A veteran polyester giant with 46 years of history is teetering on the brink of delisting.
Sanfangxiang's 2025 annual report received a 'disclaimer of opinion' and an 'adverse internal control opinion' from auditors, triggering a double delisting risk warning. This is not merely a financial issue but the first domino to fall after years of unchecked capacity expansion in the PET bottle chip sector.
The Backlash of Overcapacity
Sanfangxiang's losses are staggering: from 2023 to 2025, cumulative losses reached 1.628 billion yuan, with 2025 alone accounting for 885 million yuan. Its trading revenue plummeted 59.97% year-on-year to 1.713 billion yuan.
The root cause lies in severe supply-demand imbalance. From 2023 to 2024, China's PET bottle chip capacity surged past 20 million tons per year, while downstream demand was only 12 million tons. Over 8 million tons of capacity remained idle or underutilized. As the industry's second-largest producer, Sanfangxiang expanded alongside the cycle, only to see profits devoured by the ensuing price war.
A deeper issue is its narrow industrial chain. The company only covers the PTA-to-PET bottle chip segment, relying entirely on external purchases for its core raw material, PX. After acquiring Hailun Chemical for 7.35 billion yuan in 2020, it shifted focus to bottle-grade polyester chips and PTA. But any upstream PX price hike instantly squeezes margins. This 'midstream' positioning offers no defense against volatile raw material costs.
Hidden Mines: Guarantees and Receivables
Beyond operating losses, Sanfangxiang bears significant contingent liabilities. As of the latest filing, overdue debts under guarantees for subsidiaries reached 522 million yuan, accounting for 10.82% of the company's latest audited net assets. Its wholly-owned subsidiary, Hailun Petrochemical, missed a 25.6376 million yuan lease payment, triggering the company's joint liability.
More alarming is the related-party receivables issue. As of the end of the 2025 reporting period, receivables from related parties stood at 3.561 billion yuan, but only 107 million yuan in bad debt provisions were recorded. Auditors explicitly stated they could not obtain sufficient evidence regarding the recoverability of these amounts. If these receivables prove uncollectible, the company's net assets could shrink dramatically.
Shares held by the controlling shareholder, Sanfangxiang Group, and Jiangsu Sanfangxiang International Trade have been frozen. A public auction of these shares in May 2026 was temporarily halted due to an execution objection, but the 'sword of Damocles' remains.
Can Anti-Involution Policies Save It?
In the second half of 2025, national authorities held a symposium with leading PTA and bottle chip enterprises to discuss industry operations and project progress. Against a backdrop of supply-demand mismatch and razor-thin margins, the meeting was widely seen as a key move to prevent 'involutionary' competition and stabilize the industry.
The policy's initial impact showed in Q1 2026: Sanfangxiang posted a net profit of 32.7409 million yuan, turning profitable year-on-year. Additionally, the Strait of Hormuz blockade led to a significant price rebound in the polyester chain, improving margins. The company's stock price temporarily moved above the 1-yuan delisting threshold.
But short-term recovery does not mean long-term safety. On June 26, 2026, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook, and downgraded its convertible bond rating to A-. This shows that financial institutions remain deeply concerned about its debt-servicing ability and going-concern status.
Industry Lessons
Sanfangxiang's crisis is essentially a 'clearing event' triggered by PET bottle chip overcapacity. In a zero-sum market, companies with a single production link and reliance on external raw materials are the most vulnerable. In contrast, fully integrated players with a 'PX-PTA-polyester' chain enjoy natural advantages in raw material self-sufficiency and cost control.
For the textile and chemical fiber industry, this case sends a clear signal: the era of capacity expansion dividends is over. Future competition will hinge on industrial chain completeness, cost control, and cash flow management.