A 46-year-old veteran polyester company is on the verge of delisting. Sanfangxiang, a chemical fiber leader from Jiangyin, received a 'disclaimer of opinion' and an 'adverse internal control opinion' on its 2025 annual report, triggering dual delisting risk warnings. Its controlling shareholder's shares are also facing judicial auction. The company's plight is not an isolated case but a microcosm of the deep involution across the entire polyester supply chain.
The cost of overcapacity
Sanfangxiang's loss trajectory closely mirrors the capacity cycle of the polyester bottle-grade chip industry. From 2023 to 2025, the company suffered three consecutive years of losses, totaling 1.628 billion yuan. In 2025 alone, losses expanded to 885 million yuan. Where did the money go? The answer lies in supply-demand data: domestic polyester bottle-grade chip capacity has exceeded 20 million tons per year, while market demand is only 12 million tons. The sharp contradiction has squeezed product spreads and severely compressed industry profits.
As the second-largest player in the sector, Sanfangxiang did not escape the negative effects of the capacity expansion wave. Capacity increased, but profits did not follow, dragging the company deeper into the mire. More critically, its industrial chain layout is too narrow. The company's operations only cover the segment from PTA to polyester bottle-grade chips, with core raw material PX entirely dependent on external purchases. Once upstream PX prices rise, the weakness in cost control is exposed, and profits are almost entirely eroded.
The chain of debt and guarantees
Beyond operating losses, Sanfangxiang faces a chain of risks from debt guarantees. As of the latest announcement, the company's overdue debt from guarantees provided to subsidiaries reached 522 million yuan, accounting for 10.82% of the latest audited net assets. Among them, its wholly-owned subsidiary Hailun Petrochemical failed to pay due rents under a finance lease, and the company, as the guarantor, bears joint liability.
More worrying is the financial black hole. As of the end of 2025, the company's accounts receivable from related parties amounted to 3.561 billion yuan, but only 107 million yuan in bad debt provisions had been accrued. Auditors explicitly stated they could not obtain sufficient evidence regarding the recoverability of these amounts. Shares held by the controlling shareholder and its affiliates have been frozen, and if subsequently disposed of, the company's actual control may change. Additionally, the company has not recognized estimated liabilities for a 600 million yuan related-party guarantee provided to the controlling shareholder—these figures hide enormous uncertainty.
The dawn of anti-involution and lingering shadows
The root of Sanfangxiang's crisis lies in industry 'involution,' and anti-involution policies may offer a glimmer of hope. In the second half of 2025, relevant national authorities held a symposium with leading PTA and bottle-chip companies, aiming to prevent vicious competition and promote stable industry operations. Against this backdrop, Sanfangxiang achieved a net profit of 32.74 million yuan in the first quarter of 2026, turning around from losses. Additionally, geopolitical tensions in the Strait of Hormuz led to a rebound in polyester supply chain product prices, temporarily easing the company's profit pressure.
However, the crisis is far from over. In May 2026, shares held by the controlling shareholder were put up for public auction, though the process was temporarily halted due to an enforcement objection. The 'sword of Damocles' hanging over the company remains. In June, Lianhe Credit Rating downgraded the company's issuer credit rating to A- with a negative outlook. Although the stock price has temporarily moved above the 1 yuan delisting threshold, the improvement in fundamentals will take time.