Fangdd Network Group Ltd. (DUO): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Fangdd Network Group Ltd. (DUO), a Chinese proptech company, and what's really driving its near-term risks and opportunities. The core takeaway is this: DUO is navigating a brutal real estate market by pivoting its tech platform, evidenced by a 45.3% H1 2025 revenue jump, but profitability is still a major issue with a RMB39.2 million net loss. We need to map the external forces-the PESTLE-to these financial realities to see if that revenue growth is sustainable.

Political Factors: Stimulus vs. Geopolitical Risk

Government policy is a double-edged sword for Fangdd Network Group Ltd., offering stimulus that boosts transaction volume but also creating geopolitical uncertainty that affects investor sentiment. The central government is defintely trying to stabilize the property market, which is good news for DUO's transaction volume. That 'moderately loose' monetary policy for 2025 means more credit is available, helping transactions close, which is reflected in the H1 2025 revenue growth.

But, honestly, ongoing geopolitical tensions are still the wild card; they can spook investors and hit the stock price overnight. Policy is the only thing keeping this market afloat right now. DUO needs to build a scenario plan for a sudden tightening of US-China relations.

Economic Factors: Growth at a Cost

While Fangdd Network Group Ltd. saw a massive revenue surge, the underlying economics show a significant profitability challenge that overshadows the growth. Here's the quick math: Revenue is up 45.3% to RMB203.4 million (US$28.4 million), and Gross Merchandise Volume (GMV)-the total value of transactions-grew 27.3% to RMB8.0 billion in H1 2025. That's great volume, but the net loss of RMB39.2 million in the first half of 2025 tells you the cost structure needs serious optimization.

You can't lose money on every sale and make it up on volume. The real estate sector remains highly volatile, so management must prioritize cost of revenue reduction to lift the current 9.1% gross margin. Growth without profit is just a hobby.

Sociological Factors: The Demand for Transparency

Fangdd Network Group Ltd. must adapt its platform to address the growing public demand for transparency and Environmental, Social, and Governance (ESG) factors, even as consumer confidence remains low. Think about this: over 60% of Chinese household wealth is tied up in property. That's a huge psychological factor.

People are nervous, so they demand more transparency and efficiency from platforms like DUO in complex property transactions. Plus, the shift toward 'green and ethical products' is real; you need to show how your platform helps agents meet these new ESG expectations. The consumer is scared, and they want answers. DUO should integrate a simple, agent-facing ESG scoring tool into the Software-as-a-Service (SaaS) platform.

Technological Factors: The SaaS Edge and the Upgrade Race

Fangdd Network Group Ltd.'s core strength is its proprietary SaaS-based platform, but continuous investment in Artificial Intelligence (AI) and digital twin technology is crucial to maintain a competitive edge. DUO's business model hinges on its SaaS platform for agents. They are using AI, big data, and cloud computing to offer modular solutions-basically, plug-and-play tools for agents.

But the industry is moving fast, especially with digital twin technology (a virtual replica of a physical asset) and predictive analytics for property management. If they don't keep upgrading, they'll fall behind the market leaders. Technology is the product, not just the tool. The company should allocate a minimum of 15% of H2 2025 operating expenses to Research & Development (R&D) for AI-driven predictive analytics.

Legal Factors: Compliance and Listing Pressure

Fangdd Network Group Ltd. faces immediate compliance risks related to its Nasdaq listing and new tax reporting rules, alongside the longer-term mandate for ESG disclosures. The most immediate risk is the Nasdaq minimum bid price non-compliance. DUO needs a sustained price above US$1.00 or they face delisting-that's a huge overhang.

Also, the new digital platform tax reporting rules from June 2025 mean quarterly user revenue disclosure is required, which adds a compliance burden. Still, relaxed Foreign Exchange (FX) rules from September 2025 could help by making it easier for overseas buyers, potentially boosting GMV. Compliance is non-negotiable, especially when listed in the US. The Legal team must finalize the plan to regain Nasdaq compliance by Q1 2026.

Environmental Factors: The 2025 Data Mandate

The national focus on 'Green and low-carbon development' is quickly translating into mandatory reporting and platform requirements for Fangdd Network Group Ltd., starting with 2025 data. This isn't a distant threat; mandatory ESG (Environmental, Social, and Governance) reporting for large listed companies begins in 2026, using your 2025 data.

So, you need to be tracking your building ecological footprints now. PropTech platforms like DUO must integrate tools to help agents and developers comply with this 'Green and low-carbon development' push. If onboarding takes 14+ days to get this data, churn risk rises. The environmental mandate is now a data problem. Appoint a dedicated ESG task force to gather 2025 operational data for the 2026 mandatory disclosure.

Finance: Draft a 13-week cash view by Friday, focusing on the cost of revenue to address the RMB39.2 million net loss.

Fangdd Network Group Ltd. (DUO) - PESTLE Analysis: Political factors

Supportive government policies drove H1 2025 revenue growth.

You can defintely see the immediate impact of government intervention in Fangdd Network Group Ltd.'s H1 2025 results. The supportive policies aimed at stabilizing the real estate sector provided a necessary tailwind, helping the company post a significant revenue increase even as the broader market faced headwinds.

Here's the quick math: Revenue for the first half of 2025 surged by 45.3% year-over-year, reaching RMB203.4 million (US$28.4 million). This growth was a direct result of improved market sentiment and the company's focus on core projects, which boosted total closed-loop Gross Merchandise Value (GMV) by 27.3% to RMB8.0 billion. Still, the political environment remains volatile; the net result for H1 2025 was a net loss of RMB39.2 million, a swing from a net income of RMB16.4 million in H1 2024.

Central government is planning new stimulus to stabilize the property market.

The central government is clearly worried about the financial system, so they are planning a more aggressive stimulus package. The property crisis has created systemic risks, with non-performing loans in Chinese banks surging to a record high of 3.5 trillion yuan (US$492 billion) by the end of September 2025.

Policymakers are now considering a slew of new measures, moving beyond previous incremental steps. This new wave of support, if implemented, would directly benefit Fangdd Network Group Ltd. by stimulating transaction volume. The proposed measures include:

• Nationwide mortgage subsidies for first-time homebuyers.
• Raising income tax rebates for existing mortgage borrowers.
• Lowering home transaction costs (taxes and fees).

What this estimate hides is the uncertainty; the timing and specific details of these policies are still under discussion as of November 2025.

'Moderately loose' monetary policy for 2025 encourages credit supply.

The People's Bank of China (PBOC) has shifted its stance to a 'moderately loose' monetary policy for 2025, which is a significant change after 14 years of a 'prudent' approach. This shift is intended to inject liquidity and lower financing costs, which is critical for the real estate sector's recovery and, by extension, Fangdd Network Group Ltd.'s transaction volume.

The PBOC is maintaining sufficient liquidity and using a mix of monetary tools. For example, the one-year Loan Prime Rate (LPR)-a key reference for corporate and household loans-was maintained at 3.0% in November 2025, and the five-year LPR, which is the reference for most mortgages, was held at 3.5%. This stability, plus the prospect of further interest rate or Reserve Requirement Ratio (RRR) cuts, encourages banks to extend credit, which is the lifeblood of property transactions.

The continued low-rate environment is a political commitment to economic stability. It helps, but consumer confidence is still the main variable.

Ongoing geopolitical tensions create an unpredictable operating backdrop.

While Fangdd Network Group Ltd. operates primarily in the domestic Chinese real estate market, the ongoing geopolitical tensions, particularly the US-China rivalry, create an unpredictable operating backdrop that impacts its valuation and access to capital. The push for 'decoupling' or 'derisking' from China affects investor sentiment toward all US-listed Chinese companies (American Depositary Shares or ADS).

The company's listing on NASDAQ makes it vulnerable to regulatory and political noise. To be fair, Fangdd Network Group Ltd. already had to execute a 16:1 share consolidation in June 2025 to comply with NASDAQ's minimum bid price requirement, which shows the pressure from US capital markets. The broader risk is a potential increase in trade wars and the battle for AI supremacy, which could lead to supply chain disruptions and higher costs for the technology assets the company relies on, including the US$34.32 million AI technology assets acquisition announced in 2025.

The political climate means US investors are cautious, and that lack of confidence translates directly to a lower valuation multiple for a Chinese property-tech company.

Fangdd Network Group Ltd. (DUO) - PESTLE Analysis: Economic factors

The economic picture for Fangdd Network Group Ltd. (DUO) in the first half of 2025 is a classic mixed bag: strong top-line growth but a significant and concerning swing back to unprofitability. You saw the revenue surge, which is great, but the net loss tells the real story about the underlying cost and margin pressures in the Chinese property technology (PropTech) sector. This is defintely a high-risk, high-reward environment.

H1 2025 Revenue surged 45.3% to RMB203.4 million (US$28.4 million)

Fangdd Network Group's revenue growth in the first half of 2025 was robust, increasing by 45.3% to RMB203.4 million (US$28.4 million). This jump shows the company's strategic focus on core projects and deeper cooperation with reputable developers is paying off in terms of market penetration and transaction volume. The growth is directly tied to a recovering, albeit fragile, real estate market that saw supportive government policies start to take hold. Still, you have to look past the top-line number.

Here's the quick math on the half-year performance:

Company swung to a significant H1 2025 Net Loss of RMB39.2 million.

Despite the strong revenue, the company swung to a net loss of RMB39.2 million (US$5.5 million) in H1 2025, a sharp reversal from the net income of RMB16.4 million reported in H1 2024. This is the critical piece of the economic analysis. The revenue growth is not trickling down to the bottom line, which signals significant operational or cost-of-revenue issues. The gross margin decline to just 9.1% from 12.5% is a major contributor, primarily due to a lower contribution from higher-margin value-added services.

The cost side is also a factor. Operating expenses increased by 4.8% to RMB90.2 million, driven by a massive surge in sales and marketing spend-up 651% year-over-year according to reports-to capture market share in a competitive environment. You're spending a lot more to earn each dollar, and that's an unsustainable path without a quick shift in the revenue mix.

Total closed-loop GMV grew 27.3% to RMB8.0 billion in H1 2025.

The total closed-loop Gross Merchandise Value (GMV), which represents the value of property transactions facilitated on the platform, grew by 27.3% to RMB8.0 billion (US$1.1 billion) in the first half of 2025. This GMV growth is a positive indicator of the platform's utility and market acceptance, especially in new and core projects. It shows the platform is successfully driving transactions, which is its core business model.

The challenge is converting that high-volume GMV into high-margin revenue. The drop in gross margin suggests that the transactions driving this RMB8.0 billion GMV are increasingly low-margin, likely from new property sales where commission rates are thin, rather than higher-margin value-added services like financial or data services.

Real estate sector remains highly volatile with general market headwinds.

The broader economic environment in China's real estate sector continues to present significant headwinds (macro-environmental factors). While government policy support has helped stabilize the market, it is still in a period of 'ongoing adjustments.' For a PropTech company like Fangdd Network Group, this volatility translates directly into risk.

• Sales area of new property in China decreased by 3.5% year-over-year in H1 2025.
• Sales revenue of new property dropped by 5.5% year-over-year in H1 2025.
• The company's cash and cash equivalents were RMB188.1 million (US$26.3 million) as of June 30, 2025, which provides some cushion but limits aggressive investment given the net loss.
• The overall economic slowdown and continued developer debt issues create an atmosphere of caution, which can slow down transaction velocity and depress commission rates.

What this estimate hides is the potential for a rapid policy shift or a major developer default, either of which could instantly freeze the market and crush transaction volume. Your action here is to monitor policy changes and liquidity metrics for major Chinese developers, not just DUO's financials.

Fangdd Network Group Ltd. (DUO) - PESTLE Analysis: Social factors

Over 60% of Chinese household wealth is tied up in the property market.

The sheer concentration of wealth in real estate is the single biggest social factor influencing the Chinese property market and, by extension, Fangdd Network Group Ltd. (DUO)'s operating environment. Real estate accounts for a staggering 70% of gross household wealth in China, which is nearly twice the share for U.S. households. This means any decline in housing prices creates a massive negative wealth effect, directly curbing consumer spending and confidence across the entire economy.

This exposure is why the property slump is the primary drag on domestic consumption. When your primary asset loses value, you stop spending on everything else. The decline is visible in the per-capita net property income, which only saw a 2.2% year-on-year increase in 2024, the lowest growth rate since 2014. That's a serious headwind for any transaction-based business like DUO.

Growing demand for transparency and efficiency in complex property transactions.

The prolonged crisis has fundamentally changed what buyers expect. They are no longer willing to accept the old, opaque ways of doing business, especially with pre-sale risks in the new home market. Consumers are demanding clear, trustworthy, trackable, and measurable information across the entire property lifecycle.

This shift is a direct opportunity for technology platforms. The government is also pushing for higher quality, with new national standards for 'quality homes' coming into effect in May 2025, covering seven aspects like a minimum ceiling height of three meters and mandatory elevators in four-plus story buildings. This focus on quality and verifiable standards plays directly into DUO's platform model, which can standardize and digitize complex transaction data, offering the transparency buyers crave.

• Digitize contracts to reduce fraud risk.
• Standardize property listings to ensure accuracy.
• Provide clear, trackable transaction histories.
• Facilitate a shift toward the second-hand market, which saw sales surge 44% year-on-year in Shanghai during the May Day holiday in 2025.

Shifting consumer preference toward 'green and ethical products' (ESG factors).

The focus on Environmental, Social, and Governance (ESG) is moving beyond just investors and into consumer preference, even in real estate. In 2025, more Chinese consumers are actively choosing green and ethical products. For many, sustainability signals premium quality and better health benefits.

For the property sector, this translates to a preference for energy-efficient homes, better air quality, and sustainable community planning. Over 60% of Chinese consumers consider resource conservation and waste reduction as the core of sustainable consumption. DUO's platform needs to integrate and highlight ESG-related property data-like energy efficiency ratings or proximity to green transit-to capture this growing segment of the market. Honestly, if you don't have an ESG filter on your listings by 2026, you're missing a key buyer segment.

Subdued consumer confidence in the property market despite easing measures.

Despite a flurry of government support measures in 2025-including relaxed purchase limits in first-tier cities like Beijing, Shanghai, and Shenzhen, plus cuts to mortgage rates and lower down payments-consumer confidence remains deeply subdued. The housing market slump has crashed household sentiment, with the Consumer Confidence Index dropping to 87.9 in June 2025, perilously close to the November 2022 all-time low of 85.5.

This lack of confidence is reflected in falling prices and transaction volumes across most of the country. New home sales (in unit terms) slid a hefty 20.8% year-on-year in October 2025. While Shanghai remains an outlier with a 5.7% year-on-year rise in new home prices in October 2025, the overall national trend is a decline. The market is highly polarized, with first-tier cities showing selective growth while third- and fourth-tier cities mainly contract.

Here's the quick math on the price pressure:

This environment means DUO must focus on the resilient segments: the second-hand market in key cities and the demand for high-quality, transparent listings, as these are the only areas showing defintely positive structural momentum.

Fangdd Network Group Ltd. (DUO) - PESTLE Analysis: Technological factors

Core business relies on a proprietary SaaS-based platform for agents.

You need to understand that Fangdd Network Group Ltd.'s entire business model is asset-light and hinges on its proprietary Software-as-a-Service (SaaS) platform to digitize the real estate transaction process. This isn't a simple listing site; it's a full-stack solution for real estate agents. The core platforms, like Property Cloud for sellers and Duoduo Sales/Duoduo Cloud Sales for agents, connect the entire ecosystem-listings, customers, capital, and transaction data. The health of the technology is defintely the health of the company.

The platform's effectiveness is best measured by agent activity, and while agent numbers for 2025 are not disclosed, the platform's utility drove a significant increase in transaction volume. For the first half of 2025 (H1 2025), the total closed-loop Gross Merchandise Value (GMV) facilitated on the platform grew by 27.3% year-over-year, reaching RMB8.0 billion (approximately US$1.1 billion). That's a clear signal that agents are using the tools to close deals.

Leveraging AI, big data, and cloud computing to power modular solutions.

The company's strategy is to push beyond basic digitalization by integrating advanced technologies like Artificial Intelligence (AI), big data analytics, and cloud computing into its modular products. This is not just marketing fluff; there are concrete, near-term investments proving this focus. In a major move to bolster its technological capabilities, Fangdd Network Group entered into an agreement on September 30, 2025, to acquire certain AI technology assets for US$34,320,000.

Here's the quick math on their technology commitment: this single AI asset acquisition is roughly ten times the company's entire Research and Development (R&D) expense of $3,394 thousand for the full fiscal year 2024. This acquisition, coupled with their existing cloud technology patents-which had an earnout structure tied to 2025 revenue-shows a clear, aggressive pivot to a technology-enabled real estate management business.

Industry shift toward digital twin technology and predictive analytics for property management.

The competitive landscape is shifting fast toward hyper-realistic, data-driven property management tools. The next big wave is Digital Twin technology-a virtual replica of a physical asset, fed by real-time data from Internet of Things (IoT) sensors. This allows for predictive maintenance and real-time performance optimization. For example, analysts project that digital twin adoption in the GCC region will grow by 40% annually until 2030.

This trend presents both a risk and an opportunity. While Fangdd Network Group's US$34.32 million AI asset acquisition clearly positions them for advanced predictive analytics-which can optimize pricing and model financial returns-the direct integration of digital twin technology for property management is the next hurdle. They are strong in transaction services, but the industry is moving toward asset lifecycle management.

• Monitor the market: Nearly 40% of property developers in a tech-forward market like Dubai are expected to integrate digital twins with blockchain in 2025.
• Focus on the data: AI algorithms now predict asset depreciation and optimize rental pricing in real time, a capability Fangdd must fully embed.

Need for continuous platform upgrades to stay competitive against market leaders.

The core challenge is that Fangdd Network Group Ltd. operates in a highly competitive market, significantly trailing market leaders like KE Holdings. Their platform must not only function but also offer a compelling, differentiated value proposition to agents. The acquisitions are a good start, but they must translate into immediate, tangible product features.

The platform's gross margin declined to 9.1% in H1 2025, down from 12.5% year-over-year, largely due to lower contributions from higher-margin value-added services. This is a crucial signal: agents are using the basic platform, but they are not yet fully adopting the premium, higher-margin services. This suggests the value-added features-the result of past R&D-are not yet sticky enough. The new AI assets must be quickly deployed to enhance these value-added services, making them indispensable for agents to justify the cost and reverse the margin decline.

Fangdd Network Group Ltd. (DUO) - PESTLE Analysis: Legal factors

New digital platform tax reporting rules (June 2025) require quarterly user revenue disclosure.

You need to be ready for the new level of tax scrutiny coming from Beijing. The Chinese State Council's Order No. 810, which became effective on June 20, 2025, fundamentally changes compliance for technology platforms like Fangdd Network Group Ltd. (DUO). This isn't a suggestion; it's a mandate.

The core change requires DUO to submit quarterly reports to the State Taxation Administration (STA) detailing the identity and income of its platform users, including agents and merchants. The first of these quarterly reports, covering the third quarter of 2025, was due by October 31, 2025. This means DUO must now invest heavily in data verification and reporting infrastructure to avoid significant fines, which can range up to RMB 500,000 (approximately US$70,000) for serious violations, plus potential business suspension. It's a major operational shift from self-declaration to platform-enabled tax enforcement.

• Collect and verify user tax information.
• Report user identity and income quarterly.
• First report deadline: October 31, 2025.
• Failure risks RMB 500,000 fine and suspension.

Nasdaq minimum bid price non-compliance issue requires a sustained price above US$1.00.

Honesty, this was a near-term existential threat to DUO's listing, but they navigated it. The company received a formal deficiency notice from Nasdaq on December 24, 2024, because its Class A ordinary shares had closed below the required US$1.00 minimum bid price for 30 consecutive business days. This is a common risk for smaller-cap Chinese companies listed in the U.S.

DUO was given 180 calendar days, until June 23, 2025, to regain compliance. To solve this, the company executed a 1-for-16 reverse stock split on June 9, 2025, which immediately boosted the per-share price. They successfully regained compliance on June 24, 2025. As of mid-July 2025, the stock was trading around $2.23 per share, which is a comfortable buffer. Still, the underlying business fundamentals must improve to keep the price up; a reverse split is a tactical fix, not a strategic one.

Relaxed Foreign Exchange (FX) rules (September 2025) facilitate property buying for overseas individuals.

This is a clear opportunity for DUO, especially if they can effectively market to overseas buyers. Effective September 15, 2025, the State Administration of Foreign Exchange (SAFE) implemented new rules that significantly ease the process for overseas individuals to purchase property in China. This is a direct government effort to stabilize the property sector by injecting foreign capital.

The key change is the removal of the old 'payment dilemma': overseas buyers can now use converted foreign currency for down payments immediately after signing a purchase contract, instead of waiting for the property registration certificate. Plus, SAFE scrapped the restriction that prohibited using capital account foreign exchange income to purchase non-self-use residential property. This opens up the investment property market to foreign capital, which could drive demand for luxury and investment-grade listings on DUO's platform, defintely in first-tier cities.

China Securities Regulatory Commission (CSRC) is pushing for mandatory ESG disclosures starting in 2026.

The regulatory tide is moving toward mandatory Environmental, Social, and Governance (ESG) reporting, and DUO needs to prepare its data now. The China Securities Regulatory Commission (CSRC) has been steadily building a framework, with mandatory disclosures set to begin in 2026 for a large number of listed companies, including those listed both domestically and overseas.

The CSRC's Administrative Measures for Information Disclosure by Listed Companies were amended in March 2025 to pave the way for this. While the full mandatory scope targets companies on key indices (like the SSE 180), the trend is clear: all listed companies are expected to adopt sustainability reporting. For a tech-focused platform like DUO, this means formalizing disclosures around data privacy, agent welfare (social), and corporate governance, moving beyond the voluntary reports many firms currently file. You should start mapping your value chain boundaries and identifying key sustainability risks right away.

Fangdd Network Group Ltd. (DUO) - PESTLE Analysis: Environmental factors

National push for 'Green and low-carbon development' and a circular economy.

The environmental landscape in China is no longer a peripheral concern; it is a central pillar of national policy, which creates both a compliance challenge and a massive opportunity for a PropTech company like Fangdd Network Group Ltd. (DUO). The government's core strategy is to accelerate the 'green transition in all areas of economic and social development,' targeting carbon peak before 2030 and carbon neutrality by 2060.

This push directly impacts the real estate sector, which is a significant contributor to national carbon emissions. The 2025 government work report emphasized the need to speed up the provision of 'eco-friendly' and 'smart' housing. This means the entire property value chain, from construction materials to brokerage platforms, must align with low-carbon standards. China is aiming to reduce its energy intensity-energy consumption per unit of GDP-by 3% in 2025. That's a clear signal: efficiency is now a mandatory performance metric, not a suggestion.

PropTech platforms must integrate tools to track building ecological footprints.

The national mandate for low-carbon development translates into a critical requirement for PropTech platforms like Fangdd: you must provide the tools for carbon accounting. The market is already moving this way, with global PropTech market growth projected to hit an 11.9% Compound Annual Growth Rate (CAGR) by 2032, driven by sustainability requirements. China's PropTech market itself is expected to grow at a 19.85% CAGR from 2025 to 2035, reaching a projected valuation of $25.8 billion.

For Fangdd, this is a clear product development path. The platform needs to move beyond simple transaction services and integrate carbon-tracking features for the properties it lists and manages. This includes:

• Calculate a property's energy consumption per square meter.
• Provide a building's estimated lifecycle carbon footprint (CF).
• Offer certified green building listings and filter options.
• Integrate with smart home IoT for real-time energy monitoring.

Honestly, if you don't offer a 'Green Score' for a property by the end of 2025, you're defintely missing a key competitive differentiator.

Mandatory ESG reporting for large listed companies begins in 2026, based on 2025 data.

This is the most immediate and concrete risk factor. China's three major stock exchanges (Shanghai, Shenzhen, and Beijing) have mandated that large-cap and dual-listed firms must publish their first comprehensive sustainability reports covering the 2025 financial year by April 30, 2026. This initially affects approximately 400 large companies, and while Fangdd Network Group Ltd. (DUO) is US-listed, the pressure to conform to these emerging Chinese Sustainability Disclosure Standards (CSDS) for its mainland operations is immense, especially given its dual-listed status in the US.

The new standards align closely with international frameworks like the IFRS S2 climate reporting, demanding verifiable data on governance, social, and environmental impact. For Fangdd, this means quantifying its own operational footprint, but more importantly, documenting how its platform facilitates or hinders the environmental performance of the broader real estate ecosystem.

Here's the quick math on Fangdd's need for compliance infrastructure, based on H1 2025 data:

Risk of stricter environmental impact assessments on new development projects.

The regulatory environment for new construction is getting tighter, which directly affects the inventory Fangdd's agents sell. The Ministry of Ecology and Environment (MEE) is reinforcing stricter Environmental Impact Assessments (EIAs), and while recent circulars focus on heavy industry, the principle of stringent 'ecological and environmental entry requirements' for all construction projects is firm.

What this means practically is a higher barrier to entry for developers, leading to a potential slowdown in new, non-compliant inventory. Any new development project that fails its EIA-or is located in a region where pollutant emissions exceed quotas-will face a suspension of its approval process. This risk requires Fangdd to perform more rigorous due diligence (environmental due diligence) on the new development projects it onboards to its platform.

Actionable Insight:

• Vet Developer Partners: Prioritize developers with a high ESG rating or a track record of green building certifications.
• Flag High-Risk Inventory: Develop a system to flag new properties that do not possess a verified green building certificate, as these face higher regulatory and market risk.

The cost of non-compliance for developers-and the resulting market risk for Fangdd-is simply too high to ignore.