After the actual controller Lin Xiucheng was detained, all shares held by San'an Optoelectronics' controlling shareholder were frozen, with a market value exceeding 18 billion yuan! The chairman and general manager plan to jointly increase their holdings.

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        Every Daily reporter｜Zhao Linan    Every Daily editor｜Cheng Peng Yang Yi              

Reporter|Zhao Linan

Editor|Cheng Peng Yang Yi Du Hengfeng Proofreader|Chen Keming

Recently, LED and compound semiconductor leader Sanan Optoelectronics (SH600703, stock price 12.56 yuan, market cap 62.66B yuan) seems to be entering a period of trouble.

On March 22, Sanan Optoelectronics announced that its actual controller Lin Xiucheng was placed under investigation by the National Supervisory Commission and was also filed for investigation.

On the evening of March 29, Sanan Optoelectronics announced that, on March 28, it received notice that the total number of more than 1.47 billion shares of the company held by the company’s indirect controlling shareholder and controlling shareholder had all been subject to judicial freezing and subsequent “awaiting freezing” orders, accounting for as much as 29.47% of the company’s total share capital. Based on the latest share price, the total market value of these shares is as high as 18.4 billion yuan.

Also on the evening of March 29, Sanan Optoelectronics released a bulletin stating that the company’s senior executives proposed a shareholding increase plan. The current chairman Lin Zhiqiang (son of Lin Xiucheng) and the deputy chairman and general manager Lin Kechuang both announced that they intend to use up to 50 million yuan to increase their holdings of the company’s A shares in the secondary market over the next six months.

Controlling shareholder’s holdings frozen

Public information shows that Lin Xiucheng, born in Anxi County, Fujian Province, has a bachelor’s degree and a senior economist professional title. He is not only the founder and a major investor of Sanan Group and Xiamen Sanan Electronics Co., Ltd. (hereinafter referred to as “Sanan Electronics”), but also the capital operator who led the backdoor listing of Sanan Optoelectronics.

After serving in control of the listed company for many years, in July 2017, Lin Xiucheng handed over the chairmanship to his eldest son Lin Zhiqiang. Since then, for nearly 9 years, Lin Xiucheng has not held any position at Sanan Optoelectronics.

Not long after the news that the actual controller was placed under investigation was published, on March 28, Sanan Optoelectronics received a notice from its indirect controlling shareholder Sanan Group. Sanan Group and Sanan Electronics, which is controlled by Sanan Group, had their shares in the listed company frozen by judicial means and also subject to “awaiting freezing” orders.

According to Sanan Optoelectronics’ announcement, the number of shares frozen in this case is huge. Among them, about 1.2 billion shares held by Sanan Electronics were all frozen, accounting for 100.00% of its held shares and 24.33% of the listed company’s total share capital; about 257 million shares held by Sanan Group were also fully frozen, likewise accounting for 100.00% of its held shares and 5.14% of the listed company’s total share capital. The combined shares judicially frozen by the two shareholders account for 29.47% of the listed company’s total share capital.

Within just a few days from March 25 to March 27, 2026, the First Intermediate People’s Court of Chongqing, the High People’s Court of Chongqing, the Xiamen Intermediate People’s Court, and the Ezhou Intermediate People’s Court in Hubei Province issued freezing instructions.

At the same time, about 850 million shares held by the above shareholders (representing 17.04% of the listed company’s total share capital) were also subject to “awaiting freezing” implemented by the High People’s Court of Chongqing, the Xiamen Intermediate People’s Court, and the Ezhou Intermediate People’s Court in Hubei Province.

In its announcement, Sanan Optoelectronics stated that as of the disclosure date, Sanan Electronics and Sanan Group have not yet received legal documents, notices, or other information regarding the above-mentioned judicial freezing and “awaiting freezing” orders. Sanan Optoelectronics emphasized that the controlling shareholder and the company remain independent in terms of assets, business, finance, etc., and there is no situation involving non-operational fund occupation, improper guarantees, or other circumstances that would harm the interests of the listed company.

Chairman and general manager propose a shareholding increase plan

According to the “2025 Annual Performance Forecast” and its supplementary announcement previously issued by Sanan Optoelectronics, based on calculations by the finance department, the company expects that in 2025, its net profit attributable to shareholders of the listed company will incur losses ranging from 200 million yuan to 300 million yuan. In addition, it is expected that the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses will have a loss amount ranging from 750 million yuan to 850 million yuan.

Regarding the main reasons for the expected loss in 2025 performance, Sanan Optoelectronics provided explanations in the announcement. Sanan Optoelectronics said that during the reporting period, the proportion of the company’s LED high-end products continued to increase. Although the revenue scale and profitability of the integrated circuit business both improved year over year, the company’s profits are still significantly dragged down by the filter and silicon carbide businesses within the integrated circuits. At the same time, the government subsidies the company received decreased year over year; the portion of R&D expenses expensed increased year over year; adjustments to the provisional selling price of precious metal scrap and the price trend of the Shanghai Gold Exchange resulted in a reduction in investment income; and in accordance with the “Enterprise Accounting Standards,” it made provisions for impairment losses for inventories whose net realizable value is lower than cost, with the amount increasing year over year.

On the evening of March 29, Sanan Optoelectronics announced that, based on confidence in the company’s future development prospects and recognition of the company’s long-term investment value, and at the same time to strengthen investors’ confidence and protect their interests, the company’s chairman Lin Zhiqiang and the deputy chairman and general manager Lin Kechuang intend to implement a shareholding increase plan.

Under the shareholding increase plan, Lin Zhiqiang and Lin Kechuang will, within six months starting from March 31, 2026 (including this day) through September 30, 2026, increase their holdings of the company’s A shares by using the centralized bidding method through the Shanghai Stock Exchange system. Regarding the amount of the shareholding increase, Lin Zhiqiang plans to increase holdings with an amount of not less than 20 million yuan and not more than 40 million yuan; Lin Kechuang plans to increase holdings with an amount of not less than 5 million yuan and not more than 10 million yuan. The sources of their funds for the shareholding increase are both their own funds or self-raised funds.

It is worth noting that prior to the disclosure of this shareholding increase announcement, Lin Zhiqiang did not hold any shares of the company (holding quantity: 0 shares), while Lin Kechuang held about 1.75 million shares of the company, accounting for 0.04% of the company’s total share capital.

According to Sanan Optoelectronics’ announcement, the two executives simultaneously committed that during the implementation of the company’s shareholding increase plan, they will strictly comply with relevant regulations. During the implementation period of the shareholding increase plan and within the statutory period, they will not reduce the company shares they directly hold.

However, Sanan Optoelectronics also pointed out risks: during the implementation of this shareholding increase plan, there may be risks such as inability to implement or delays due to major changes in policies, the securities market, and other circumstances. If the above risk scenarios occur during implementation, the shareholding increase entities will take practical and feasible measures to respond, and the company will timely fulfill its information disclosure obligations.

Disclaimer: The contents and data in this article are for reference only and do not constitute investment advice. Please verify before using. Operate at your own risk.

｜Daily Economic News nb dnews Original article｜

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