A veteran polyester leader that started in 1980 now stands on the brink of delisting. Sanfangxiang (*ST Sanfang) received adverse audit opinions and internal control negation for its 2025 annual report, triggering dual delisting risk warnings. The controlling shareholder's shares are being auctioned. The root cause is two years of severe overcapacity in the polyester bottle chip industry.
Background Based in Jiangyin, Jiangsu, Sanfangxiang listed on the A-share market in 2003. In 2020, it acquired Hailun Chemical for 7.35 billion yuan, shifting its main business from textile printing and dyeing to bottle-grade polyester chips and PTA. Profits grew briefly after the acquisition—630 million yuan in 2021 and 818 million yuan in 2022—but then plummeted, with cumulative losses of 1.628 billion yuan over three years, including 885 million yuan in 2025 alone.
The core issue is severe supply-demand imbalance in the polyester bottle chip sector. Industry data shows that from 2023 to 2024, domestic capacity surged past 20 million tons per year, while demand was only 12 million tons, resulting in capacity utilization below 60%. As the second-largest producer, Sanfangxiang chose to expand capacity anyway, only to see profits eroded by price wars. Its industrial chain is too narrow, covering only the PTA-to-bottle chip segment, with the key raw material PX entirely purchased externally. When PX prices rose, margins were squeezed to near zero. In 2025, the company's trading revenue fell 59.97% year-on-year to 1.713 billion yuan.
Industry Impact Sanfangxiang's plight is not an isolated case but a microcosm of overcapacity across the polyester chain. PTA and bottle chip leaders all rushed to expand capacity from 2023 to 2025, dragging the industry into extreme competition, with profits closely tied to the PTA cycle. Government intervention has begun: in the second half of 2025, authorities held a symposium with major PTA and bottle chip producers to discuss operations and projects, widely seen as a move to curb vicious competition.
In Q1 2026, Sanfangxiang turned profitable with 32.74 million yuan in net profit, partly due to price rebounds triggered by the Strait of Hormuz blockade. However, debt risks remain high. As of the latest announcement, overdue guaranteed debts for subsidiaries reached 522 million yuan, accounting for 10.82% of net assets. The controlling shareholder's shares are frozen, and if auctioned, control could change. Lianhe Credit Rating downgraded Sanfangxiang's rating to A- in June 2026, with a negative outlook.
For the industry, this case sends a clear signal: the era of relying solely on capacity expansion to grab market share is over. Polyester bottle chip overcapacity will take time to digest. Only companies with complete industrial chains (extending to PX), differentiated products, or strong cost control can survive the downturn.