Produced by | Bullet Finance

Art Design | Qianqian

Reviewed by | Songwen

An A-share listed company with over RMB 3.8 billion in cash on hand and no interest-bearing liabilities is making a second attempt to list on the Hong Kong Stock Exchange this year.

A supplier whose client list includes nine of the world's top ten automotive companies has set a mere 12% performance growth target as its passing grade.

The undisputed champion in the concealed headlight sector, which has been selling increasingly expensive headlights, has consistently been unable to break through the 20% gross profit margin ceiling since 2024.

This company, embodying all these labels, is Changzhou Xingyu Automotive Lighting Systems Co., Ltd. (hereinafter referred to as 'Xingyu Shares').

Founded in 1993 as a school-run factory by Zhou Xiaoping, a former medical school teacher, the company now stands at a critical crossroads: its main business growth is gradually slowing, and its second growth curve has yet to materialize.

With two attempts at a Hong Kong IPO, will Xingyu Shares realize its 'listing dream' on the Hong Kong Stock Exchange?

1. The 'Headlight King' Conceals Growth Anxiety Behind Its Performance Targets

Since establishing the school-run factory in 1993, Zhou Xiaoping has deep cultivation (can be translated as 'delved deeply into') the headlight sector for over three decades.

Zhou Xiaoping, originally a medical school teacher, had her entrepreneurial journey and industry status detailed in an article by 'Business Frontline' titled 'Xingyu Shares' Performance Growth Fails to Halt Stock Price Decline; Family of Changzhou's Richest Woman Sees Net Worth Evaporate by Nearly RMB 13 Billion in Three Years.'

In 2021, Zhou Xiaoping became Changzhou's richest woman with a net worth of RMB 30.5 billion. However, the '2026 Hurun Global Self-Made Women Billionaires List' released in March this year shows her personal wealth at RMB 18 billion, ranking her second among Changzhou's female billionaires. She has been surpassed by Qian Peixin, co-founder of Hengli Hydraulics, whose wealth reached RMB 24.5 billion in 2026.

The foundation of Zhou Xiaoping's multi-billion-dollar fortune is a small headlight.

As a headlight supplier, Xingyu Shares boasts an impressive client list, including domestic brands such as FAW Hongqi, Seres, Geely, Li Auto, NIO, and XPeng, as well as international brands like BMW, Volkswagen, Toyota, Honda, and Bentley. It has established business relationships with nine of the world's top ten original equipment manufacturers.

According to Frost & Sullivan, by sales revenue in 2025, Xingyu Shares ranked first in China's overall automotive lighting market with an 11.6% market share and seventh globally with a 4.6% share.

However, these accolades cannot conceal the embarrassment of Xingyu Shares' slowing revenue growth.

From 2023 to 2025, the company's revenue grew from RMB 10.248 billion to RMB 15.257 billion, with the revenue growth rate plummeting from 29.3% in 2024 to 15.1% in 2025.

In the first quarter of 2026, its revenue reached RMB 3.430 billion, with the year-over-year growth rate further declining to 10.84%.

Clearly, while Xingyu Shares, the 'Headlight King,' has continuously expanded its revenue scale, the trend of slowing revenue growth is evident.

(Image / Prospectus)

Xingyu Shares may have detected this trend of slowing revenue growth early on. On May 26, the company disclosed the draft of its 2026 Employee Stock Ownership Plan. The incentive scheme selected revenue growth rate as the performance assessment metric, with growth calculated based on a fixed ratio using 2025 revenue as the baseline.

For 2026, Xingyu Shares set a dual-layer performance standard: a 12% year-over-year revenue increase would meet the minimum unlocking threshold; if the increase reached 15%, the current tranche could be fully unlocked.

(Image / Xingyu Shares Announcement)

What do these two assessment figures signify?

Over a longer period, the company's revenue growth rate was 15.1% in 2025, nearly identical to the 15% target set for 2026.

This means that if Xingyu Shares achieves a revenue growth rate in 2026 comparable to that of 2025, employees will receive full incentives; even if growth slows to 12%, partial unlocking will still occur.

For a leading headlight enterprise with annual revenue exceeding RMB 15.2 billion, the performance target is not about 'stretching to reach it' but simply maintaining growth.

External institutions clearly have higher expectations. In October 2025, Minsheng Securities predicted Xingyu Shares' revenue growth rate for 2026 at approximately 21.2%; in April 2026, Guosen Securities forecasted a 25.2% growth rate.

This inevitably raises questions from the outside world: Are the institutions overly optimistic, or is the company being overly conservative?

Whatever the answer, the 15% performance target reflects Xingyu Shares' judgment of its growth potential. This judgment finds clearer evidence in the gross profit margin data.

2. Struggling to Break Through the 20% Gross Profit Margin Ceiling, Urgently Needing a Second Growth Curve

Xingyu Shares' core products are automotive lighting products, including front headlights, rear headlights, other headlights, and controllers. Additionally, it sells 'other' products composed of raw materials, warning triangles, and other automotive components.

(Image / Prospectus)

From 2023 to the first quarter of 2026, automotive lighting products accounted for over 93% of Xingyu Shares' revenue. In 2025, they comprised 94.6% of revenue, and in the first quarter of 2026, the proportion reached as high as 96%.

(Image / Prospectus)

In recent years, Xingyu Shares has continuously promoted the high-end and intelligent transformation of its headlights. The proportion of intelligent automotive lighting products surged from 0.3% in 2023 to 16.9% in 2025 and reached 19.6% in the first quarter of 2026.

However, prices vary significantly across products applied to different vehicles. On the one hand, the average price of intelligent automotive headlights has consistently declined, dropping from RMB 4,141 per unit in 2023 to RMB 1,625.8 per unit in 2025. Meanwhile, the average price of non-intelligent automotive headlights has steadily increased, rising from RMB 136.6 per unit to RMB 200.9 per unit over the same period.

(Image / Prospectus)

Despite the price increases in traditional automotive headlights and the clear trend toward intelligent transformation, the gross profit margin has not shown significant growth.

In 2023, Xingyu Shares' gross profit margin was 20.5%, but from 2024 to the first quarter of 2026, it remained below 20%.

(Image / Prospectus)

The core reason for the lack of significant improvement in profitability is that the growth rate of raw material and manufacturing costs has outpaced revenue growth. In 2024, the company's cost of sales grew by 31.5%, exceeding the revenue growth rate of 29.3% for the same period, directly squeezing profit margins. Although cost growth slowed somewhat in 2025, the improvement was limited.

Given that over 90% of the company's revenue comes from the automotive lighting business, Xingyu Shares is fully committed to developing a second growth curve. In October 2025, the company established Changzhou Xingyu Intelligent Robot Co., Ltd., with Zhou Yuheng, the son of founder Zhou Xiaoping, serving as the legal representative.

Leveraging its optical capabilities accumulated in headlight production, the company is developing systematic optical solutions for robots in lighting, projection, and display sectors and has already delivered the first batch of test samples to partner clients.

It is reported that Xingyu Shares has also formed a deep strategic partnership with JAKA Robotics, completing the development and verification of robot heads and joint modules, and showcasing four categories of embodied intelligent products at the 2026 Beijing Auto Show.

However, the embodied intelligence business still has a long way to go before commercialization. As of the first quarter of 2026, Xingyu Shares' robot-related module business had not yet generated substantial revenue on a large scale. Transitioning from sample verification to mass production and stable profitability requires overcoming multiple hurdles, including customer certification, production ramp-up, and cost control.

Against the backdrop of the headlight business's revenue growth rate falling below 11%, the company's extension into the robotics sector based on its proprietary optical technology represents a medium- to long-term strategic reserve. However, market controversies persist regarding whether this embodied intelligence layout (can be translated as 'layout') is a proactive measure to address growth ceilings in the main business or merely a new valuation concept for the Hong Kong IPO.

In the capital market, investors need to see product landings that generate orders and sustainable revenue rather than robot concepts that remain at the exhibit and research sample stages.

3. Over RMB 1.6 Billion in Dividends Paid in Three and a Half Years: What Is the Necessity for Fundraising?

One of the core controversies surrounding Xingyu Shares' IPO is that the company is not short of cash.

As of the end of the first quarter of 2026, Xingyu Shares had RMB 2.109 billion in monetary funds (including cash equivalents and restricted bank deposits) and RMB 1.727 billion in trading financial assets, totaling approximately RMB 3.836 billion.

(Image / Prospectus)

As of the last practicable date (July 22, 2026), Xingyu Shares had no outstanding loans or borrowings and had not utilized working capital credit facilities.

This means the company not only lacks no cash but also has substantial funds on hand.

From 2023 to the first quarter of 2026, Xingyu Shares' net cash flow from operating activities remained positive, recording RMB 666 million, RMB 819 million, RMB 2.336 billion, and RMB 391 million, respectively, demonstrating robust and strong self-'hematopoietic' capabilities.

(Image / Prospectus)

While sufficient internal cash flow could support the company's capacity expansion and R&D investment, Xingyu Shares has chosen to distribute a portion of it as dividends to shareholders.

From 2023 to 2025, Xingyu Shares paid a total of RMB 1.136 billion in dividends; on April 10, 2026, shortly after its first Hong Kong Stock Exchange submission, the company declared an additional RMB 509 million in dividends, which were paid off the following month. Over three and a half years, the company has paid over RMB 1.64 billion in total dividends.

(Image / Prospectus)

The Zhou Xiaoping family, as the actual controllers of Xingyu Shares, naturally stands as the largest beneficiary. Before the IPO, Zhou Xiaoping directly and indirectly held a combined 48.19% stake, while her mother, Sun E'xiao, held 6.11%, giving the mother-daughter duo control over 54.3% of the company's equity. Based on this ownership ratio, the mother-daughter pair received approximately RMB 276 million from the April 2026 dividend alone.

On the one hand, the company continues to pay out substantial dividends; on the other hand, it proceeds with a Hong Kong IPO for fundraising, creating a stark contradiction that continues to spark market controversy.

Additionally, the company's planned fundraising for capacity expansion has also drawn significant attention. The prospectus reveals that Xingyu Shares' domestic front headlight capacity utilization rate dropped from 86.3% in 2024 to 69.7% in the first quarter of 2026, while rear headlight utilization fell from 95.6% to 68.6%, leaving over 30% of capacity temporarily idle.

Under these circumstances, the company's push for overseas capacity expansion essentially represents a bet on future market absorption capacity.

(Image / Prospectus)

With over RMB 3.8 billion in cash on hand, no bank borrowings, ample cash flow, and idle capacity, yet proceeding with capacity expansion, the necessity of Xingyu Shares' Hong Kong IPO fundraising under these fundamentals indeed warrants scrutiny.

In fact, Xingyu Shares' attempt to create an 'A+H' dual-listing platform involves more than just the capital operation logic of 'dividend cashing out in A-shares and fundraising in Hong Kong shares.' The deeper driving force may lie in the strategic value of the dual-listing platform itself—a Hong Kong listing would provide Xingyu Shares with international capital access, facilitate cross-border mergers and acquisitions, and serve as a brand endorsement for its global narrative.

With Xingyu Shares' domestic capacity utilization rate having fallen below 70%, its Serbian factory still ramping up production, and its embodied intelligence business yet to generate substantial revenue, the Hong Kong fundraising appears more like a 'preemptive positioning' capital layout (can be translated as 'layout') rather than a pragmatic choice based on current funding gaps.

Xingyu Shares has achieved the top position in the headlight industry over 30 years, binding itself to global top-tier automotive companies. Its industrial status and operational capabilities are undeniable; however, in the capital market, the company continues to face skepticism. Moving forward, whether the company can successfully list on the Hong Kong Stock Exchange is something 'Bullet Finance' will continue to monitor.

*The featured image in the article is from Shutterstock, based on the VRF protocol.