A veteran polyester enterprise founded in 1980 is now teetering on the edge of delisting. Sanfangxiang received an 'adverse opinion' and 'internal control negative opinion' on its 2025 annual report, triggering a dual delisting risk warning. This is not merely a single company's financial crisis but a concentrated test of corporate viability amid severe overcapacity in the polyester bottle chip industry.
Industry Supply-Demand Imbalance: Capacity Nearly Double Demand
The polyester bottle chip sector experienced a concentrated capacity release between 2023 and 2024. According to industry public data, domestic capacity exceeded 20 million tons per year, while end-user demand was only 12 million tons per year, creating a supply-demand gap of nearly 8 million tons. This implies an industry utilization rate below 60%, with substantial capacity idle or operating inefficiently.
The direct consequence of overcapacity is the continuous erosion of product price spreads. Sanfangxiang, as the second-largest producer in the industry, also increased capacity investment during this expansion round. However, the result was severe profit compression. From 2023 to 2025, the company recorded three consecutive years of losses, with cumulative losses reaching 1.628 billion yuan. In 2025 alone, losses amounted to 885 million yuan, marking a significant year-on-year expansion.
This dilemma of 'increased production without increased profit' stems from price wars triggered by supply-demand imbalance. When all leading players are expanding capacity while downstream demand growth remains sluggish, product prices inevitably come under pressure. The profitability of the polyester bottle chip industry is highly correlated with the upstream PTA cycle, but Sanfangxiang's industrial chain covers only the PTA-to-bottle chip segment, relying entirely on external purchases for the core raw material PX. This leaves the company with weak cost control capabilities.
Corporate Financial Risks: Guarantee Defaults and Receivables Uncertainty
Beyond operating losses, Sanfangxiang faces multiple financial risks. As of the latest announcement, the company's cumulative overdue debts for guarantees provided to subsidiaries reached 522 million yuan, accounting for 10.82% of the most recently audited net assets. Among these, Hailun Petrochemical, a wholly-owned subsidiary, failed to pay 25.6376 million yuan in rent to Taiping石化 Financial Leasing, for which the company provided irrevocable joint liability guarantees.
Even more concerning is the accounts receivable issue. As of the end of the 2025 fiscal year, the company's receivables from related parties amounted to 3.561 billion yuan, yet the accumulated provision for bad debts was only 107 million yuan. The auditors explicitly stated that they could not obtain sufficient and appropriate audit evidence regarding the recoverability of these amounts. This means that if large-scale bad debts occur, it could severely impact the company's net assets.
The controlling shareholder, Sanfangxiang Group Co., Ltd., and Jiangsu Sanfangxiang International Trade Co., Ltd., have had their shares frozen by judicial authorities. If subsequent judicial disposal occurs, it could lead to a change in the company's actual control. The company has not recognized a liability for a 600 million yuan related-party guarantee provided to the controlling shareholder, further amplifying the risk exposure.
Government Intervention: Anti-Involution Brings Short-Term Relief
Facing vicious industry competition, the national government has begun to intervene. In the second half of 2025, relevant national departments convened a symposium with leading PTA and bottle chip enterprises to discuss industry operations and ongoing project progress. Against the backdrop of supply-demand mismatch and thin profit margins, this symposium was seen within the industry as a significant move to prevent and resolve 'involution-style' competition.
The effects of the intervention became apparent in the first quarter of 2026. Sanfangxiang achieved a net profit of 32.7409 million yuan, turning losses into profits year-on-year. The blockade of the Strait of Hormuz this year drove a significant rebound in polyester chain product prices, improving profit margins. The company's stock price also rebounded to some extent, temporarily moving away from the 1-yuan delisting 'warning line.'
However, short-term relief does not equate to long-term safety. On June 26, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook. In May 2026, the controlling shareholder's shares were scheduled for public auction, which was postponed due to an execution objection, but the 'sword of Damocles' hanging overhead has not disappeared.
Single-Chain Vulnerability: The Fatal Weakness of Cost Control
Sanfangxiang's crisis exposes the fatal flaw of an overly narrow industrial chain layout. The company covers only the PTA-to-bottle chip segment, relying entirely on external purchases for the core raw material PX. Once upstream PX prices rise, profits are squeezed to near zero. In 2025, the company's trading business revenue was 1.713 billion yuan, down 59.97% year-on-year, reflecting a high dependence on a single business line.
This 'both ends outside' industrial model carries extremely high risk in the current environment of volatile raw material prices. In contrast, other leading enterprises in the industry have already formed complete industrial chains from PX to PTA to polyester, giving them stronger cost control capabilities. Sanfangxiang's plight reminds the industry: in an era of overcapacity, the scale advantage of a single link is no longer sufficient to withstand systemic risks.