A veteran polyester enterprise, founded in 1980, now stands at the brink of delisting. Sanfangxiang's 2025 annual report received a 'disclaimer of opinion' and an 'adverse internal control opinion,' triggering dual delisting risk warnings, while the controlling shareholder's shares were put up for judicial auction. This is not just a single company's crisis but a microcosm of severe overcapacity in the PET bottle chip sector—domestic capacity has exceeded 20 million tons/year, against effective demand of only about 12 million tons, leaving a gap of 8 million tons.
Industrial Belt Reactions: The Jiangyin Sample Reflects an Industry-Wide Dilemma
Sanfangxiang is headquartered in Jiangyin, Jiangsu, a key agglomeration area for the national polyester chemical fiber industry. Its main business transformation is representative: in 2020, it acquired Hailun Chemical in a 'snake-swallowing-elephant' deal, shifting from printing and dyeing into PET bottle chips and PTA. The first two years after acquisition were profitable (net profit of 630 million yuan in 2021 and 818 million yuan in 2022), but from 2023 onward, it recorded three consecutive years of losses, with cumulative losses reaching 1.628 billion yuan, including a single-year loss of 885 million yuan in 2025.
The root of the loss lies in the price war during the period of concentrated capacity release. From 2023 to 2024, domestic PET bottle chip capacity jumped from about 15 million tons/year to over 20 million tons/year, while downstream demand from beverages and food packaging grew far slower. Product price spreads shrank continuously, and even the second-largest player in the sector could not escape. More critically, its industrial chain only covers the PTA-to-PET bottle chip segment, with the core raw material PX entirely dependent on external purchases, leaving cost control weak and profits squeezed by upstream price hikes.
Supply-Demand Structure: How Overcapacity Transmits to Corporate Credit
Sanfangxiang's debt risk is a direct reflection of overcapacity. As of the latest announcement, the company's cumulative overdue debt for subsidiary guarantees reached 522 million yuan, accounting for 10.82% of net assets. Subsidiaries like Hailun Petrochemical are unable to repay due financial lease rents, forcing the company to seek loan rollovers. Accounts receivable from related parties stood at 3.561 billion yuan, with only 107 million yuan in impairment provisions, and auditors explicitly stated they could not obtain sufficient evidence for recoverability.
In June 2026, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook. The controlling shareholder's shares are frozen, and subsequent disposal could trigger a change in actual control. These credit events will have a ripple effect on financing conditions for polyester enterprises in Jiangyin and surrounding areas—banks may tighten credit lines for similar firms, especially those with narrow industrial chains and heavy reliance on external raw materials.
Policy Transmission: Can Anti-Involution Become a Turning Point?
In the second half of 2025, national authorities held a symposium with leading PTA and bottle chip enterprises, seen as a signal to prevent and resolve 'involution-style' competition. Preliminary effects have emerged: in Q1 2026, Sanfangxiang posted a net profit of 32.74 million yuan, turning around from losses. Meanwhile, geopolitical events in the Strait of Hormuz drove a significant rebound in polyester chain product prices, improving profit margins.
But the sustainability of this turnaround depends on two factors: first, the speed of capacity exit. The current CR5 (top-five enterprise concentration) in the domestic PET bottle chip sector is about 60%, with leading players still expanding and small-to-medium capacity exiting slowly. Second, the volatility of raw material PX prices. Enterprises like Sanfangxiang that purchase PX externally remain exposed to upstream petrochemical cycles. If policy measures remain at the 'symposium' level without substantive production curbs, the industry's supply-demand improvement will be limited.
Practical Recommendations
For Buyers - Monitor the supply stability of Sanfangxiang and its affiliates, especially long-term contracts for bottle chips and PTA; consider diversifying purchases to higher-credit-rated leading enterprises. - Capitalize on the current low-profit cycle to negotiate short-term floating-price contracts with suppliers to lock in raw material cost advantages. - Closely track financing dynamics of polyester enterprises in the Jiangyin area; if banks tighten credit, it could trigger a regional supply contraction.
For Foreign Trade Enterprises - The Strait of Hormuz events have pushed up export prices for polyester products, but geopolitical risks may cause logistics delays; include force majeure clauses in contracts. - Focus on growing PET bottle chip demand in emerging markets like Southeast Asia and South Asia, where local capacity is insufficient and reliance on Chinese exports is high. - Use the window of RMB exchange rate volatility to lock in forward settlement for export orders, hedging against currency risks.
Sanfangxiang's crisis is not an isolated case. When overcapacity meets a narrow industrial chain, any cost fluctuation can be the last straw. Whether the industry's 'anti-involution' policy can truly drive capacity exit will determine whether this veteran enterprise achieves rebirth or faces delisting—and will shape the future landscape of the entire PET bottle chip chain.