After the incident of terminating 107 fresh graduates, Xingyu Co., Ltd. delivered its first quarterly financial report following the controversy.
Recently, Xingyu Co., Ltd. released its third-quarter report, showing a clear weakening in performance. In the first three quarters of 2026, Xingyu Co., Ltd.'s operating revenue was 10.494 billion yuan, a year-on-year decrease of 2.02%; net profit attributable to shareholders was 932 million yuan, a year-on-year decrease of 18.34%. Looking at the third quarter alone, the situation was even more dismal. Xingyu Co., Ltd. achieved revenue of 3.61 billion yuan in Q3, a year-on-year decline of 8.67%; net profit attributable to shareholders was 262 million yuan, a sharp drop of 39.62% year-on-year. Non-recurring net profit was 231 million yuan, a year-on-year decrease of 45.86%, nearly halved.
This is also the first time since Xingyu Co., Ltd.'s listing in 2011 that both revenue and net profit declined year-on-year in the first three quarters, and the first time since Q3 2021 that both revenue and net profit fell in nearly five years. The trend of declining performance had already emerged in the second quarter. In the first half of this year, Xingyu Co., Ltd.'s revenue still increased slightly by 1.87% year-on-year. However, net profit attributable to shareholders had already shown a weakening trend, declining by 5.26% year-on-year. Among this, net profit attributable to shareholders in the second quarter was 314 million yuan, a year-on-year decrease of 18.26%.
In response, Xingyu Co., Ltd. explained in its financial report that this was mainly due to a decline in business revenue, significantly higher year-on-year prices of some raw materials leading to increased costs, and higher research and development expenses. The main issue is still rising costs. Xingyu's automotive lighting products do not have high gross margins. In 2025, Xingyu's costs reached 10.3 billion yuan, accounting for 84.3% of sales costs. This year, the prices of raw materials for automotive lighting such as LEDs, chips, circuit boards, wiring harnesses, and plastic pellets are all rising, directly driving up costs and squeezing profits.
The increase in research and development is also an important factor. Traditional fuel vehicles are not selling well, and in order to bet on smart automotive lighting, increasing R&D investment is necessary. The financial report shows that in the first three quarters of this year, Xingyu Co., Ltd.'s R&D expenses were 720 million yuan, a year-on-year increase of 12.35%, with the R&D expense ratio rising to 6.86%, up nearly 0.9 percentage points year-on-year; during the same period, selling expenses were only 37.47 million yuan, a year-on-year decrease of 19.9%. Costs are climbing, R&D is still increasing, but selling expenses are declining, which directly erodes profits.
In addition, Xingyu Co., Ltd.'s performance decline is directly related to the overall downturn in the automotive industry. More than 90% of Xingyu Co., Ltd.'s revenue comes from automotive lighting. The 2025 financial report shows that automotive lighting revenue accounts for 95.55% of total revenue. Based on 2025 sales revenue, Xingyu's market share in China's automotive lighting market is 11.6%, ranking first, and its global market share is 4.6%, ranking seventh globally, making it unquestionably the "lighting leader" in China. However, since the beginning of this year, cars have clearly become harder to sell. In the first three quarters of 2026, China's automobile production and sales reached 23.246 million and 23.271 million units respectively, both down 4.5% year-on-year. Among this, domestic sales were 15.066 million units, down 22.4% year-on-year; exports were 8.205 million units, up 65.8% year-on-year. The downturn in automobile sales has inevitably led to a decline in market demand for automotive lighting.
Moreover, Xingyu Co., Ltd.'s revenue mainly depends on the domestic market, with domestic sales accounting for about 95.65% in 2025. The sharp decline in domestic automobile sales, transmitted to component suppliers, has further led to a decline in Xingyu's performance. In the third quarter, Xingyu Co., Ltd. attracted controversy among netizens due to the centralized termination of 107 fresh graduates. In July, Xingyu Co., Ltd.'s management adjusted positions on the grounds of "subsequent order conditions and employment needs," ultimately terminating labor contracts with 107 newly hired fresh graduates. Afterwards, the controversy continued to ferment, and some laid-off fresh graduates even "complained overseas," bringing the matter to major customers of Xingyu Co., Ltd. such as Volkswagen and Mercedes-Benz. Xingyu Co., Ltd. later admitted that this decision involved "misjudgment and hasty decision-making." Xingyu Co., Ltd.'s actual controller and general manager, Zhou Xiaoping, was also docked one year's salary as a result. According to data disclosed in the 2025 financial report, Zhou Xiaoping had 1.1 million yuan deducted from her salary.
It appears the punishment was quite severe, but Zhou Xiaoping does not rely on her salary to make money, but on dividends. The financial report shows that Zhou Xiaoping directly holds 42% of shares, her 100%-controlled Xingyu Investment holds 6.19%, and her mother Sun Exiao holds 6.11%, with the family holding a total of 54.30%. In 2026, Xingyu Co., Ltd. carried out two dividend distributions, namely the 2025 annual dividend in May, with a cash dividend of 18 yuan per 10 shares (including tax), totaling 509 million yuan; in mid-October, it implemented the 2026 semi-annual dividend, with 2 yuan per 10 shares, totaling 56.64 million yuan. The two distributions totaled 566 million yuan in dividends, with the Zhou Xiaoping family receiving 307 million yuan. Compared with these 300 million yuan in dividends, the annual salary of 1.1 million yuan is indeed insignificant.
In addition, Xingyu Co., Ltd. was also issued a regulatory letter by regulators after multiple data errors were found in its 2024 and 2025 financial reports. Overall, due to the impact of the controversy over terminating more than 100 fresh graduates, Xingyu Co., Ltd. not only lost its reputation and saw its stock price collapse, but was also penalized by regulators, and even its pursuit of a secondary listing in Hong Kong was affected. Fortunately, Xingyu currently still has a relatively large financial buffer. In the first three quarters of 2026, the company's net profit attributable to shareholders was 932 million yuan, and net cash flow from operating activities was 1.319 billion yuan. As of the end of September, Xingyu also held about 3.092 billion yuan in cash and bank deposits.
But for actual controller Zhou Xiaoping, her personal wealth has truly shrunk. In 2021, Zhou Xiaoping ranked 21st on the Hurun Women Entrepreneurs List with 30.5 billion yuan, becoming the richest woman in Changzhou, Jiangsu. This was also the peak moment of Zhou Xiaoping's life. However, the Hurun Rich List released not long ago shows that Zhou Xiaoping's wealth is 13.5 billion yuan, ranking 560th, down 249 places. If calculated based on shareholding, at the end of February this year, Xingyu Co., Ltd.'s stock price once reached a high of 156.52 yuan, and Zhou Xiaoping's shares were then worth about 24.3 billion yuan. But as of November 2, Xingyu Co., Ltd.'s stock price was 69.43 yuan, with a total market value of 19.835 billion yuan. In eight months, Zhou Xiaoping's shareholding market value has shrunk to about 10.77 billion yuan.
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