San'an Group plans to introduce strategic investors to resolve debt issues, announcing three countermeasures.

Ask AI · How will government-backed strategic investors help Sanan Group out of trouble?

On March 30, First Financial reporters learned from a press conference of Sanan Group and Sanan Optoelectronics (600703.SH) that Sanan Group is seeking strategic investors to resolve its debt issues, has had preliminary discussions with investors with government backgrounds, but no specific plan has been finalized; currently, Sanan Optoelectronics is operating normally, and its silicon carbide chip project in cooperation with STMicroelectronics has entered mass production.

In the past week, the incident of Sanan Optoelectronics’ actual controller and Sanan Group chairman and general manager Lin Xiucheng being detained and investigated by the National Supervisory Commission has triggered creditors to take debt preservation measures and posed short-term liquidity challenges for the group, leading to a continuous decline in Sanan Optoelectronics’ stock price.

Sanan Group director Lin Zhidong revealed that Sanan Group has taken three measures: first, establishing a risk disposal task force to coordinate; second, reporting the situation to relevant ministries, local governments, and financial regulators, and negotiating debt extensions with banks to quickly resolve debt problems; third, actively seeking strategic partners and introducing strategic funds. Preliminary communication has been made with investors with government backgrounds, but no specific plan has been developed. He stated that Sanan Optoelectronics, as a listed company, currently has normal cash flow.

Lin Kechuang, vice chairman and general manager of Sanan Optoelectronics, said that in the past week, Sanan Optoelectronics has communicated with suppliers, customers, and financial institutions and received their support; operations are normal. Sanan Optoelectronics has an independent organizational structure, and all business segments are progressing as planned. To stabilize investor confidence, chairman Lin Zhiqiang will invest between 8B and 40 million yuan to increase his holdings, and Lin Kechuang will invest between 5 million and 10 million yuan.

Lin Kechuang also stated that the Chongqing AnyiFa silicon carbide chip project, a joint venture between Sanan Optoelectronics and STMicroelectronics, has entered mass production, which will have a profound impact on the global silicon carbide market. Sanan Optoelectronics’ long-term development strategy remains unchanged. In the first quarter of this year, the company received only over 20 million yuan in government subsidies, and it has strong self-sustaining capabilities. Currently, its debt ratio is only 30%-40%, and there is no situation of banks tightening loans.

According to Sanan Optoelectronics’ announcement on the evening of March 29, the 29.47% equity stake in Sanan Optoelectronics directly and indirectly held by Sanan Group has been judicially frozen. Sanan Group has formed a dedicated team to resolve the freezing of shares and is actively communicating with creditors. The government has also intervened to coordinate and promote debt resolution. This share freeze will not significantly affect the company’s control or equity structure for now, but if the frozen shares are not properly resolved later, it could lead to forced transfer or judicial auction, which may pose risks to the stability of Sanan Optoelectronics’ control.

Sanan Optoelectronics expects a net loss attributable to the parent of 200 million to 400 million yuan in 2025, mainly due to significant losses from the filter and silicon carbide businesses in the integrated circuit sector, reduced government subsidies, and increased R&D expenses.

In the past week, Sanan Optoelectronics’ market value has fallen from over 8B yuan to over 50 billion yuan. As of 10:35 a.m. on March 30, Sanan Optoelectronics’ stock price dropped 4.14% to 12.04 yuan per share.

(This article is from First Financial)