Recently, the topic of Changzhou Xingyu Automotive Lighting Systems Co.,Ltd. (601799.SH) "humiliating graduates into resigning" has been trending heavily on social media. The core of the issue is that this A-share auto lamp leader brought in 440 graduates from the class of 2026 for centralized onboarding in July 2026, but just over a month later, HR began conducting batch interviews, pressuring 107 of them to resign citing "personal reasons." Those who refused were reassigned to frontline assembly line work.

According to reports, the graduate group chat that once had over 400 members now has only about 120 remaining, meaning roughly 70% of the fresh graduates signed their resignation papers. One master's degree holder who was let go stated that management and R&D roles were forcibly reassigned to the assembly line, calling it "an extremely poor match with elements of humiliating coercion," which is where the term "humiliating resignation" comes from.

After media exposure, the incident quickly ignited public debate and even made it to Weibo's trending list. Netizens expressed outrage that a large corporation with a market value exceeding 20 billion yuan and subsidiaries in Germany, Serbia, and the United States would go back on its word to fresh graduates just entering the workforce. Many wondered if this "bait-and-switch" tactic, long criticized in certain local government investment promotions, is now also showing up at a listed company of considerable industry standing in Changzhou.

As public opinion escalated, more criticism targeted the follow-up handling. For instance, the company's decision to suspend its HR director was met with skepticism, with some netizens saying the HR director was being made a scapegoat. The Changzhou Human Resources and Social Security Bureau's assessment that the company's methods were "simplistic and lacked sufficient effective communication," without demanding corrective action or compensation, was also criticized as "a slap on the wrist."

Given that the company is currently planning a Hong Kong H-share listing, there are also questions about whether this negative public relations storm could hinder its path to listing in Hong Kong.

While the internet is full of condemnations, as an investor focused on capital markets, I'd like to look at this from a different angle: ESG ratings. When Changzhou Xingyu Automotive Lighting Systems Co.,Ltd. released its 2025 annual report, it also published its 2025 Environmental, Social, and Governance (ESG) report. In her address, Chairman Zhou Xiaoping stated: "We uphold the philosophy of employees and shareholders sharing in the fruits of the company's development, protecting employee interests, and focusing on employee growth and talent pipeline building."

Specifically in the "Human Resource Development" section of the ESG report, the company disclosed that it "conducted 121 campus recruitment events in 2025, signing 564 graduates, with significantly improved recruitment efficiency and influence," and that it "fully safeguards employees' rights, creating a fair, just, safe, healthy, diverse, and inclusive workplace; continuously improves the talent development system, provides diversified training support and competitive compensation and benefits, and emphasizes work-life balance, helping employees achieve personal value." The company was even honored with the title of "National Advanced Private Enterprise for Employment and Social Security."

It's worth pondering whether these descriptions will still be able to appear in the company's 2026 ESG report after this storm of public opinion. The ESG rating for Changzhou Xingyu Automotive Lighting Systems Co.,Ltd. has been notably high: Wind's ESG rating places it 27th out of 278 auto parts companies, a quite strong position. Additionally, HuaZheng Index upgraded its ESG rating to A in April of this year, placing it 664th out of 5,498 comparable samples, which is nearly in the top 10%.

These impressive figures and uplifting statements seem rather ironic when viewed against the backdrop of this "humiliating resignation" controversy. After this incident, will the company's ESG rating see a significant shift? Will it still be able to maintain its "National Advanced Private Enterprise for Employment and Social Security" title? These are questions worth watching closely.