With three consecutive years of cumulative losses exceeding 1.6 billion yuan, a 2025 annual report receiving 'disclaimer of opinion' and 'internal control adverse opinion', and controlling shareholder shares under judicial auction, Sanfangxiang—a veteran polyester enterprise founded in 1980—now stands at the edge of delisting. This is not an isolated case but a microcosm of severe overcapacity and price wars in the polyester bottle chip industry.
Overcapacity is the root of losses
Sanfangxiang's troubles began with a 'snake-swallowing-elephant' transformation. In 2020, the company, originally focused on textile printing and dyeing, acquired Hailun Chemical for 7.35 billion yuan, shifting its main business to PTA and polyester bottle chips. Profits peaked at 818 million yuan in the first two years post-acquisition but plummeted from 2023 onward. Industry data shows that from 2023 to 2024, domestic polyester bottle chip capacity was intensively released, with total capacity exceeding 20 million tons per year, while market demand was only about 12 million tons per year—a supply-demand gap of 8 million tons.
As the second-largest player, Sanfangxiang joined the expansion race. Capacity increased, but product spreads were continuously compressed, and profits were 'cannibalized' by competition. In 2024, losses hit 487 million yuan; in 2025, they expanded to 885 million yuan, with trading revenue falling nearly 60%. This is a classic case of 'volume up, profit down'—when the entire industry fights for market share, price wars become the only weapon.
Single-chain vulnerability amplifies risk
More critically, Sanfangxiang's industrial chain layout is too thin. It covers only the PTA-to-polyester bottle chip segment, relying entirely on external purchases for the core raw material PX. Once upstream PX prices rise, the weakness in cost control is exposed. By 2025, overdue debts guaranteed by the company for subsidiaries reached 522 million yuan, accounting for 10.82% of net assets. Meanwhile, accounts receivable from related parties stood at 3.561 billion yuan, with only 107 million yuan in bad debt provisions—auditors could not confirm recoverability.
This 'single-link plus high leverage' structure amplifies profits during booms but triggers chain reactions during downturns. Controlling shareholder shares are frozen; if disposed, the company's actual control could change, adding further uncertainty.
Policy intervention offers a breather
The industry is not without self-rescue efforts. In the second half of 2025, national authorities convened a symposium of PTA and bottle chip leading enterprises to discuss project progress and industry operations. Against a backdrop of supply-demand mismatch and thin margins, the meeting was seen as a signal to prevent 'involution-style' competition. In Q1 2026, Sanfangxiang achieved a net profit of 32.74 million yuan, turning around from a loss. This reflects both policy-driven supply-demand improvement and external factors like the Strait of Hormuz blockade boosting polyester product prices.
But turning profitable doesn't mean escaping trouble. Although the stock price temporarily left the 1-yuan delisting warning line, Lianhe Credit Rating has downgraded its long-term credit rating to A- with a negative outlook. The controlling shareholder's equity auction is on hold due to execution objections, but the 'sword of Damocles' remains.
Implications for the supply chain
Sanfangxiang's case sounds an alarm for the entire polyester industry: capacity expansion cannot be divorced from demand fundamentals, and industrial chain depth is the true profit moat. For companies relying on a single link and dependent on external raw materials, there is almost no defense once the industry enters a downturn.