Controlling Shareholder Lin Xiucheng Detained and Under Investigation; San'an Optoelectronics Stock Hits Daily Limit Down

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Everyday Economic News Reporter Zhao Linan, Edited by Bi Luming

On March 22, Sanan Optoelectronics (SH600703), a leader in LED and compound semiconductors, announced that the company’s actual controller, Lin Xiucheng, has been detained and placed under investigation by the National Supervisory Commission.

The Daily Economic News reporter noted that Lin Xiucheng, as the key capital operator and core founder who led Fujian Sanan Group Co., Ltd. to go public via a backdoor listing of Tanyi Technology Co., Ltd. (hereinafter Tanyi Technology), has not held any position in the company for nearly nine years since he handed over the chairmanship to his eldest son, Lin Zhiqiang, in July 2017.

It is worth mentioning that yesterday (March 23), Sanan Optoelectronics’ stock price hit the limit down, closing at 14.89 yuan per share.

“Retired from the front lines” for nearly 9 years

Sanan Optoelectronics stated that on March 21, 2026, it received a notice from Fujian Sanan Group Co., Ltd. (hereinafter Sanan Group), that Sanan Group recently received a notification from the National Supervisory Commission regarding the detention and investigation of the company’s actual controller, Lin Xiucheng.

This news came unexpectedly. Looking back at the company’s development history, this capital magnate who created Sanan Optoelectronics has actually “retired from the front lines” for nearly nine years.

Lin Xiucheng was born in Anxi County, Fujian Province. He holds a university degree and the title of senior economist. He is not only the founder and major investor of Sanan Group and Xiamen Sanan Electronics Co., Ltd., but also served as chairman of several holding subsidiaries.

The predecessor of Sanan Optoelectronics was Tanyi Technology. From 2004 to 2006, Tanyi Technology suffered losses for three consecutive years, and its stock was suspended from trading by the Shanghai Stock Exchange in May 2007.

During Tanyi Technology’s critical period of restructuring for survival, Lin Xiucheng and his controlled Sanan Group stepped in strongly. In 2007, Sanan Group successfully acquired 54.297 million legal person shares of Tanyi Technology. With this, Lin Xiucheng gained control of Tanyi Technology.

Subsequently, Lin Xiucheng led a large-scale asset restructuring and share reform. Sanan Group injected Tanyi Technology with assets by issuing shares to its listed subsidiary, Sanan Electronics, to acquire LED epitaxial wafers and chip operations. This textbook-like backdoor listing revived Tanyi Technology, transforming it into a leading enterprise in the LED industry.

However, after leading the listed company for many years, Lin Xiucheng chose to “retreat quickly.” In June 2017, Sanan Optoelectronics held a board meeting chaired by Lin Xiucheng, with Lin Zhiqiang and others nominated as non-independent directors of the ninth board. Records show that Lin Zhiqiang is Lin Xiucheng’s son.

In July 2017, Sanan Optoelectronics held its first extraordinary general meeting of shareholders for 2017, where Lin Xiucheng, as chairman, presided over his last shareholder meeting. At this meeting, Lin Zhiqiang was elected as a non-independent director of the ninth board. On the same day, at the first meeting of the ninth board, all directors recommended Lin Zhiqiang, who was elected as chairman of the ninth board.

Last year’s company performance forecasted losses

In response to the sudden event of the actual controller Lin Xiucheng being detained and investigated, Sanan Optoelectronics stated in its announcement that since July 10, 2017, Lin Xiucheng has not held any position in the company.

The company clearly stated that its production and operation management are normal. It has a complete organizational structure and standardized governance system, and will continue to operate in accordance with the Company Law of the People’s Republic of China, the Shanghai Stock Exchange Listing Rules, the Corporate Governance Guidelines, the Articles of Association, and other laws, regulations, and relevant systems. The above incident will not have a significant impact on the company’s production and operation.

Despite emphasizing stable management and normal operations, it cannot be ignored that Sanan Optoelectronics is currently under significant pressure regarding its performance.

In January 2026, Sanan Optoelectronics disclosed the “2025 Annual Performance Forecast.” According to preliminary calculations by the finance department, the company is expected to achieve a net profit attributable to shareholders of the listed company between -2 billion and -4 billion yuan in 2025; and a net profit excluding non-recurring gains and losses between -7.5 billion and -8.5 billion yuan.

Subsequently, Sanan Optoelectronics issued a supplementary announcement to the forecast. Further calculations by the finance department adjusted the expected net profit attributable to shareholders for 2025 from “-2 billion to -4 billion” yuan to “-2 billion to -3 billion” yuan.

The company explained the main reasons for the projected loss in 2025 in the announcement.

Sanan Optoelectronics stated that during the reporting period, the proportion of high-end LED products further increased. Although revenue and profitability of the integrated circuit business improved year-on-year, the filter and silicon carbide businesses within the integrated circuit segment still significantly dragged down profits. Additionally, government subsidies received decreased year-on-year; R&D expenses increased; sales of precious metal waste at provisional prices diverged from the Shanghai Gold Exchange price trend, reducing investment income; and according to the Accounting Standards for Business Enterprises, inventory with a net realizable value below cost was impaired, increasing provisions for inventory devaluation.

Regarding the detention and investigation of Lin Xiucheng, Sanan Optoelectronics stated that the company will continue to monitor the follow-up situation and fulfill its information disclosure obligations in a timely manner according to relevant regulations.