San'an Optoelectronics' "storm" continues: the actual controller is placed under investigation, and major shareholder holdings are frozen in multiple regions

(Source: Damo Finance)

Produced by | Damo Finance

On March 29, Sanan Optoelectronics (600703.SH) issued an announcement stating that all shares held by its indirect controlling shareholder, Sanan Group, and its controlling shareholder, Sanan Electronics, were fully judicially frozen, accounting for 29.47% of the company’s total issued share capital. The above-mentioned major shareholders collectively held nearly 58% of shares were subject to pending freeze applications, corresponding to 17.04% of the total issued share capital.

This sudden storm came only 8 days after the company’s actual controller, “LED king” Lin Xiucheng, was placed under investigation by the National Supervisory Commission.

On March 21, Sanan Optoelectronics received a notice from the group stating that, in recent days, the National Supervisory Commission had issued a notice regarding Lin Xiucheng, the company’s actual controller, being detained and an investigation being filed against him. Subsequently, the incident prompted creditors to take judicial preservation measures. The announcement shows that the applicant for this share freeze includes multiple courts at various levels in places such as Chongqing, Xiamen, and Ezhou.

The company specifically mentioned that since July 2017, Lin Xiucheng has not held any position in the company. At present, the company’s production and operation management is normal, and the above matters will not have a material impact on the company’s production and operation.

As the soul figure of the Sanan group, Lin Xiucheng started out with scrap steel trading. In 2000, he pivoted into the LED industry. In 2008, he listed the company through a backdoor listing, transforming Sanan Optoelectronics into a global LED chip leader, with a peak market value exceeding 200 billion yuan. In 2017, Lin Xiucheng stepped down as chairman of the listed company, with his eldest son, Lin Zhiqiang, taking over while Lin moved into the background to control Sanan Group.

Behind this share freeze is Sanan Optoelectronics’ operational and financial difficulties. From a performance perspective, the company has fallen into a cycle of “increasing revenue but not increasing profits.” In 2022-2024, its non-recurring profit and loss adjusted net profit has suffered losses for three consecutive years, with cumulative losses exceeding 1.9 billion yuan. The 2025 performance forecast shows that the company’s full-year net profit attributable to the parent company is expected to be a loss of 200–300 million yuan, and its non-recurring loss is projected at 750–850 million yuan, marking the onset of four consecutive years of losses.

On March 30, Sanan Optoelectronics and Sanan Group each held a press conference to respond to the impact of the recent incident in which the actual controller Lin Xiucheng was placed under detention and an investigation was filed, as well as the event that shares of the controlling shareholder held in Sanan Optoelectronics were frozen, and the subsequent plans, among other matters.

At his speech at Sanan Group, director Lin Zhidong said, “For the difficulties and impact that the current situation has brought to project cooperation partners and creditors in various places, Sanan Group sincerely apologizes!”

The company’s general manager, Lin Kegang, said that currently Sanan Optoelectronics’ production and operation management is in all aspects normal, and all business activities are steadily advancing according to the established plans. At the same time, Sanan Group has formed a dedicated team to handle the matter of the frozen shares. The government has also stepped in to actively coordinate and promote the early resolution of debt issues. At the group level, the group is also actively seeking strategic cooperation partners.

Lin Kegang further explained that since the incident occurred, the company has conducted extensive communication at the operational level. Customers and suppliers have both said they support it. Banks have also expressed concerns and support, and local government institutions have clearly stated that they will ensure the company’s normal, stable operations.

In response to the current difficulties and crisis, Sanan Group has taken multiple measures: it has established a “risk disposal working group,” formulated the《Sanan Group Risk Disposal Plan》, and has the group’s main leaders personally lead the effort, strengthening overall coordination, assigning responsibilities to each, and implementing role-based division of work. It also actively reports to relevant state ministries, governments at all levels, and financial regulatory authorities, to reflect the situation and seek support. Currently, the government and related departments have stepped in to actively coordinate and promote the early resolution of debt issues. The group is also actively seeking strategic cooperation partners, and under the premise that risks are controllable and commercial operations are sustainable, it will introduce funds to ensure Sanan Group’s normal operations.

A vast amount of information and precise analysis are available in the Sina Finance APP