Q&K International Group Limited (NASDAQ: QK) (“Qingke” or the “Company”) is a leading technology-driven long-term apartment rental platform in China, offering young, emerging urban residents conveniently-located, ready-to-move-in, and affordable branded apartments as well as facilitating a variety of value-added services. Qingke is one of the pioneers in providing branded rental apartments in China. Under its dispersed lease-and-operate model, the Company sources and transforms apartments, mostly from bare-bones condition, into standardized furnished rooms to lease to people seeking affordable residence in cities, following an efficient, technology-driven business process.
Qingke’s dispersed lease-and-operate model allows it to source apartments from individual landlords in different locations and manage them centrally, leveraging advanced IT and mobile technologies. The dispersed lease-and-operate model enjoys certain advantages, including increase scalability, a more abundant and flexible supply of apartments, less initial capital outlay, and makes it is easier to achieve a nation-wide brand awareness.
Qingke strategically focuses on sourcing apartments under the dispersed lease-and-operate model in relatively inexpensive yet convenient locations, typically near subway stations, to provide tenants value for money. The Company does not own the rental apartments but leases them from landlords under long-term leases that usually provide for a minimum term of five to six years, or lease-in contract lock-in period, and can be extended for another two to three years.
Technology is at the core of Qingke’s business. The Company applies technology to every step of its operational process from apartment sourcing, renovation, and tenant acquisition, to property management. This enables the Company to operate a large, dispersed, and fast-growing portfolio of apartments with high operational efficiency, delivering superior user experience. For example, it utilizes big data analytics to establish a fair and efficient pricing mechanism. This mechanism also provides clear guidance to its apartment sourcing staff and ensures certain rental spread can be achieved during the lease term. Qingke has also developed a technology-driven, innovative project management system to centrally manage suppliers and contractors for apartment renovation, cleaning and maintenance, monitor the work process, track the work schedules, and exert quality control. Moreover, its intuitive mobile applications allow tenants, landlords, and third-party service providers to execute transactions or provide services in a streamlined paperless environment. The Company focuses on technology has enabled it to operate efficiently and grow rapidly while maintaining quality control.
Qingke cooperates with third parties, including professional home service providers, e-commerce companies, and other service providers to facilitate a wide array of value-added services for tenants. These include broadband internet, utilities, and its recently-launched Qingke Select, a membership-based new retail platform. These initiatives cater to tenants’ lifestyle demand and help them live more conveniently and comfortably. This, in turn, helps improve brand loyalty and increase revenue per tenant. Qingke also cooperates with financial institutions to facilitate rental installment loans for tenants in need. Tenants can, but are not obligated to, apply for rental installment loans from the Company’s cooperative partners to prepay rental for certain lease periods and enjoy rental discounts during the lock-in period for the rental prepayment.