When asked which Chinese technology companies investors should invest in, analysts will often mention names like Alibaba Group or Tencent.

But lesser-known tech giants should make it onto your watch list as well. KE Holdings (BEKE 3.94%), or "Beike," is one of those candidates.

Beike is the leading player in a massive industry

There are a few major e-commerce platforms in China that investors are familiar with, such as Taobao and Tmall from Alibaba, Pinduoduo, and JD.com. But there is another one that most investors have not heard of: Beike from KE Holdings.

First, let's get a bit of the naming confusion out of the way. KE Holdings owns two major businesses: Lianjia and Beike. Lianjia is a real estate agent that helps homeowners rent or sell their properties and customers find their dream homes. Think of it as "the Redfin of China." Beike is the platform that helps match customers to estate agents (including Lianjia). Think of this as "the Zillow of China."

Although there are distinctions between what these businesses under KE Holdings do, investors often refer to the collective business as just "Beike." For the sake of simplicity, I'll be referring to the company as such from here on out.

Founded as a real estate agent (Lianjia), Beike has become an ever more dominant player in the Chinese real estate industry. Today, it has 394,000 active agents, 267 million homes in its database, 40,500 stores, and roughly 37 million mobile monthly active users (MAU) using its Beike platform.

More importantly, Beike enables a large share of all real estate transactions in China. In the fourth quarter of 2022, the gross transaction value (GTV) of all Chinese existing and new home sales was around 3.1 trillion yuan  ($450 billion). Out of this, Beike accounted for 647 billion yuan ($94 billion) or 21%.

With its dominant position, Beike benefits from a virtual cycle of growing customers, agents, and property listings. After all, customers will go to the platform with the most property listings, while agents will go to where customers are. Thus, there are good reasons to expect Beike to grow its market share over time.

But that's not all. Beike can also leverage the leading position of its Beike platform to expand into adjacent sectors.

Beike is quietly expanding this new vertical

Last year, Beike acquired Shengdu Home Renovation, doubling its investment in the up-and-coming home renovation and furnishing industry.

Such a move was necessary as the Chinese property market faces headwinds, evident in Beike's 2022 performance -- GTV of existing and new home transactions fell by 23% and 42%, respectively. Moreover, as the Chinese population becomes wealthier, they will naturally spend more on improving their homes, which will benefit the home renovation and furnishing sector.

By acquiring Shendu, the leader in this industry, the tech company could shorten its learning curve while gaining various cost and revenue synergies. For instance, it could leverage its user base and reputation to help Shendu grow faster while removing cost duplication from the combined entity.

While it's still early, Shendu's acquisition has already led to a massive surge in home renovation revenue from 197 million yuan in 2021 to 5 billion yuan ($0.7 billion) in 2022. Over time, Beike could leverage its own experience in building a real estate platform -- and combine that with the understanding gained from operating Shendu -- to launch a home renovation and furnishing platform.

If successful, this latest move will open up an entirely new (and growing) revenue stream for the company.

Why should investors bother?

Chinese stocks have faced plenty of challenges over the last two years amid issues like the tech crackdown in China, the intense COVID-19 lockdown policy, and the increasingly hostile relationship between the Chinese and U.S. governments.

While these issues are real, many Chinese stocks have lost more than 50% of their market capitalization during this period, making them attractive for bargain hunters looking for high-quality companies for cheap.

Beike, with its leading position in the property market in China and its growth potential, might be one of those companies worth paying attention to.