Core Viewpoints - The domestic automotive lighting industry currently presents a "dual leading" competitive landscape, with market share expected to continue concentrating towards leading companies. The high entry barriers in the industry include customer resources, technology research and development, cost control, and quality certification, which shape a favorable competitive environment for the industry. Leading companies like Xingyu and Huayu Vision dominate the market, while foreign players such as Hella, Valeo, Marelli, Koito, and Stanley also hold significant market shares. Future technological upgrades in the lighting sector will further concentrate market share among leading enterprises, potentially sidelining smaller lighting companies [2][7][14]. Industry Overview - A ten-year review of the Chinese automotive lighting landscape shows a significant decline in Japanese manufacturers, overall stability in European manufacturers, and the continuous rise of domestic leaders. Japanese companies like Koito and Stanley have faced declining revenues and profits in the Chinese market, particularly Koito, which has seen its operating profit margin turn negative in recent years. In contrast, European manufacturers like Valeo and Hella have maintained stable growth and profitability, with ongoing expansion efforts in China. Domestic leader Xingyu has consistently grown since its IPO, surpassing Huayu Vision in revenue in 2024, while Huayu Vision has experienced a decline due to the downturn of joint venture brands within the SAIC system [3][4][6][7]. Competitive Analysis - Xingyu's competitive advantages are evident in revenue, profitability, expansion, and research and development. In 2024, Xingyu's revenue is expected to surpass Huayu Vision, and its profitability is significantly higher than both domestic and foreign competitors. Xingyu maintains a steady expansion pace and invests heavily in R&D, solidifying its technological strength and leading experience in mass production of high-end lighting projects [4][6][7]. Investment Recommendations - The recommendation is to invest in the domestic automotive lighting leader, Xingyu Co., Ltd. The rationale includes: 1. Market potential: The automotive lighting sector is characterized by continuous iteration and upgrade capabilities, with ongoing smart upgrades driving ASP and industry growth. 2. Competitive landscape: High entry barriers have led to an excellent competitive environment, with Xingyu's industry position continuously improving over the past few years. 3. Customer base: The company has deep partnerships with leading clients in the new energy and automotive sectors, which positions it to benefit from the ongoing concentration of the passenger vehicle industry [5][6][7]. Financial Forecast - The forecast for Xingyu's net profit attributable to shareholders for 2025-2027 is projected to be 1.761 billion, 2.189 billion, and 2.683 billion yuan, respectively, corresponding to P/E ratios of 20x, 16x, and 13x [6][7].

Core Insights - The Chinese lighting industry has achieved significant technological breakthroughs, particularly in areas such as new energy vehicles, smart driving, and health lighting, marking a milestone in core technology development and application transformation [1][2]. Group 1: Technological Achievements - Multiple major technological achievements have been recognized, including the development of a multi-stage rotating control and waterproof technology by YD Group, enhancing product adaptability and user experience [2]. - The smart lighting system for intelligent driving developed by Changzhou Xingyu Car Lights opens new dimensions for safety and human-vehicle interaction [2]. - Research from Xiamen University of Technology on high-performance full-color quantum dot LED technology addresses core material challenges, while a multi-dimensional classroom environment intelligent system promotes eye health for youth [2]. - Fudan University’s research focuses on visual environment and biological rhythm health for middle and primary school students, contributing to vision protection [2]. - Shanghai University of Applied Sciences has created new rare earth luminescent materials for human-centric lighting, establishing a solid foundation for high-performance materials [2]. - The adjustable, high-efficiency automotive lights developed by Damo Weirike target the urgent needs of intelligent and energy-saving new energy vehicles [2]. Group 2: Industry Development and Future Directions - The technology achievement appraisal is a key process for evaluating innovation, advancement, and maturity, and is a focus of the China Light Industry Federation to promote industry innovation [3]. - The China Lighting Electrical Association plays a crucial role as a national industry organization, ensuring rigorous and standardized appraisal processes [3]. - The lighting industry has entered a new era driven by innovation, with plans to strengthen collaboration with the China Light Industry Federation to enhance technology appraisal, awards, and innovation platform construction [3]. - The association invites higher education institutions, research institutes, and enterprises in the lighting and related fields to participate in technology achievement appraisals, aiming to enrich the high-quality development of the lighting industry with innovative contributions [3].

E-commerce and Market Strategy - Foshan Lighting emphasizes the strategic layout of e-commerce channels, actively embracing digitalization, and positioning online business as a core driver for market expansion, achieving a 35.70% revenue growth in e-commerce in 2024 [2] - The company is transitioning from a product provider to a comprehensive lighting solution and design service provider, focusing on smart, green, and healthy development trends [4][6] Product Development and Innovation - Research and development are primarily directed towards smart lighting and automotive lighting, particularly in the new energy vehicle sector, with a focus on digital and intelligent technology innovation [4] - The automotive lighting business generated revenue of 2.107 billion yuan in 2024, marking a 15.13% increase, with a significant rise in the proportion of mid-to-high-end products [5] New Market Segments - The company is expanding into new market segments, including sports lighting and marine lighting, with investments in production bases and strategic partnerships to enhance market presence [3][7] - In the marine lighting sector, the company achieved revenue of 67.1 million yuan in 2024, supported by the acquisition of a leading ship lighting enterprise [7] Financial Performance and Shareholder Engagement - Foshan Lighting has maintained a consistent cash dividend policy, distributing a total of 5.854 billion yuan over 32 years, reflecting a commitment to shareholder returns [8] - Recent share buybacks by major shareholders demonstrate confidence in the company's future, with 18.3426 million shares bought back in November 2024 and 11.4296 million shares in May 2025 [8] Emerging Business Areas - The company is actively developing the plant and animal lighting sector, establishing a new business expansion center in February 2025 to focus on technology research and market development [8] - Collaborations with universities and agricultural research institutions aim to create technological barriers in plant growth spectrum control and animal breeding lighting optimization [8]