(Yicai Global) Aug. 24 -- Shares in KE Holdings advanced as much as 8.4 percent today despite China's biggest real estate agent announcing a 41.3 percent drop in revenue in the first half from the same period last year amid a cooling property market, as its home decoration and furnishings business showed promising growth.

KE Holdings’ stock price [HKG:2423] closed up 7.9 percent at HKD44.30 (USD5.60) apiece today. Earlier in the day it jumped to HKD43.25.

KE Holdings, also known as Beike Zhaofang, logged revenue of CNY26.3 billion (USD3.8 billion) in the first six months and losses of CNY2.5 billion, the firm said in its latest earnings report released yesterday.

Turnover in its new home decoration and furnishings segment jumped 14-fold year on year to CNY1.5 billion (USD218.5 million) thanks to the acquisition of Shengdu Home Decoration in July last year, the report said.

Despite this, KE Holdings’ main earner remains its real estate business, but this performed poorly due to weak confidence in the property market, high leverage among developers and as recurrent Covid-19 outbreaks hammer sales.

The firm’s sales of preowned homes sank 42.1 percent year on year to CNY767.6 billion (USD111.8 billion), that of new housing plunged 50.6 percent to CNY415.4 billion and revenue from emerging and other businesses plummeted 66.8 percent to CNY41 billion.

Revenue for the third quarter is likely to tumble as much as 8.8 percent to CNY16.5 billion (USD2.4 billion) from the same period last year, the Beijing-based company said.

As a result, KE Holdings is making a number of business adjustments to reduce costs. It has re-organized its teams, cut back on rental expenditure and is dealing with loss-making outlets run by its real estate agency Lianjia.

The firm is also choosing to partner more with state-run property developers in the new housing market. The share of transactions of properties built by state-owned firms was 37 percent in the second quarter, up from 30 percent in the previous quarter, President and Chief Executive Peng Yongdong said.

KE Holdings still faces internal and external challenges and rising uncertainties in the long run, but there were some positive changes in the pre-owned market in the second quarter, said Peng. The firm's operations will become more diversified and complex to adapt to the changing business environment. he added.

Editors: Shi Yi, Kim Taylor