Sanan Optoelectronics Lin Xiucheng Under Investigation, Stock Hits Limit Down; Non-GAAP Loss of 2.7 Billion Over Four Years, Inventory Reaches 6.3 Billion Awaiting Turnaround

Changjiang Business Daily News ● Changjiang Business Daily Reporter Huang Cong

Following its first loss after going public via a backdoor listing, San’an Optoelectronics (600703.SH) faced new issues with its actual controller.

On the evening of March 22, San’an Optoelectronics announced that on March 21, it received notice that its indirect controlling shareholder, Fujian San’an Group Co., Ltd. (hereinafter “San’an Group”), had recently received a notice from the National Supervisory Commission regarding the company’s actual controller, Lin Xiucheng, being detained and under investigation.

The Changjiang Business Daily found that since July 10, 2017, Lin Xiucheng has not held any position at the listed company and has been “retired from the front lines” for nearly nine years. San’an Optoelectronics has been led by his son, Lin Zhiqiang, until now.

In terms of performance, recent earnings forecasts show that by 2025, the company expects a net profit attributable to shareholders of -200 million to -300 million yuan; net profit after deducting non-recurring gains and losses of -750 million to -850 million yuan.

The Changjiang Business Daily discovered that 2025 will be the first year since San’an Optoelectronics’ backdoor listing that it reports an annual net loss attributable to shareholders. The company’s non-recurring net profit has been negative for four consecutive years. Based on the midpoint of the 2025 forecast, the accumulated loss exceeds 2.7 billion yuan.

Notably, as of the end of Q3 2025, San’an Optoelectronics’ inventory reached 6.349 billion yuan, a year-on-year increase of 20.22%, reaching the highest level in the company’s history.

In the secondary market, after opening on March 23, San’an Optoelectronics’ stock price hit the daily limit down, with a latest market value of 74.286 billion yuan.

Share pledge ratio of controlling shareholders reaches 53%

On the evening of March 22, San’an Optoelectronics announced that on March 21, it received notice that its controlling shareholder, San’an Group, had recently received a notice from the National Supervisory Commission regarding Lin Xiucheng’s detention and investigation.

San’an Optoelectronics stated that since July 10, 2017, Lin Xiucheng has not held any position at the company. Currently, the company’s production and management are normal. The company has a complete organizational structure and a standardized governance system, and will continue to operate in accordance with laws, regulations, and relevant policies. The above matters will not have a significant impact on the company’s operations.

In July 2017, San’an Optoelectronics held its ninth board of directors meeting, and upon recommendation from all directors, elected Lin Zhiqiang as chairman of the ninth board. Previously, the chairman was Lin Xiucheng.

Lin Xiucheng is the father of Lin Zhiqiang. This also means that Lin Xiucheng has been “retired from the front lines” for nearly nine years, with the company led by Lin Zhiqiang.

However, from October 1992 to now, Lin Xiucheng has served as chairman and general manager of San’an Group.

According to data, Lin Xiucheng was born in 1956, currently 70 years old. In the 1980s, he made his first fortune by purchasing scrap steel. In 1992, he co-founded San’an Ironmaking Plant with Fujian Sanming Steel Factory.

In 1999, after engaging with LED technology at the Shenzhen High-Tech Fair, Lin Xiucheng decided to shift to the semiconductor industry. In 2000, San’an Optoelectronics was established, and in 2002, it successfully developed its first epitaxial wafer. In 2008, San’an Optoelectronics went public via a backdoor listing.

On March 11, 2026, San’an Optoelectronics announced that some of its controlling shareholder’s shares were pledged, showing that Xiamen San’an Electronics Co., Ltd. (hereinafter “San’an Electronics”) holds 1.214 billion shares, accounting for 24.33% of the total share capital. After pledging some shares, the total pledged shares amount to 612 million, representing 50.43% of its holdings.

At the same time, San’an Electronics and its controlling shareholder, San’an Group, together hold 1.47 billion shares, accounting for 29.47% of the total share capital. After pledging some shares, the total pledged shares by both parties amount to 781 million, about 53.14% of their holdings.

The announcement shows that the pledged shares due within one year amount to 498 million, representing 33.83% of their holdings and 9.97% of the company’s total share capital, with a financing balance of 3.643 billion yuan.

San’an Optoelectronics states that San’an Group and San’an Electronics have good credit and the capacity to fulfill their obligations. The repayment funds mainly come from operating income, investment income, self-raised funds, and other sources.

Non-recurring profit and loss have been negative for four years, urgent to turn around

San’an Optoelectronics is a globally renowned enterprise specializing in the R&D, manufacturing, and service of compound semiconductors. The company focuses on four main business pillars: LED, microwave RF, power electronics, and optical technology, building a globally recognized platform for compound semiconductor R&D, manufacturing, and services.

Data shows that San’an Optoelectronics’ products are widely used in lighting, displays, infrared sensing, AR glasses, new energy vehicles, charging stations, 5G, 3D recognition, cloud computing, base stations, and photovoltaic inverters, aiming to build a “chip” world of interconnected everything and provide core power for a future smart world.

However, in recent years, San’an Optoelectronics’ profitability has been less than ideal.

From 2022 to 2024, its operating revenue was 13.222 billion yuan, 14.053 billion yuan, and 16.106 billion yuan, respectively, with year-on-year growth rates of 5.17%, 6.28%, and 14.61%. Its net profit attributable to shareholders was 685 million yuan, 367 million yuan, and 253 million yuan, respectively, declining by 47.82%, 46.50%, and 31.02%, marking three consecutive years of decline. Its non-recurring net profit was -310 million yuan, -1.088 billion yuan, and -511 million yuan, with losses for three straight years.

According to the earnings forecast, San’an Optoelectronics expects a net profit attributable to shareholders of -200 million to -300 million yuan in 2025; non-recurring net profit of -750 million to -850 million yuan.

The company states that during the reporting period, the proportion of high-end LED products increased further. Revenue and profitability of the integrated circuit business improved year-over-year, but filters and silicon carbide segments still drag down profits. Additionally, government subsidies decreased, R&D expenses increased, and sales of precious metal waste at prices differing from Shanghai Gold Exchange trends reduced investment income. Also, provisions for inventory impairment increased due to lower realizable net value under accounting standards. These factors led to the reported losses.

The Changjiang Business Daily found that 2025 will be the first year after San’an Optoelectronics’ backdoor listing to report an annual net loss attributable to shareholders.

Moreover, considering the forecast midpoint, non-recurring net profit has been negative for four consecutive years, with total losses exceeding 2.7 billion yuan.

As of the end of Q3 2025, San’an’s inventory reached 6.349 billion yuan, a 20.22% increase year-over-year, reaching a record high.

The 2026 Hurun Global Rich List shows that Lin Xiucheng and Lin Zhiqiang, father and son, together hold assets worth 16 billion yuan, ranking third among Xiamen’s wealthy. In 2010, Lin Xiucheng was also listed as Xiamen’s richest person on Forbes.

In the secondary market, after opening on March 23, San’an Optoelectronics’ stock price hit the daily limit down at 14.89 yuan per share, with a market value of 742.86 billion yuan.