Sanan Optoelectronics and Azure Lithium Core Receive Government Subsidies

On October 8, LED chip-related companies Sanan Optoelectronics and Azure Lithium Core successively announced government subsidies.

Sanan Optoelectronics: Received approximately 10.4 million yuan in government subsidies

Sanan Optoelectronics announced that from July 1, 2024, to September 29, 2024, the company and its subsidiaries received government subsidies related to income, which did not trigger information disclosure obligations or meet disclosure standards, totaling approximately 10.40 million yuan.

Specifically, Wuhu Anrui Optoelectronics Co., Ltd. received a tax refund of RMB 1.6015 million on July 19, 2024; Xiamen Sanan Integrated Circuit Co., Ltd. received subsidies for various other expenses amounting to RMB 2.248 million on August 8, 2024; and Quanzhou Sanan Semiconductor Technology Co., Ltd. received various awards, including the Science and Technology Progress Award and the Excellent Product Award, totaling RMB 1 million on September 18, 2024.

The above-mentioned subsidies total RMB 10.4 million. Sanan Optoelectronics expects that the amount of deferred revenue transferred to other income in the third quarter of 2024 will be RMB 133.89 million. The combined total is approximately RMB 144.29 million, accounting for 39.36% of the net profit attributable to shareholders of the listed company in the most recent audited period.

Sanan Optoelectronics stated that the company classifies the aforementioned government subsidies in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 16 - Government Grants" and recognizes and measures them separately according to accounting standards. This will have a positive impact on the company's profit and loss in the third quarter of 2024. The specific accounting treatment and its impact on the company for the current year will be subject to the final results confirmed by the annual auditing institution.

Azure Lithium Core: Received government subsidy funds totaling RMB 17.3635 million

Azure Lithium Core announced that its wholly-owned subsidiary, Tianpeng Lithium Energy Technology (Huai'an) Co., Ltd. (hereinafter referred to as "Tianpeng Lithium Energy"), recently received industrial support funds totaling RMB 10 million from the Finance and Asset Management Bureau of the Qingjiangpu Economic Development Zone in Huai'an, Jiangsu Province. Meanwhile, its holding subsidiary, Huai'an Aoyang Shunchang Optoelectronics Technology Co., Ltd. (hereinafter referred to as "Huai'an Optoelectronics"), also recently received municipal and district-level enterprise subsidy funds amounting to RMB 7.3635 million from the Financial Payment Center of Qingjiangpu District, Huai'an City.

According to the relevant provisions of "Accounting Standards for Business Enterprises No. 16 - Government Grants", government grants related to assets refer to government grants used to purchase, construct, or otherwise form long-term assets. The grant received this time belongs to local government support for corporate Industry investment and is classified as a government grant related to assets.

When Azure Lithium Core receives government grants related to assets, it recognizes them as deferred income; when receiving government grants related to income, based on the substance of the economic transaction, it records them in other income or offsets related costs and expenses. This grant totals 17.3635 million yuan, all of which will be recorded as deferred income.

Azure Lithium Core stated that the government grant funds will be recognized in profit or loss in installments over the useful life of the relevant assets. According to the company's accounting policy, the useful life of the main machinery and equipment of Tianpeng Lithium Energy and Huai'an Optoelectronics is 10 years, which is expected to increase the company's total annual profit by 1.73635 million yuan, having a positive impact on operations and profits in subsequent years.

Source: Compiled by LEDinside