The actual controller has been placed under investigation, and 500 million yuan remains overdue… This LED‑related company has simultaneously triggered all six major red flags!

On the evening of August 4, Jiangxi Lianchuang Optoelectronics Technology Co., Ltd. (stock abbreviation: Lianchuang Optoelectronics; stock code: 600363) released six announcements in quick succession, providing a wealth of information.

From investigations initiated against the company and its actual controller to the resignation of the president, along with a barrage of lawsuits and arbitration proceedings, the freezing of funds in subsidiary bank accounts, the impending judicial auction of controlling shareholder shares, and overdue debts that could impact business operations—these developments cover nearly all major risks a listed company might face.

How did a company whose net profit was still expected to double by 2025 suddenly find itself at this juncture?

1. CSRC Investigation Initiated

Lianchuang Optoelectronics announced that both the company and its actual controller, Mr. Wu Rui, have received “Notices of Case Filing” from the China Securities Regulatory Commission (CSRC), alleging violations such as failure to disclose non-operating fund transactions as required by law.

The company stated that all ongoing business activities remain normal, and during the investigation, both the company and Mr. Wu Rui will fully cooperate with the authorities and fulfill their information disclosure obligations.

2. Resignation of President and Vice Presidents

On the same day, Lianchuang Optoelectronics issued an announcement stating that the board of directors had recently received a written resignation letter from Chairman and President Mr. Wu Rui. Citing personal reasons, Mr. Wu has tendered his resignation as president. Following his departure, he will continue to serve as chairman of the company, chair of the Board’s Strategy and Sustainable Development Committee, and a member of the Remuneration and Performance Evaluation Committee.

As of August 4, Mr. Wu did not directly hold any shares in Lianchuang Optoelectronics. However, his controlled entity, Jiangxi Electronic Group Co., Ltd. (hereinafter referred to as “Electronic Group”), holds 86.7815 million shares, representing 19.25% of the company’s total share capital and making it the controlling shareholder.

Public records indicate that Mr. Wu was born in 1971, holds a master’s degree from Tsinghua University, and currently serves as chairman of Jiangxi Electronic Group Co., Ltd., Jiangxi Lianchuang Superconducting Technology Co., Ltd., and Jiangxi Fusion New Energy Co., Ltd. He has been a director of Lianchuang Optoelectronics since May 2011, served as president starting February 2022, and assumed the role of chairman on May 15, 2024.

In addition, just days earlier, Ms. Deng Huixia submitted her resignation as employee director on the ninth board of directors and vice president, citing personal reasons. Following her departure, she will no longer hold any positions within the company or its subsidiaries.

3. Controlling Shareholder Shares Frozen

Lianchuang Optoelectronics also issued a cautionary notice stating that it has learned its controlling shareholder, Electronic Group, has had a portion of its shares subject to judicial freeze. A total of 28.8399 million shares have been frozen, accounting for 33.23% of the shares held by Electronic Group and 6.40% of the company’s total share capital.

Furthermore, an additional 7.5605 million shares held by Electronic Group are under pending freeze, representing 8.71% of its holdings and 1.68% of the company’s total share capital. Meanwhile, 9,708,100 shares owned by Electronic Group are scheduled for judicial auction, constituting 11.19% of its holdings and 2.15% of the company’s total share capital.

Lianchuang Optoelectronics noted that this judicial auction is currently in the public notice phase, with subsequent steps including bidding, payment, and transfer of equity ownership, leaving the final outcome uncertain. As of now, the freezing and auction of these shares will not result in a change of control nor affect the company’s operations.

4. Subsidiary Bank Accounts Frozen

According to Lianchuang Optoelectronics’ “Announcement Regarding the Freezing of Certain Bank Accounts of Controlled Subsidiaries,” the company has learned that some bank accounts of its controlled subsidiaries have been frozen. As of the date of the announcement, approximately RMB 396 million in funds across these accounts has been subject to freezing requests, equivalent to 8.87% of Lianchuang Optoelectronics’ most recent audited net assets. The actual amount frozen totals about RMB 11.1041 million, or 0.25% of the company’s latest audited net assets.

The affected subsidiaries include Jiangxi Lianchuang Optoelectronics Marketing Center Co., Ltd., Jiangxi Zhongjiu Optoelectronics Industry Research Institute, and Xiamen Hualian Electronics Co., Ltd., each involved in litigation arising from financial contract disputes, housing lease disputes, and construction contract disputes with other entities.

Lianchuang Optoelectronics stated that the freezing of these bank accounts is expected to somewhat restrict withdrawals and adversely affect the normal operations of the subsidiaries. The company plans to promptly verify the specific circumstances and take proactive measures to resolve the issue.

5. Overdue Debt of RMB 506 Million

In addition, Lianchuang Optoelectronics and its subsidiary, Jiangxi Lianchuang Optoelectronics Marketing Center Co., Ltd., have failed to meet certain debt repayment obligations on time. As of August 4, the combined outstanding principal of loans and notes payable to financial institutions amounts to RMB 506 million, exceeding 10% of the company’s most recent audited net assets.

Lianchuang Optoelectronics warned that due to these overdue payments, the company may incur additional interest charges, leading to higher financial expenses. Moreover, the delay in repaying these debts could weaken the company’s financing capacity. There is also a risk of facing lawsuits, arbitration, guarantee obligations, bank account freezes, or asset seizures, potentially impacting daily production and operations and affecting this year’s financial performance.

Currently, the company is exploring multiple avenues to broaden its financing channels, actively raising funds to repay debts, and engaging in constructive dialogue with creditors to negotiate extensions or adjustments to repayment schedules. At the same time, the company is taking decisive measures to ensure uninterrupted production, intensifying efforts to collect receivables, and striving to improve overall operational conditions.

6. 25 Cases, Total Claims Exceeding RMB 400 Million

Lianchuang Optoelectronics’ “Announcement on Cumulative Litigation and Arbitration Cases” indicates that, as of the date of the announcement, there are a total of 25 unresolved litigation and arbitration cases involving the company and its consolidated subsidiaries over the past twelve months, all currently under active consideration.

These cumulative cases involve claims totaling approximately RMB 401.7743 million, accounting for 9.01% of Lianchuang Optoelectronics’ audited net assets for 2025.

In response, Lianchuang Optoelectronics emphasized that, given the ongoing nature of these cases and the uncertainty surrounding final judgments, the precise impact on current or future profits remains difficult to quantify. The company will follow applicable accounting standards and adjust its financial reporting based on the actual progress of each case. The company attaches great importance to these legal matters, proactively addressing them to safeguard the legitimate rights and interests of the company and all shareholders.

It is worth noting that Lianchuang Optoelectronics’ core businesses encompass laser products and traditional LED chips, smart control systems, backlight solutions, and related applications, as well as research, development, manufacturing, and sales of optoelectronic communication equipment, smart devices, cables, and metal materials.

Among these, laser products and traditional LED chips primarily include high-power, high-brightness pump sources for specialized fields, integrated laser devices, light-emitting chips, special infrared invisible-light chips, and laser-based anti-drone systems—covering upstream, midstream, and downstream segments of the supply chain—and finding extensive use in domestic specialized sectors, remote controls, indicator lights, and more. Backlight products are mainly applied in tablet displays, industrial control panels, automotive backlights, and similar areas. Smart control solutions are widely used in household appliance management, new-energy vehicle electronics, photovoltaic systems, and industrial automation.

In particular, regarding smart control, the company’s subsidiary Hualian Electronics has actively participated in drafting national standards, including general technical specifications for plant lighting LED fixtures and detailed chip-level packaging (CSP) standards for LED blanks. Furthermore, the industry standard for voice‑enabled modules in smart home appliances, co-authored by Hualian Electronics, was officially released in 2025.

In terms of performance, Lianchuang Optoelectronics reported revenue of approximately RMB 3.342 billion for 2025, up 7.66% year over year, and net profit of roughly RMB 480 million, a remarkable 99.08% increase compared to the previous year. By segment, main revenue contributions were: smart control RMB 1.662 billion (49.74%), backlight RMB 1.145 billion (34.26%), laser products and traditional LED chips RMB 337 million (10.10%), and cable/metal products RMB 131 million (3.92%).

Yet despite such impressive results—and having recently been vigorously advancing its “laser + superconductivity” strategy—the company now faces a concentrated wave of risks.