After being suspended for three months, the bankruptcy reorganization application filed by Sanan Optoelectronics’ controlling shareholder has been withdrawn.

On the evening of September 2, Sanan Optoelectronics (600703) issued an announcement stating that it had recently received notice from its controlling shareholder, Xiamen Sanan Electronics Co., Ltd. (referred to as “Sanan Electronics”), that Lin Suzhen, a creditor of Sanan Electronics and its indirect controlling shareholder, Fujian Sanan Group Co., Ltd. (referred to as “Sanan Group”), has filed with the Intermediate People’s Court of Xiamen City, Fujian Province (referred to as “Xiamen Intermediate Court”) to withdraw her application for bankruptcy reorganization against both Sanan Electronics and Sanan Group. The Xiamen Intermediate Court has now ruled to approve Lin Suzhen’s withdrawal of the aforementioned bankruptcy reorganization application.

Sanan Optoelectronics stated that the company maintains independent and complete business operations and autonomous management capabilities, and is independently operated from its controlling shareholder in terms of business, personnel, organizational structure, assets, and finances. At present, the company’s production, operations, and management are proceeding normally.

The specific reasons for this withdrawal were not disclosed in the announcement.

Looking back, on June 11 and 12 this year, Sanan Optoelectronics issued two consecutive announcements revealing that Lin Suzhen, a creditor of both controlling shareholder Sanan Electronics and indirect controlling shareholder Sanan Group, had submitted applications to the Xiamen Intermediate Court seeking bankruptcy reorganization for both companies.

At that time, Sanan Electronics held 1.13 billion shares of Sanan Optoelectronics, representing 22.65% of the company’s total share capital, of which approximately 625 million shares had been pledged and repeatedly subject to queued freezes. Meanwhile, Sanan Group held about 182 million shares of Sanan Optoelectronics, accounting for 3.66% of the company’s total share capital, with 169 million shares pledged and similarly subjected to multiple rounds of freezing orders.

In its earlier announcements, Sanan Optoelectronics noted that if the court formally accepted the bankruptcy reorganization applications, the subsequent entry of Sanan Group and Sanan Electronics into bankruptcy reorganization proceedings could potentially impact Sanan Optoelectronics’ equity structure and control. In its semi-annual report released just days ago, the company also indicated that these matters would not yet have a significant impact on the company’s control or corporate governance; however, should the frozen shares remain unresolved and the bankruptcy reorganization applications be officially accepted by the court, it could pose risks to the stability of the company’s equity structure and control.

This withdrawal of the bankruptcy reorganization applications marks the first substantial turning point in the shadow of the controlling shareholders’ impending bankruptcy reorganization that had loomed over Sanan Optoelectronics for some time.

The most immediate effect of withdrawing the reorganization applications is that, in the short term, the controlling shareholders will no longer face forced disposals of their equity holdings due to the bankruptcy reorganization process, significantly reducing risks to the stability of the company’s equity structure and control. However, liquidity pressures at the controlling shareholder level and the ongoing freeze on equity holdings will not automatically lift as a result. Moreover, since only one creditor has withdrawn their application, it remains possible that other creditors may file similar requests in the future.

Meanwhile, the company’s financial performance continues to face pressure. In the first half of 2026, Sanan Optoelectronics reported revenue of RMB 6.468 billion, down 28.04% year-on-year; net profit attributable to shareholders was negative RMB 97.9045 million, a year-on-year decline of 155.47%.

Specifically, the LED epitaxial chip business generated RMB 3.103 billion in revenue, up 11.81% year-on-year; the LED application products segment recorded RMB 1.683 billion in revenue, up 17.62% year-on-year; while the integrated circuit products segment reported RMB 1.268 billion in revenue, down 15.40% year-on-year. During the reporting period, the company’s overall LED business remained profitable, whereas its IC business incurred losses.

(Image source: Sanan Optoelectronics’ semi-annual report)

The company also announced the latest developments regarding its share‑increase plan. According to an announcement released on August 31, due to Vice Chairman and General Manager Lin Kechuang being placed under detention measures, he was unable to execute the planned share‑increase initiative. With the deadline approaching, Chairman Lin Zhiqiang stepped in to complete the increase on behalf of the General Manager, maintaining the same amount and timeframe as originally scheduled.

On August 31, 2026, Lin Zhiqiang used the centralized bidding trading system to purchase an additional 770,000 shares, representing approximately 0.02% of the company’s total share capital, for a total investment of RMB 9.977 million. As of the date of the announcement, Lin Zhiqiang had cumulatively increased his holdings by 3.57 million shares, equivalent to roughly 0.07% of the company’s total share capital, with a cumulative investment totaling RMB 49.8578 million. This round of share‑increases has thus been fully completed.