600703, major shareholder's holdings are judicially frozen! Executives quickly step in to stabilize the market.

When the rain pours down right on a leaking roof—it rains all night. After the company’s actual controller, Lin Xiucheng, was detained and subsequently put under investigation, Sanan Optoelectronics (600703) also received notices that the company shares held by a major shareholder had been judicially frozen and subject to further “watchlist” freezing.

Specifically, in this equity freeze, the controlling shareholder of Sanan Optoelectronics, Xiamen Sanan Electronics Co., Ltd. (hereinafter referred to as “Sanan Electronics”), has a total of 1.214 billion shares frozen, accounting for 100% of the shares it holds and 24.33% of the company’s total share capital; the freeze period is from March 2026 to March 2029. The freeze applicant is either the First Intermediate People’s Court of Chongqing Municipality or the High People’s Court of Chongqing Municipality, and the reasons for the freeze are a judicial freeze or judicial freeze collateral.

At the same time, the indirectly controlling shareholder of Sanan Optoelectronics, Fujian Sanan Group Co., Ltd. (hereinafter referred to as “Sanan Group”), has frozen shares of 257 million yuan, accounting for 100% of the shares it holds and 5.14% of the listed company’s total share capital. The freeze applicant is either the Xiamen Intermediate People’s Court or the Hubei Ezhou Intermediate People’s Court, and the freeze reasons include a judicial freeze or judicial freeze collateral.

In addition, the 850 million shares jointly held by Sanan Electronics and Sanan Group are subject to further “watchlist” freezing, accounting for 57.8% of the shares they hold and 17.04% of the listed company’s total share capital. The freeze applicants are courts in places including Chongqing, Xiamen, and Ezhou. The freeze reasons are all further “watchlist” freezing.

The announcement shows that Sanan Optoelectronics’ controlling shareholder also confirmed that, as of the disclosure date of the announcement, Sanan Electronics and Sanan Group have not yet received legal documents, notices, or other information regarding the above judicial freeze and further “watchlist” freezing.

Sanan Optoelectronics said that the controlling shareholders and the company remain independent from each other in terms of assets, business, finances, and so on, and there is no situation that harms the interests of the listed company, such as non-operational capital occupation or improper guarantees. The frozen shares in this case will not temporarily have a material impact on the company’s control rights, equity structure, corporate governance, or other related matters. At present, the company’s production and operations management is operating normally, and the above matters will not adversely affect the company’s production and operations.

However, Sanan Optoelectronics also pointed out that if the above frozen shares are not properly resolved later on, it may lead to situations such as forced transfer and judicial auctions, thereby posing a risk of affecting the stability of the company’s control rights. Sanan Group has set up a dedicated team to address the matters related to the frozen shares, is actively communicating with creditors to safeguard their lawful rights and interests, and the government has also stepped in to coordinate proactively and help resolve the debt issues as quickly as possible.

It is worth noting that on March 21, Sanan Optoelectronics received a notice from Sanan Group. In recent days, Sanan Group received a notice issued by the National Supervisory Commission regarding the detention and filing for investigation of the company’s actual controller, Lin Xiucheng. Affected by this, Sanan Optoelectronics’ share price has fallen sharply in the recent period, with a decline of more than 20%.

After a continuous and sharp drop, investors have been looking forward to share increases.

The same-day announcement shows that, based on confidence in the company’s future development prospects and recognition of the company’s long-term investment value, and also to enhance investor confidence and protect investors’ interests, the company’s chairman, Lin Zhiqiang, and the vice chairman and general manager, Lin Kechuang, plan to increase their holdings of the company’s shares by using a centralized competitive bidding method within six months starting from March 31, 2026 (including this day).

Specifically, Lin Zhiqiang plans to increase his holdings by not less than 20 million yuan and not more than 40 million yuan, while Lin Kechuang plans to increase his holdings by not less than 5 million yuan and not more than 10 million yuan.

The announcement also shows that Sanan Optoelectronics and its subsidiaries received government subsidies of about 20.711 million yuan; the amount expected to be transferred from installment amortization of deferred income into other income for the first quarter of 2026 is 146 million yuan. The combined total of the above two items is about 166 million yuan, accounting for 65.68% of the company’s net profit attributable to shareholders of the listed company in its most recent period based on audited figures.

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Responsible editor: Yang Hongbo