A veteran polyester giant with over four decades of history is teetering on the brink of delisting. Sanfangxiang received a 'disclaimer of opinion' and 'adverse internal control opinion' on its 2025 annual report, triggering dual delisting risk warnings, while controlling shareholder shares face judicial auction. The Jiangyin-based company, which transformed into a polyester bottle chip producer via a 2020 acquisition, now finds itself mired in three consecutive years of losses exceeding 1.6 billion yuan.
The Profit Black Hole of Capacity Bubbles
Industry public data shows that between 2023 and 2024, domestic polyester bottle chip capacity was unleashed intensively, with total capacity exceeding 20 million tons per year against downstream demand of only 12 million tons. The supply-demand gap of 8 million tons has continuously compressed product spreads, dragging the entire industry into price wars. As the second-largest domestic producer, Sanfangxiang was not spared—from 2023 to 2025, the company posted losses of approximately 250 million, 487 million, and 885 million yuan respectively, with losses expanding year by year.
More concerning is the company's single-chain layout, covering only the PTA-to-polyester bottle chip segment, with core raw material PX entirely dependent on external purchases. Once upstream PX prices rise, the weakness in cost control is immediately exposed. In 2025, the company's trading business revenue plummeted 59.97% year-on-year to just 1.713 billion yuan, further confirming the vulnerability of a single link in the industry chain.
Debt Dominoes and Audit Dilemmas
Beyond operating losses, Sanfangxiang faces a chain of guarantee defaults. 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 net assets. Notably, wholly-owned subsidiary Hailun Chemical failed to pay 25.6376 million yuan in due rent under a financial lease, triggering the joint liability guarantee. The company's accounts receivable from related parties amounted to 3.561 billion yuan, but only 107 million yuan in bad debt provisions were made, with auditors explicitly stating they could not confirm recoverability.
Shares held by the controlling shareholder Sanfangxiang Group and its affiliates have been judicially frozen. If subsequently disposed of, actual control of the company may change. In June 2026, Lianhe Credit Rating downgraded the company's long-term credit rating to A- with a negative outlook. These numbers reflect serious red flags in both corporate governance and financial transparency.
Policy Intervention and Industry Turning Point
Yet the crisis is not without a silver lining. In the second half of 2025, national authorities convened a symposium with PTA and bottle chip leaders to discuss industry operations and ongoing project progress. Against the backdrop of supply-demand mismatch and razor-thin margins, the meeting was widely regarded as a policy signal to prevent and resolve 'involutionary' competition. In the first quarter of 2026, Sanfangxiang achieved net profit of 32.7409 million yuan, turning profitable quarter-on-quarter, with industry margins also boosted by external events such as the Strait of Hormuz blockade.
But turning profitable does not mean out of danger. Although the controlling shareholder's share auction has been temporarily halted due to enforcement objections, the 'Sword of Damocles' remains suspended overhead. The company's core issues—over-reliance on a single industry chain link, weak bargaining power for raw materials, and high related-party transaction risks—remain fundamentally unresolved.
Three Lessons for the Industry
Sanfangxiang's predicament is essentially a microcosm of the polyester bottle chip industry's transition from quantitative to qualitative overcapacity. When industry-wide capacity utilization falls below 60%, any cost control weakness becomes magnified. For polyester companies currently expanding capacity, this serves as a clear warning: scale is no longer a moat; vertical integration and cost control are the keys to survival.