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United States securities and exchange commission logo
May 21, 2020
Yongdong Peng
Chief Executive Officer
KE Holdings Inc.
Building Fudao, No.11 Kaituo Road, Haidian District
Beijing 100085
People's Republic of China
Re: KE Holdings Inc.
Draft Registration
Statement on Form F-1
Submitted April 24,
2020
CIK No. 0001809587
Dear Mr. Peng:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
DRS Form F-1 filed April 24, 2020
Conventions that Apply to this Prospectus, page 8
1. We note your definition
of gross transaction value is calculated by the total amount of
transactions
facilitated on your platforms "regardless of whether the transactions are
actually closed."
Please tell us if management also takes into consideration the number of
transactions that
ultimately closed in relation to GTV in evaluating performance.
Yongdong Peng
FirstName LastNameYongdong Peng
KE Holdings Inc.
Comapany NameKE Holdings Inc.
May 21, 2020
Page 2
May 21, 2020 Page 2
FirstName LastName
Summary Consolidated Financial and Operating Data, page 14
2. Please expand your table in an amended filing to include five years of
financial data.
If you determined this information was not necessary to disclose tell
us your basis for
conclusion. Refer to Item 301 of Regulation S-K.
Adjusted Net Profit and Adjusted EBITDA, page 88
3. We note your adjustment that adds back amortization of intangible
assets resulting from
acquisitions and business cooperation agreement to arrive at Adjusted
Net Income. Please
enhance your disclosure in future filings to describe in more detail
what acquisitions and
agreement this adjustment relates to. Additionally, revise your
disclosure to indicate that
the adjustment excludes expense related to assets that contribute to
revenue generation.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
91
4. We note your disclosures of potential adverse impacts from COVID-19 in
the risk factors
section. Please revise the MD&A to discuss the impact of the
coronavirus on your
financial condition and results of operations and your capital and
financial resources,
including the specific impacts that your business has experienced from
the COVID-19
pandemic (e.g., reduction in the number of homes listed or sold,
reduction in demand for
services related to home sales, home renovations or financings). See
Item 5.D of Form
20-F as referenced in Item 4.a of Form F-1 and refer to CF Disclosure
Guidance: Topic
No. 9 for additional guidance.
5. We note the disclosure on page 158 that Lianjia, your real estate
brokerage business,
accounts for a significant portion of your total revenues. Please
revise the MD&A to
provide additional information regarding the significance of Lianjia
to your business,
including the percent of revenues attributable to Lianjia. In
addition, confirm whether
you will discuss material trends in your revenue streams in future
filings. See Release 33-
8350.
Critical Accounting Policies, Judgments and Estimates
Revenue Recognition, page 113
6. We note your disclosure that you consider yourself to be the principal
in transactions
where you sign the housing agency service contracts with housing
customers or real estate
developers and split commissions with other brokerage firms who
collaborate with you to
complete housing transactions in accordance with the platform
agreement. Please expand
on the terms of the contract(s) that you sign with both the housing
customers or real estate
developers and the other brokerage firms, and explain to us how you
arrived at the
conclusion you are the principal in the transaction with respect to
both parties. In your
response clarify for us whether you believe the other brokers are a
customer of your listing
platform business, and the basis for your conclusions. To the extent
you conclude that the
Yongdong Peng
KE Holdings Inc.
May 21, 2020
Page 3
other brokers are customers, tell us how you considered the guidance
in ASC 606-10-32-
25 when accounting for the commissions paid to other brokerage firms.
Employees, page 169
7. Please provide additional disclosure regarding the statement in this
section that as of the
date of the prospectus, the number of your dispatched workers does not
exceed 10% of
your total labor force. We note the disclosure that as of December 31,
2019 you had
82,282 employees and 76,217 dispatched workers.
Principal and Selling Shareholders, page 199
8. Please add a column to reflect the number of securities being offered
by each selling
shareholder. See Item 9.D.2 of Form 20-F.
Directed Share Program, page 239
9. To the extent you continue to include a directed share program, please
revise to clarify
whether shares sold under the program will also be subject to a
lock-up agreement.
2.11 Financing Receivables, page F-26
10. Please disclose your policy for resuming accrual of interest on
financing receivables.
Refer to ASC 310-10-50-6.
2.22 Advertising Expenses, page F-34
11. Please describe the general terms of an arrangement for online traffic
acquisition and
clarify the types of third parties you enter into these arrangements
with. Include within
your response whether or not prepayment for such services is industry
practice and
provide the amount that you have prepaid for advertising for the
periods presented.
19. Taxation, page F-62
12. We note the Group considers positive and negative evidence to
determine whether some
or all of the deferred tax assets will more-likely-than-not be
realized and that
this assessment considers the nature, frequency and severity of recent
losses and forecasts
of future profitability. Please provide your analysis that supports
the remaining deferred
tax asset is realizable. Tell us how you considered your history of
net losses when
forming your conclusion.
Item 7. Recent Sales of Unregistered Securities, page II-1
FirstName LastNameYongdong Peng
Comapany NameKE Holdings Inc. upon in making the exemptions available. See Item
701(d)
13. Please disclose the facts relied
of Form S-K.
May 21, 2020 Page 3
FirstName LastName
Yongdong Peng
FirstName LastNameYongdong Peng
KE Holdings Inc.
Comapany NameKE Holdings Inc.
May 21, 2020
Page 4
May 21, 2020 Page 4
FirstName LastName
Signatures, page II-8
14. Please include the signature of your controller or principal
accounting officer. See
Instruction 1 to Signatures for Form F-1.
You may contact Howard Efron at 202-551-3439 or Shannon Menjivar at
202-551-
3856 if you have questions regarding comments on the financial statements and
related
matters. Please contact Pam Howell at 202-551-3357 or Erin E. Martin at
202-551-3391 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Real
Estate & Construction