CSRC Investigates Lianchuang Optoelectronics, Controller Accused of Undisclosed Fund Flows; Shares Down 63.84%

On August 5, Lianchuang Optoelectronics disclosed multiple risk announcements covering a CSRC investigation, debt defaults, and partial judicial freezing of controlling shareholder shares. The announcements said the company and its actual controller Wu Rui are suspected of failing to disclose non-operating fund flows as required, and the related investigation has not yet reached a determination of violations. The stock hit the daily limit-down on August 5 and 6. As of the close on August 7, shares stood at RMB 22.8, down 63.84% year-to-date. In January 2026, the stock had traded as high as RMB 78.76.

As of the end of the second quarter of 2026, three public funds held significant positions in Lianchuang Optoelectronics, with each position exceeding RMB 10 million. Yongying Manufacturing Upgrade Smart Selection cut its position substantially in the second quarter but still held 2.16 million shares. Bank of Communications Growth and Chuangjin Hexin Carbon Neutral increased their holdings in the second quarter, with the former adding over multiple consecutive quarters. Lianchuang Optoelectronics entered Bank of Communications Growth's top-ten holdings at the end of the third quarter of 2025 with approximately 1.44 million shares, rose to 2.09 million shares in the fourth quarter of 2025, became the fund's largest holding at 2.52 million shares at the end of the first quarter of 2026, and further increased to 3.08 million shares in the second quarter of 2026.

In October 2025, the Jiangxi bureau of the CSRC issued warning letters to Lianchuang Optoelectronics and Wu Rui after misstatements in the financial reports of associate company Lianchuang Superconducting distorted accounting items including long-term equity investment and investment income. Wu Rui, as chairman, was found to bear primary responsibility. In late April 2026, when the company released its 2025 annual results, Zhonghua Certified Public Accountants issued a qualified opinion on its financial statements. In a May research briefing, the company responded that some business operations fall within classified scope, and relevant materials cannot be fully disclosed externally or sufficiently provided to auditors, preventing the auditor from carrying out subsequent audit review procedures.

On operating metrics, in the first quarter of 2026, Lianchuang Optoelectronics' revenue fell 23.63% year-on-year and net profit declined 28.8%. The company said market conditions and the international situation reduced demand from some customers, while higher raw material prices squeezed gross margins. Delays in order confirmations from some customers also had a material impact on the period's profit.