Controlling shareholder’s shares are frozen; Sanan Optoelectronics' Chairman and General Manager announce share purchase plan

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        Every day reporter | Zhao Li'nan    Every day editor | Yang Yi             

Recently, LED and compound semiconductor leader Sanan Optoelectronics (SH600703, share price 12.56 yuan, market cap 62.662 billion yuan) seems to have entered a turbulent period.

On March 22, Sanan Optoelectronics announced that its actual controller Lin Xiucheng had been placed under custody by the National Supervisory Commission and a case had been filed for investigation.

On the evening of March 29, Sanan Optoelectronics announced that on March 28 it received notice that the total number of shares of the company held by the company’s indirect controlling shareholder and controlling shareholder—more than 1.47 billion shares in total—had all been subject to judicial freezing and then held under “awaiting freezing,” accounting for as much as 29.47% of the company’s total share capital.

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

Controlling shareholder’s holdings frozen

Public information shows that Lin Xiucheng, born in Anxi County, Fujian Province, holds an undergraduate degree and the title of senior economist. He is not only the founder and main investor of Sanan Group and Xiamen Sanan Electronics Co., Ltd. (hereinafter “Sanan Electronics”), but also the capital operator who led the backdoor listing of Sanan Optoelectronics.

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

The news that the actual controller was taken into custody was just released. On March 28, Sanan Optoelectronics received a notice from Sanan Group, an indirect controlling shareholder. Sanan Group and Sanan Electronics, which it controls, had their shares in the listed company subject to judicial freezing and then “awaiting freezing.”

According to Sanan Optoelectronics’ announcement, the number of shares frozen this time is huge. Among them, the approximately 1.2 billion shares held by Sanan Electronics were all frozen, accounting for 100.00% of the shares held by Sanan Electronics and 24.33% of the company’s total share capital; the approximately 257 million shares held by Sanan Group were also all frozen, likewise accounting for 100.00% of the shares held by Sanan Group and 5.14% of the company’s total share capital. Combined, the shares of the two shareholders subject to judicial freezing account for 29.47% of the company’s total share capital.

Between March 25 and March 27, 2026, within just a few days, the First Intermediate People’s Court of Chongqing, the High People’s Court of Chongqing, the Intermediate People’s Court of Xiamen, and the Intermediate People’s Court of Ezhou City, Hubei Province issued freezing directives.

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

In its announcement, Sanan Optoelectronics stated that as of the date of disclosure, Sanan Electronics and Sanan Group had not yet received the legal documents, notices, or other information regarding the above judicial freezing and “awaiting freezing.” Sanan Optoelectronics also emphasized that the controlling shareholder and the company remain independent in terms of assets, business, finance, etc., and that there is no situation that harms the interests of the listed company, such as non-operating fund occupation or non-compliant guarantees.

Chairman and general manager propose shareholding increase plan

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

For the main reasons behind the expected loss in 2025 performance, Sanan Optoelectronics provided an explanation in the announcement. Sanan Optoelectronics said that during the reporting period, the proportion of the company’s LED high-end products further increased. Although both the revenue scale and profitability of the integrated circuit business improved year over year, the company’s profit was still significantly dragged down by the filter and silicon carbide businesses within the integrated circuits. At the same time, government subsidy income received by the company decreased year over year; research and development expenses capitalized as expenses increased year over year; differences in the provisional sale price for precious metal scrap and the price trend of the Shanghai Gold Exchange resulted in a decrease in investment returns; and in accordance with the “Enterprise Accounting Standards,” provisions for impairment loss on inventories with realizable net value lower than cost increased 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 also 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 increase their holdings of the company’s A-shares through the Shanghai Stock Exchange system by centralized bidding, within six months starting from March 31, 2026 (inclusive of that day) (i.e., until September 30, 2026). Regarding the amount of increase, Lin Zhiqiang plans to increase his holding for no less than 20 million yuan and no more than 40 million yuan; Lin Kechuang plans to increase his holding for no less than 5 million yuan and no more than 10 million yuan. The sources of the funds for both persons’ shareholding increases are their own funds or self-raised funds.

It is worth noting that before the disclosure of this shareholding increase announcement, Lin Zhiqiang held no shares of the company (shareholding quantity 0 shares), while Lin Kechuang held approximately 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 senior executives jointly promised that during the implementation of the shareholding increase plan, they will strictly comply with relevant regulations. During the period of implementing the shareholding increase plan and within the statutory time limits, they will not reduce the shares of the company that they directly hold.

However, Sanan Optoelectronics also pointed out risks: during the implementation of this shareholding increase plan, there may be risks that it cannot be implemented or may be delayed due to major changes in policies, the securities market, or other circumstances. If such risk circumstances arise during implementation, the parties carrying out the shareholding increase will take feasible measures to respond, and the company will promptly fulfill its information disclosure obligations.

Cover image source: Every Day Media Archive

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