San'an Optoelectronics' Lin Xiucheng is placed under detention; stock price hits the daily limit, deducting non-recurring gains and losses for four years resulting in a loss of 2.7 billion

Yangtze Business Daily Reporter Huang Cong

At the time it emerged that the company had its first loss after a reverse takeover listing, the controlling shareholder of Sanan Optoelectronics (600703.SH) ran into trouble again.

On the evening of March 22, Sanan Optoelectronics announced that on March 21 the company received a notice from its indirect controlling shareholder, Fujian Sanan Group Co., Ltd. (hereinafter “Sanan Group”). The notice said that in recent days, Sanan Group had received a notice issued by the National Supervisory Commission regarding Lin Xiucheng, the company’s actual controller, being placed under “investigation for detention” and put on file for investigation.

Yangtze Business Daily Reporter found that since July 10, 2017, Lin Xiucheng had not held any position at a listed company, having “moved back to the second line” for nearly nine years. Sanan Optoelectronics has been run by Lin Zhqiang, his son, ever since.

In terms of performance, recently, Sanan Optoelectronics’ performance forecast shows the company is expected to achieve attributable net profit of -2 billion to -3 billion in 2025; and non-recurring profit (loss) after excluding non-recurring items is expected to be -7.5 billion to -8.5 billion.

Yangtze Business Daily Reporter found that 2025 is the first year Sanan Optoelectronics has recorded an annual attributable net profit loss after the company’s reverse takeover listing. The company’s non-recurring profit (loss) has been negative for four consecutive years. Using the midpoint of the 2025 performance forecast, the cumulative loss exceeds 2.7 billion yuan.

It is worth noting that as of the end of the third quarter of 2025, Sanan Optoelectronics’ inventories reached 6.349 billion yuan, up 20.22%, which is at the highest level in the company’s history.

In the secondary market, after trading opened on March 23, Sanan Optoelectronics’ share price hit the daily limit down with a one-price lock. Its latest market cap was 74.286 billion yuan.

Controlling shareholder’s pledge ratio is 53%

On the evening of March 22, Sanan Optoelectronics issued an announcement stating that on March 21 the company received a notice that its indirect controlling shareholder, Sanan Group, had in recent days received a notice issued by the National Supervisory Commission regarding Lin Xiucheng, the company’s actual controller, being placed under “investigation for detention” and put on file for investigation.

Sanan Optoelectronics said that since July 10, 2017, Lin Xiucheng has not held any position in the company. At present, the company’s production and operations and management are operating normally. The company has a sound organizational structure and a standardized governance system. It will continue to operate in accordance with laws, regulations, and relevant rules and systems. The above matters will not have a major impact on the company’s production and operations.

In July 2017, Sanan Optoelectronics convened the 9th session of its board of directors. Based on recommendations from all of the company’s directors, Lin Zhqiang was elected to serve as chairman of the 9th session of the board of directors. Prior to this, the chairman of the board had been Lin Xiucheng.

Lin Xiucheng and Lin Zhqiang are father and son. This also means that Lin Xiucheng has “moved back to the second line” for nearly nine years at Sanan Optoelectronics, and the company has been run by Lin Zhqiang ever since.

However, from October 1992 to the present, Lin Xiucheng has served as chairman and general manager of Sanan Group.

According to available information, Lin Xiucheng was born in 1956 and is currently 70 years old. In the 1980s, Lin Xiucheng made his first fortune by acquiring scrap steel offcuts and earning money through that business. In 1992, he co-founded the Sanan Iron and Steel Smelting Plant with the Fujian Sanming Iron and Steel Works.

In 1999, after coming into contact with LED technology at the Shenzhen High-Tech Fair,