A polyester giant founded in 1980 now stands on the brink of delisting. Sanfangxiang received a 'disclaimer of opinion' on its 2025 annual report and an 'adverse internal control opinion,' triggering dual delisting risk warnings, while controlling shareholder shares face judicial auction. This is not an isolated case but the first flagship company to fall in the bursting bubble of PET bottle chip overcapacity.
The Cost of Overcapacity
Sanfangxiang's plight stems from severe supply-demand imbalance in the PET bottle chip industry. According to industry public data, domestic PET bottle chip capacity surged from 2023 to 2024, exceeding 20 million tons per year, while market demand was only 12 million tons per year. The supply-demand gap of 8 million tons has persistently compressed product spreads, dragging the entire industry into a 'volume up, profit down' quagmire.
As the second-largest producer, Sanfangxiang acquired Hailun Chemical for 7.35 billion yuan in 2020, shifting its main business to bottle-grade PET chips and PTA. In the first two years after acquisition, it posted profits of 630 million yuan in 2021 and 818 million yuan in 2022. But from 2023, the company suffered three consecutive years of losses totaling 1.628 billion yuan, with a loss of 885 million yuan in 2025 alone, widening year-on-year.
More critically, its industrial chain layout is too narrow. Sanfangxiang only covers the PTA-to-PET chip segment, heavily relying on external purchases for core raw material PX. When upstream PX prices rise, its weak cost control capability is exposed. In 2025, the company's trade business revenue fell 59.97% year-on-year to 1.713 billion yuan, directly reflecting sluggish market demand.
Chain Reaction of Debt and Guarantees
Beyond losses, Sanfangxiang faces a chain reaction of overdue guarantees. As of the latest announcement, cumulative overdue debts guaranteed by the company for its subsidiaries reached 522 million yuan, accounting for 10.82% of the most recent audited net assets. Among them, wholly-owned subsidiary Hailun Petrochemical added 25.6376 million yuan in overdue rent from a financial lease.
The company's accounts receivable from related parties stood at 3.561 billion yuan, but only 107 million yuan in bad debt provisions were accrued. Auditors explicitly stated they could not obtain sufficient audit evidence for the recoverability of these amounts. Controlling shareholder shares are frozen, and if disposed of, may lead to a change in actual control. The company's 600 million yuan related-party guarantee for the controlling shareholder has not recognized estimated liabilities—these numbers signal huge uncertainty.
Policy Intervention Brings a Turnaround
But the situation is not hopeless. In the second half of 2025, national authorities convened a symposium with leading PTA and bottle chip companies to discuss industry operations and project progress. Against the backdrop of supply-demand mismatch and thin margins, the symposium was seen as a key measure to prevent and resolve 'involution-style' competition.
Policy effects showed in Q1 2026: Sanfangxiang reported a net profit of 32.7409 million yuan, turning around from a loss. The Strait of Hormuz blockade this year caused a rebound in polyester chain product prices, improving margins. The company's stock price also rebounded, temporarily moving away from the 1-yuan delisting threshold.
However, rating agencies remain cautious. On June 26, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook, and downgraded its convertible bond to A-. In May 2026, controlling shareholder shares were put up for auction but postponed due to objections—the Sword of Damocles still hangs.
Supply Chain Implications
Sanfangxiang's crisis signals accelerated capacity elimination in the PET bottle chip industry. For downstream buyers in beverage packaging and chemical fiber textiles, short-term supply volatility and price uncertainty are likely. The profit distribution along the PTA chain is being reshaped—policy intervention may push out backward capacity, benefiting companies with integrated operations and strong cost control.
Foreign trade firms should monitor anti-dumping risks against Chinese polyester products. Overcapacity has driven massive exports, triggering trade frictions in multiple countries. Sanfangxiang's case may accelerate overseas buyers' credit checks on Chinese suppliers.