The cost of overcapacity in the polyester bottle chip sector is accelerating. Sanfangxiang, an old polyester giant founded in 1980 and listed in 2003, faces delisting after its 2025 annual report received a 'disclaimer of opinion' and 'internal control adverse opinion.' The controlling shareholder's shares are pending judicial auction, overdue guarantee debts total 522 million yuan, and related-party receivables reach 3.561 billion yuan—behind these figures lies the systemic fragility of a company once reliant on scale expansion, now exposed by supply-demand imbalance.
Overcapacity as a 'Meat Grinder'
Sanfangxiang's plight is not isolated but a typical result of concentrated capacity release in the polyester bottle chip industry. From 2023 to 2024, domestic capacity exceeded 20 million tons/year, while demand was only 12 million tons/year, a gap of 8 million tons. This implies an operating rate barely above 60%, with massive capacity idling and eating depreciation and financial costs. As the second-largest player, Sanfangxiang pivoted from textile printing to bottle-grade polyester chips and PTA after a 7.35-billion-yuan 'snake-swallows-elephant' acquisition of Hailun Chemical in 2020. Profits grew steadily initially, reaching 818 million yuan in 2022, but then three consecutive years of losses totaled 1.628 billion yuan, with a single-year loss of 885 million yuan in 2025.
More critically, Sanfangxiang's industrial chain only covers the PTA-to-bottle-chip segment, with core raw material PX entirely outsourced. Amid PTA overcapacity, upstream PX price fluctuations directly erode profit margins. In 2025, the company's trading revenue plunged 59.97% year-on-year to 1.713 billion yuan, reflecting weak downstream demand and squeezed intermediary margins.
Debt Risks and Governance Gaps
Beyond operating losses, Sanfangxiang faces a chain reaction from overdue guarantees. As of the latest announcement, cumulative overdue debts for guarantees provided to subsidiaries and related parties reached 522 million yuan, accounting for 10.82% of the latest audited net assets. Among them, unpaid rent of 25.6376 million yuan from subsidiary Hailun Petrochemical to Taiping石化 Financial Leasing, for which the company is an irrevocable joint liability guarantor, can only be addressed by 'actively communicating with creditors' for extension.
More concerning are audit signals. In the 2025 annual report, auditors stated they 'could not obtain sufficient appropriate audit evidence' for the recoverability of 3.561 billion yuan in related-party receivables, while the company only provisioned 107 million yuan in bad debts, a coverage rate below 3%. Shares of the controlling shareholder Sanfangxiang Group and its affiliates are frozen, and if disposed, could directly trigger a change in actual control. Lianhe Credit Rating downgraded the company's long-term credit rating to A- with a negative outlook in June 2026.
Anti-Involution Policy Brings Breathing Room
In the second half of 2025, national authorities convened a symposium with PTA and bottle-chip leading enterprises to discuss industry operations and project progress. Amid severe supply-demand mismatch, the symposium was seen as a signal to prevent and resolve 'involution-style' competition. Policy effects showed in Q1 2026: Sanfangxiang achieved a net profit of 32.7409 million yuan, turning profitable year-on-year. Concurrently, the Strait of Hormuz blockade pushed polyester chain product prices up, improving margins. The company's stock price also temporarily escaped the 1-yuan delisting threshold.
But policy support does not equal fundamental reversal. Sanfangxiang's chain weakness remains—profits in the PTA and bottle-chip segments depend on upstream PX supply, with global PX capacity still concentrated among a few petrochemical giants. Even if anti-involution policies bring short-term relief, long-term competitiveness still requires cost control and supply chain resilience.
Industry Lesson: From Scale Race to Efficiency Competition
Sanfangxiang's case warns the entire polyester chain: capacity expansion cannot replace a cost moat. From 2020 to 2025, domestic polyester bottle chip capacity grew at an average annual rate of over 15%, while demand grew only 5%. In an overcapacity buyer's market, players with vertically integrated layouts (e.g., self-built PX capacity or long-term contracts) have better risk resistance. Sanfangxiang's single-segment layout leaves no room for maneuver in price wars.
For buyers, this event means supplier credit risk in polyester bottle chips needs reassessment. Especially for small and medium players, similar predicaments may arise. Prioritize suppliers with PX self-sufficiency or long-term contract guarantees, and monitor their audit opinion types and guarantee debt levels.
For foreign trade companies, Sanfangxiang's case highlights delivery risk in export orders. If a supplier halts production due to delisting or debt issues, it may cause shipment delays or quality drops. Consider adding supplier credit rating triggers in contracts and maintaining a backup supplier list.