A polyester leader that started in 1980 now stands on the brink of delisting. Sanfangxiang's plight is not an isolated case but a microcosm of the overcapacity and profit erosion plaguing the entire PET bottle chip sector. With its 2025 annual report receiving a 'disclaimer of opinion' and an 'adverse internal control opinion', the company faces dual delisting risk warnings. The controlling shareholder's shares are up for judicial auction. These signals force the market to re-examine the supply-side contradictions in the chemical fiber industry.
The Price of Overcapacity
Sanfangxiang's loss trajectory starkly reveals the cruelty of the industry cycle. From 2023 to 2025, the company accumulated a staggering loss of 1.628 billion yuan, with a single-year loss of 885 million yuan in 2025, significantly widening the loss scale. The core reason is the severe supply-demand imbalance in the PET bottle chip industry: domestic capacity exceeds 20 million tons per year, while downstream demand is only about 12 million tons per year. This nearly 8-million-ton surplus has directly crushed product price spreads.
As the second-largest player in the industry, Sanfangxiang shifted its main business to bottle-grade polyester chips and PTA after a 'snake-swallows-elephant' acquisition of Hailun Petrochemical in 2020. The acquisition initially brought short-term profit growth—630 million yuan in 2021 and 818 million yuan in 2022. But the subsequent concentrated release of industry capacity meant that even a leader could not escape the 'more output, no profit' trap. This is a classic prisoner's dilemma: each manufacturer fears losing market share to competitors and is forced to expand, ultimately dragging the entire industry into losses.
The Risk of a Narrow Industrial Chain
A more fatal structural problem lies in Sanfangxiang's overly thin industrial chain layout. It only covers the link from PTA to PET bottle chips, relying entirely on external purchases for its core raw material, PX. Once upstream PX prices fluctuate, the weakness of its cost control capability is fully exposed. The 59.97% year-on-year decline in the company's trading business revenue in 2025 is a direct manifestation of this fragility.
In contrast, other integrated leaders in the industry, such as Hengli and Rongsheng, have built a complete 'PX-PTA-Polyester-Textile' chain, giving them significantly stronger risk resistance. Sanfangxiang's case serves as a warning to the industry: in a period of overcapacity, the advantage of specialization in a single link can quickly turn into a survival disadvantage. The shorter the industrial chain, the greater the room for profits to be squeezed by upstream and downstream.
Dual Minefields of Debt and Governance
Beyond operational losses, Sanfangxiang faces a chain reaction of guarantee defaults. As of the latest announcement, the company's cumulative overdue debt for guarantees to its subsidiaries has reached 522 million yuan, accounting for 10.82% of the most recent audited net assets. Among these, the overdue rent of 25.6376 million yuan from its wholly-owned subsidiary Hailun Petrochemical to Taiping石化 Financial Leasing requires the company to bear irrevocable joint liability.
More concerning is the risk of related-party transactions. As of the end of the 2025 reporting period, the company's accounts receivable from related parties amounted to a staggering 3.561 billion yuan, but the accumulated provision for bad debts was only 107 million yuan. The auditor explicitly stated that it could not obtain sufficient and appropriate audit evidence regarding the recoverable amount of these funds. The controlling shareholder's shares are under judicial freeze, and if subsequent disposal occurs, it could lead to a change in actual control. These figures point to major hidden dangers in corporate governance and financial transparency.
Turning Point and Uncertainty Under Anti-Involution Policies
In the second half of 2025, relevant national authorities held a symposium with leading PTA and bottle chip enterprises, which was seen by the industry as an important measure to prevent and resolve 'involution-style' competition. The initial effects of policy intervention appeared in Q1 2026: Sanfangxiang achieved a net profit of 32.7409 million yuan, turning a profit year-on-year. At the same time, geopolitical events like the blockade of the Strait of Hormuz pushed up prices in the polyester industrial chain, improving profit margins.
But a turnaround does not mean the crisis is over. On June 26, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook. Although the auction of the controlling shareholder's shares has been temporarily suspended due to an objection to enforcement, the risk of equity change remains unresolved. The fate of this legacy leader has effectively become a touchstone for observing the effectiveness of supply-side reforms in the chemical fiber industry.
Industry Lesson: From Scale Competition to Efficiency Competition
Sanfangxiang's predicament reflects a deep trend: China's chemical fiber industry is entering an 'efficiency competition' phase from a 'scale expansion' phase. Over the past two decades, leading enterprises relied on capacity expansion and cost advantages to achieve growth. But today, with widespread overcapacity, industrial chain completeness, cost control capability, and financial health have become new competitive dimensions.
For buyers, the financial stability of a supplier is now a more important consideration than price. A supplier facing delisting risk cannot guarantee delivery continuity or product quality. For small and medium-sized polyester enterprises, Sanfangxiang's case offers a clear survival roadmap: either extend upstream to build an integrated advantage, or establish an irreplaceable technical barrier in a niche segment; otherwise, they will be eliminated in the industry shakeout.