With cumulative losses exceeding 1.6 billion yuan over three consecutive years, a 2025 annual report receiving both a 'disclaimer of opinion' and an 'adverse internal control opinion', and controlling shareholder shares being auctioned, Sanfangxiang—a polyester giant founded in 1980—now stands on the brink of delisting.
This is not an isolated case. It exposes the harsh reality of severe overcapacity and extreme profit compression across the entire polyester bottle chip industry. When the second-largest player in the sector reaches this point, the plight of smaller enterprises is even more dire.
Capacity Overcapacity: A Supply-Demand Mismatch of 20 Million vs. 12 Million Tons
Sanfangxiang's crisis traces back to a 2020 'snake-swallowing-elephant' acquisition. At that time, its original textile printing and dyeing business was shrinking. The company, with a market cap of 3.4 billion yuan, acquired Hailun Chemical—which had 20 times its revenue—shifting its main business to bottle-grade polyester chips and PTA. In the first two years after the acquisition, profits grew steadily, reaching 818 million yuan. But from 2023 onward, the industry landscape turned sharply.
According to China Customs and public industry data, from 2023 to 2024, domestic polyester bottle chip capacity was released intensively, with total capacity exceeding 20 million tons per year, while market demand stood at only about 12 million tons. The supply-demand gap reached 8 million tons, and product spreads shrank continuously. Sanfangxiang, as the second-largest producer, did not escape the 'involution' trap: capacity increased, but profits were dragged down. It lost 487 million yuan in 2024 and 885 million yuan in 2025.
More critical was the structural deficiency in its industrial chain. Sanfangxiang only covers the PTA-to-polyester bottle chip segment, and its core raw material, PX, is heavily dependent on external purchases. Its cost control capability is weak; once upstream PX prices rise, profits are quickly squeezed. In 2025, the company's trading business revenue fell nearly 60% year-on-year, directly reflecting the fragility of this single-chain structure.
Debt Chain Reaction: Guarantee Overdue and Inadequate Provisioning
Beyond the main business losses, Sanfangxiang faces a cascade of guarantee overdue risks. As of the latest announcement, the company's cumulative overdue debts from guarantees for subsidiaries reached 522 million yuan, accounting for 10.82% of net assets. Among them, a 290 million yuan financial lease from wholly-owned subsidiary Hailun Petrochemical saw some lease payments overdue, forcing the company to seek rollover extensions.
More worrying is the accounts receivable risk. At the end of 2025, the company's accounts receivable from related parties reached 3.561 billion yuan, but only 107 million yuan in bad debt provisions were accrued. The accounting firm explicitly stated that it could not obtain sufficient appropriate audit evidence regarding the recoverability of these amounts. This implies that a portion of receivables may eventually become bad debts, further eroding the already fragile net assets.
Controlling shareholder shares have been frozen; if subsequently disposed of through judicial process, actual control of the company could change. The company has not recognized a provision for a 600 million yuan related-party guarantee provided to the controlling shareholder. Behind these numbers lies immense uncertainty—for buyers and partners, this directly threatens supply chain stability.
Anti-Involution Policy Shows Early Results, But Root Cause Remains
In the second half of 2025, relevant national authorities convened a symposium with leading PTA and bottle chip enterprises to discuss industry operations and ongoing project progress. Against the backdrop of supply-demand mismatch and razor-thin margins, this meeting was widely seen within the industry as a crucial step to prevent and resolve 'involution-style' competition.
The policy intervention showed early results in Q1 2026: Sanfangxiang achieved a net profit of 32.74 million yuan, turning around from a loss. Meanwhile, influenced by geopolitical tensions in the Strait of Hormuz, polyester chain product prices rebounded, and profit margins recovered. The company's stock price also temporarily moved away from the 1-yuan delisting warning line.
However, the fundamental problem of overcapacity remains unresolved. In June 2026, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook. Although the controlling shareholder's share auction was temporarily suspended due to enforcement objections, the 'sword of Damocles' hanging overhead has not disappeared.