Xingyu Co.,Ltd(SH:601799) Soochow Securities·2025-07-18 05:26Investment Rating - The report recommends investing in the leading domestic automotive lighting company, Xingyu Co., Ltd. [2] Core Insights - The current domestic automotive lighting industry is characterized by a "dual leader" competitive landscape, with market share expected to continue concentrating towards leading companies. The industry has high entry barriers due to customer resources, technological research and development, cost control, and quality certification. [3][10] - The report highlights the evolution of the domestic automotive lighting market over the past decade, noting the decline of Japanese companies, the stability of European firms, and the rise of domestic leaders. [3][10] - The report predicts that the market share will further concentrate among leading companies due to ongoing technological upgrades in the automotive lighting sector. [14] Summary by Sections Domestic Market Structure - The domestic automotive lighting market currently exhibits a "two super, many strong" competitive structure, with Xingyu and Huayu Vision leading in market share. [3][10] - The market concentration is high, with the CR3 at 45% and CR5 at 61% as of 2021, indicating that the majority of market share is held by top companies. [13] Competitive Landscape - Japanese companies, represented by Koito and Stanley, have shown a significant decline in the Chinese market over the past decade, with Koito's revenue in China dropping to 583 billion yen in 2024. [27][36] - European companies like Valeo and Hella have maintained stable growth in the domestic market, with Valeo's lighting division revenue increasing from 4.185 billion euros in 2015 to 5.554 billion euros in 2024. [68][74] - Domestic companies, particularly Xingyu, have shown strong growth, with projected revenues surpassing Huayu Vision in 2024. [3][10] Technological Upgrades - The automotive lighting sector is undergoing continuous upgrades in technology, including advancements in light source technology, smart features, and structural design. [14][15] - The report emphasizes that the trend towards smart lighting technologies will require significant research and development investments, which may disadvantage smaller companies. [14] Financial Projections - The report forecasts Xingyu's net profit for 2025-2027 to be 1.761 billion, 2.189 billion, and 2.683 billion yuan, respectively, with corresponding price-to-earnings ratios of 20x, 16x, and 13x. [3]