Creditor upgrades! The controlling shareholder of Sanan Optoelectronics has been petitioned for bankruptcy reorganization for the second time.

On the evening of October 15, Sanan Optoelectronics issued an announcement stating that on the same day, it received notice from its controlling shareholder, Xiamen Sanan Electronics Co., Ltd. (referred to as “Sanan Electronics”), that both Sanan Electronics and its indirect controlling shareholder, Fujian Sanan Group Co., Ltd. (referred to as “Sanan Group”), have been subject to bankruptcy reorganization applications filed by creditors. At the same time, all 1.312 billion shares held by Sanan Electronics and Sanan Group in the company have been placed under judicial pending freeze.

State‑owned entities from Hubei and Hunan initiate bankruptcy reorganization

The applicants for this reorganization have state‑owned backgrounds. According to the announcement, Hubei Changjiang Anxin Industrial Investment Fund Partnership (Limited Partnership) and Hunan Lugu Development Group Co., Ltd., as creditors of Sanan Electronics, have filed with the Xiamen Intermediate People’s Court a petition for bankruptcy reorganization of Sanan Electronics; meanwhile, Hunan Lugu Development Group, as a creditor of Sanan Group, has simultaneously submitted a petition to the court for bankruptcy reorganization of Sanan Group.

The Xiamen Intermediate People’s Court has issued formal notices to both Sanan Electronics and Sanan Group regarding these two bankruptcy reorganization applications. However, as of the date of this announcement, Sanan Electronics and Sanan Group have not yet received official rulings from the Xiamen Intermediate People’s Court accepting their respective reorganization petitions, leaving uncertainty as to whether the court will formally accept these applications and whether Sanan Electronics and Sanan Group will subsequently enter into bankruptcy reorganization proceedings.

Shareholding, pledges, and freezes

As of the date of this announcement, the company’s controlling shareholder, Sanan Electronics, holds 1,129,911,084 shares, while the indirect controlling shareholder, Sanan Group, holds 182,359,796 shares. Together, the two shareholders collectively hold 1,312,270,880 shares, representing 26.30% of the company’s total share capital.

Sanan Electronics has pledged a cumulative total of 624,800,000 shares, whereas Sanan Group has pledged 169,344,914 shares, bringing the combined total of pledged shares to 794,144,914—equivalent to 60.52% of the shares held by both shareholders.

Notably, the scale of the freezes far exceeds the actual shareholdings of the controlling shareholders. The announcement indicates that the 1,312,270,880 shares held by Sanan Electronics and Sanan Group have been subject to judicial freezes, with an additional 8,213,360,199 shares currently under pending freeze, accounting for 625.89% of the shares held by the two shareholders and 164.63% of the company’s total share capital.

In its announcement, Sanan Optoelectronics emphasized that the company maintains independent and complete business operations and autonomous management capabilities. The company is operationally, personnel‑wise, asset‑wise, financially, and institutionally independent from its controlling shareholders, and current production and business activities remain normal.

Creditors shift from individuals to institutions

This marks the second bankruptcy reorganization application targeting Sanan Electronics and Sanan Group this year.

In June of this year, individual creditor Lin Suzhen had filed with the Xiamen Intermediate People’s Court a petition for bankruptcy reorganization of both Sanan Electronics and Sanan Group; however, on September 2, the petition was withdrawn with the court’s approval, leading market observers to believe that debt pressures had eased somewhat and that room existed for negotiation and settlement between the parties.

In contrast, the latest reorganization filings come from state‑owned entities based in Hubei and Hunan, signaling a shift from individual creditors to institutional creditors with state‑owned backing, thereby indicating an escalation in the hierarchy of claimants against the Sanan group’s controlling shareholders.

The decision by these two provincial state‑owned entities to pursue reorganization through judicial channels underscores that, at this stage, no mutually agreed debt‑repayment plan has yet been reached between the state‑owned creditors and Sanan Electronics or Sanan Group, prompting them to resort to bankruptcy reorganization as a legal avenue. Nevertheless, this does not preclude the possibility of future negotiations.

The case involving the actual controller serves as one backdrop to this wave of recovery efforts. In March 2026, Lin Xiucheng, the actual controller of Sanan Optoelectronics, was placed under detention and investigation by supervisory authorities; on September 24, the company announced that he had been criminally detained by public security organs on suspicion of embezzlement and misappropriation of funds. Additionally, in April this year, Lin Kechuang, Vice Chairman and General Manager of Sanan Optoelectronics, was also subjected to detention and investigation, only to be released and resume his duties on October 5.

With the interplay of factors—including the actual controller’s case, the controlling shareholders’ debts, share freezes, and bankruptcy reorganization applications—the level of governance‑related uncertainty surrounding the “Sanan group” remains high. Although Sanan Optoelectronics has consistently emphasized its operational independence in previous announcements, should this bankruptcy reorganization application be officially accepted by the court, the subsequent handling of the controlling shareholders’ listed shares and whether such a move triggers changes in controlling interest could significantly impact the future direction of Sanan Optoelectronics’ governance structure.