. Regarding the first question for our second half outlook, because Beike has delivered better than expected financial performance in past quarters, continuing after IPO. Looking forward, we have the confidence to continue to deliver strong growth for the rest of the year. Just now we gave the guidance of Q2 revenue is 2.5 billion to 2.85 billion. This is a year-over-year 11%-16% increase. In 2021, fundamental regulatory policy in certain cities is preventing housing prices going up faster than the regression line. As I just answered the question to Elsie Cheng, we still swap the second half of our market will be stable and healthy owing to the rigid demand and the people's willingness to change, to continue to improve their living conditions. We do not believe the nationwide transaction volume will be significantly affected.
We are very confident to deliver the robust results for the rest of the year. This is our answer to the first question. The second is regarding your question for our take rate and our commission rate. I think this question we iterate time to time during past the year calls. The level of commission rates actually reflect the service quality, transaction efficiency, and number of service guarantees we offer. Today, China's residential market, both for existing home and the new home, is a market with full competition and balanced supply and demand. The platform can launch, and the platform has the capability to actively control it, namely raising the commission rate without being justified by the service quality, transaction efficiency, and the number of service guarantees offered is not sustainable. Especially for the new home sales market, it's the typical 3D market.
Developers are more at the dominant position. The net number talks in our past four years, owing to Beike's strong efficiency and excellent service quality, our new home commission rate more than doubled based from 2.55% to 2.66%, 2.71% and 2.74%. In the first quarter, our commission rate for new home is 2.89%. Beike does not have any intention to increase our commission rate. Instead, we will focus on pioneering with the developers to jointly and continuously promote better customer experience. For example, together we pioneered the new home buying process on a three-day cool-down commitment. For existing home sales, in the past three years, our proprietary brand commission rate gradually grows from 2.3% to 2.4%. The platform store gradually grew from 1.89% to 2.07%.
In the future, we still say the change in commission rate will continue to rely on the progression of the service quality, efficiency, and the service commitment we offer to the client. Regarding your second question. Regarding your last question for our emerging financial services and for our decoration, let me talk about the renovation decoration first. In 2020, for the renovation and decoration, the total contract signing is 2,500, and the units most in 2,300. In this Q1, even there is some impact of the Chinese New Year holiday, we still completed the program with 551 units. We recently foresee both the contract signing and the number of unit decoration completed in 2021 will be doubled compared with 2020.
What we are focusing is, we believe the key success factor for decoration construction business are customer acquisition efficiency, control over key channels, and control over delivery process and the service quality. This market in China is big, around CNY 3.6 trillion in 2020, with low market concentration and concentration in the next five years, we estimate will be 5% CAGR, which leaves a huge amount of opportunities. At Beike, we have our inherent beneficiary. We are going to see the first is our significant advantage in customer acquisition. The industry customer acquisition channel was very fragmented. This favors the leverage of advantage from the existing possession, and we anticipate that 6% part of the existing home possession are strongly related to [audio distortion] .
In addition, we have a powerful gene on the online/offline integrated capabilities. Beike has a powerful offline management and empowering gene and have a rich office experience. We recently foresee our system is rooted in the business demand and continuously to improve, effectively assist the management's operation and the income and the business roadmap to assist realize overall control the quality of the workers in the progress. For our financial business, the growth of financial service GTV in Q1 exceeds our expectation. It's mainly due to our sustainable growth of our new home transaction services and our stable financial service penetration rate. Regarding the monetization rate of financial service in Q1 has slightly declined.
This was mainly due to the fact that the Q1 market is very volatile, and the major cities have undergone various regulation adjustments and the consumer's tight budget, pricing and other friction costs have increased. Considering that, we swap nature of financial services to assist the new home transaction and help consumers to complete the transaction. We have strategically launched and expanded the scope of bringing financial services in some cities, especially the guarantee type of services. It actually reflects we pass over some benefits to our transaction business by providing some reliable financial service free of charge to our customers. We are not very hurry to realize that part of profit from those services soon. This is also in line with national policy of house for living and not for speculation. We will continue to support the new market and do the same for consumers. Okay, hope this clarifies. Thank you, Thomas.
Thank you.
[Non-English content]. Hi Thomas, this is Stanley. Let me add on in terms of our philosophies to develop the new business in the future. Firstly, when we look at the new business, we always look at the big potentials or big market size in those kind of areas. We notice around the residential topics, there always be some of the big market potentials, such as renovation and decoration. Now, when we notice those kind of industry, they always have some of the common pain points, such as the overall user experience extremely low, and the overall players in that market are quite fragmented, as well as its overall service procedures are quite complicated. Based on our past 19 years of experience, from the practice to Beike, we believe the transforming of the industrial internet will definitely go through the routine. Firstly, doing deeply, then doing horizontally.
We believe is the only way to do that, right. Especially when we're doing deeply, it means we will dig deep into that industry and understand the standard and build up the new standard for the services. In the past 19 years, we actually get a couple of the takes Firstly, it's what we used to call the three standards. Firstly, it's about the service provider standard, what kind of services could be called good services and how we define that. That will be the first thing, is we can further empower the service providers in the industry, such as decoration and renovation. Secondly, it's the standard for the overall service procedures. Especially, for example, the renovation business during the whole construction part and how we can provide the SOP as well as the define of the new standard for the overall services, is what we continuously work on. The third part, it was the standard for the data as well as the system. We notice the industry or the market, such as decoration, there's no systematic data has been online and has been digitalized.
That is why in the past period, we really focus on how we can build out the standard, how we build out the protocols, as I mentioned during my prepared remarks. For example, we also build out the BIM system as well as other initiatives in order to further increase the standard as well as the protocols understanding for this part of business. In summary, when we look at the new business, as I mentioned, we always had the full commitment as well as the endeavor to further transform that part of business. We strongly encourage the investors to look at our efforts for new business at least on a three-year basis. That will give us more confidence to continue and prepare more efforts to further transforming of the new business in the future. Thank you.
[Non-English content]. Thank you.
Your next question comes from the line of Liping Zhao from CICC. Please ask your question.
Stanley. [Non-English content]. Good evening, Stanley, Tao and Matthew. Thanks for taking my questions. I have two questions here. First one is related to the new home transaction. Some believe the entry barrier of new home transaction business is relatively lower compared to existing home transaction. There are more players in the market recently. What is Beike's core competitive advantage in new home transaction, and what's your strategy to protect and gain more market share? Second question related to existing home transaction. Compared with property service company, Beike has strong efficiency in matching buyers in their listed homes. However, those property service companies have the advantage of being localized players and tight relationship with property owners. In the long run, whether our ACN plans to involve more players around the industry value chain, for example, those property service companies? Thank you.
Okay, thank you. Regarding your first question for the new home sales and our core competency. From Beike's perspective, we would like to say, as you mentioned earlier, right after the Beike platform went live, more players entered into this industry, and there is nothing new. We truly welcome more players entering into this area, which will help us to keep humble and humble. Continuously, we evaluate and polish our strategy and iterate ourselves. From Beike, we do hope to cooperate with everyone to make this industry a better environment for agents and increase agent efficiency and improve the customer experience for the housing transactions. So far, we do realize there is some strange things, like the unfair competition and the capital-based disorderlies function, such as the setting low commission rates, high rebate, or so-called unrealistic evaluation promise.
This is definitely a false proposition, and which is based off deep understanding of how to do business for the new home transactions. In the past last year, with mega internet companies entering into this industry with a high-profile term, which ended up with acquisition at a disapproved valuation level. The core competence of the new home business is only two things. The first is caring about agents, guarantee the agent basic interest and the timely payment.
In Beike, which is Q1, we paid CNY 4.3 billion in advance to secure the agent interest and make sure the people will get money in time. The second is care about customers, improving the customer experience with new home buying process and promoting the three-day cooling-down period. This is what we have continuously doing. We are not perfect at this moment, but we are already on the way of doing so. Where there is a will, there is a way. Currently at Beike, we are currently focused on the online information building, and to become even more closer with the developers to build an orderly and better sales office. Helping to connect the brand and store outside ACN to further promote the customer first.
The common service to be infinitely close to the agenda is what we will continue to spread and continue to focus on. Okay, regarding the second question for the same point that I would actually say this question is for some skipping orders. This is nothing new. There always the so-called skipping order issue in this market in past 20 years, which we treated this as kind of normal leakage loss to our business. We consider this model as a parasitic model. We have always believed that as long as we insist on providing quality service and doing things good for the Chinese consumers, consumer will vote with their feet, which has been also verified by our past 19 years of histories.
For those who want to take advantage from the skipping orders, whether they're property management companies or other broker companies, may be ultimately punished by the market. We believe that as the Chinese market enter into the year of balance between supply and demand, consumers demand for the quality service will rise further, and the consumer will increasingly choose a better quality service provider like Beike. The business volume through the skip order will also decrease, which will not generate skipping negative impact to us in the future. For some property management companies, actually, they do have some local community advantage, but it is difficult to provide consumer with the most comprehensive source of listing. Most owners will not change house in the same complex. This is a common practice from our observation. The property management companies cannot provide enough listing and source within.
At the same time, the real estate developer do not have the ability to partner with the most professional and efficient service provider in the real estate brokerage industry. Therefore, from business model perspective, it is difficult for the property management companies to generate profitability for real estate brokerage service on a large scale. These property companies prevent broker company from serving the owner and damage the owner's rights and interest. According to the Civil Code, the owner has their own rights to vote of the property management companies. In the long run, we believe the development of property management business in China benefits the country and the people. Excellent property management companies have always been the object of our study.
We believe, as well as the property management companies that aim to provide consumer with good service, high quality, will not choose the vicious competition by taking or cutting orders from their consumers. We also welcome and more actively establish contact with the leading property management companies as it is for opportunity to build our partnership in the residential solutions. Thank you.
Your question comes from the line of Binbin Ding from JPMorgan. Please ask your question.
[Non-English content]. I'll translate myself quickly. I have two questions. We noticed that recently the management of Anjuke made some comments on labor regarding the industry as well as Beike. My first question is a follow-up on antitrust. I know from market share perspective, you are apparently not in obvious dominant position in the market, but in what aspects or processes are exposed to the highest potential antitrust risk in your view? Second question is related to competition. From a competitive angle, will the changes in recent competitive dynamic, including the listing of Anjuke, bring any changes or make you become more aggressive in terms of certain operational strategies? Thank you.
Okay. Thank you Binbin Ding. Regarding your second question for the antitrust, I believe I have already gave a very clear answer on the competition when I answered the question from Elsie Cheng from Goldman Sachs. Regarding your first question, whether let's say Anjuke used to be a leading online information company in China, real estate verticals. It has been storing and accumulating online user traffic and used to establish some competitive advantage in this area. Just like E-House, and 58.com, that is one of the fellow industry participants, and we have a rich respect. Normally, we don't comment other peers' performance directly, but I like to take this chance to share our view on how to be a capable company when doing housing construction in China. Maintaining and providing authentic listing is not an option. It is the foundation for all real estate transactions.
Eliminating inauthentic and fake listing marks the beginning of the success for any business model, just as I also mentioned the point one. The point two is when selecting new home projects to work with, people should adhere to a comprehensive and strict risk management system with three key requirements, scale of the project, reasonable commission rate to incentivize agents, and a solid payment callback capability, as well as the positive cash flow of the business operation. The base model is not sustainable. Third, the comprehensive risk assessment system can partake in and experience the offline operation force, healthy accounts receivable turnover days, and deep pocket to provide commission in advance to secure agents' interest. Strict monitoring and prevent rebate and customer intercepting behaviors. This is a long way to go.
The competition through the shorting behavior such as effective commission sharing and lower price while bringing high uncertainty to their business model is a long run. This is definitely the false competition and the legal forbidden of the market. We just come to one thing for Anjuke is we notice the cash position might be a bottleneck for Anjuke to grow its new home business. As doing new home business requires strong cash position or deep pocket. According to Anjuke's prospectus as of February 28, 2021, the balance of Anjuke's cash equivalents, and short-term investments totaled RMB 1.63 billion. While in the same period, Beike just paid commission in advance of RMB 4.3 billion to agents to secure their interest, which covers 160 and 130,000 payments and covered 5,018 projects.
From a [audio distortion] basis, our cash equivalents, and short-term investments amounted to RMB 49.1 billion at the end of Q1, which accounts 30 times of Anjuke. Regarding recent noises from Yao Jinbo on social media, we will reluctantly comment a bit. Where he goes low, we go high. Don't waste time on this guy. Operator, there's more to the next question.
We are now approaching the end of the conference call. I will now turn the call over to your speaker host today, Mr. Matthew Zhao, for closing remarks.
Thank you, operator. Thank you once again for joining us today. If you have any further questions, please feel free to contact Beike's investor relation teams through the information provided on our website. This concludes today's call, and we're looking forward to speaking with you again next quarter. Thank you and goodbye.
This concludes today's conference call. Thank you for participating. You may now disconnect.