Polyester Giant Faces Delisting Crisis: The Cost of Overcapacity and Single-Chain Strategy

A veteran polyester giant founded in 1980 and listed in 2003 is teetering on the brink of delisting. Sanfangxiang's 2025 annual report received a 'disclaimer of opinion' and 'negative internal control opinion,' triggering dual delisting risk warnings, while controlling shareholder shares are under judicial auction. The company's crisis, transitioning from textile printing and dyeing to integrated chemicals, reflects the deep-seated risks of overcapacity and single-chain strategy in the polyester industry.

Roots of Loss: Overcapacity and Single-Chain Vulnerability

Sanfangxiang's losses are no accident. From 2023 to 2025, the company posted cumulative losses of 1.628 billion yuan, with 2025 alone losing 885 million yuan, nearly double the previous year. Where did the money go? The answer lies in the supply-demand imbalance of the polyester bottle-grade chip sector. Domestic capacity has exceeded 20 million tons/year, while market demand is only about 12 million tons, meaning capacity utilization is below 60%. As the industry's second-largest producer, Sanfangxiang acquired Hailun Chemical for 7.35 billion yuan in 2020, shifting its focus to bottle-grade polyester chips and PTA, and launched massive capacity expansion. However, increased capacity was swallowed by brutal 'involution'—product spreads shrank, and 2025 trading revenue plummeted 59.97% year-on-year.

More critically, Sanfangxiang's industrial chain is too thin. It only covers the PTA-to-polyester bottle chip segment, relying entirely on purchased PX as core feedstock. This 'midstream-only' model makes cost control extremely fragile. When upstream PX prices rise, margins are squeezed to near zero. Compared to fully integrated polyester players with end-to-end chains from PX to finished products, Sanfangxiang lacks a buffer against raw material volatility.

Debt Chain Reaction and Credit Collapse

Losses are just the tip of the iceberg. As of the latest filing, Sanfangxiang's total overdue debt under guarantees for subsidiaries reached 522 million yuan, accounting for 10.82% of the latest audited net assets. Among these, its wholly-owned subsidiary Hailun Petrochemical failed to pay 25.6376 million yuan in expired rents to Taiping石化 Financial Leasing, forcing the company to 'actively communicate with creditors to seek extensions.' Even more alarming, the company's accounts receivable from related parties stood at 3.561 billion yuan, with only 107 million yuan in bad debt provisions—auditors explicitly stated they could not obtain sufficient evidence on recoverability.

All shares held by controlling shareholders Sanfangxiang Group and Jiangsu Sanfangxiang International Trade have been judicially frozen. If disposed of, the company's actual control could change. In May 2026, controlling shareholder shares were publicly auctioned but temporarily halted due to an enforcement objection—the 'sword of Damocles' remains. In June 2026, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with negative outlook, and downgraded its convertible bonds.

A Glimmer of Hope from Anti-Involution Policy

Sanfangxiang's crisis stems from industry 'involution,' and anti-involution policies may offer a lifeline. In the second half of 2025, national authorities convened a symposium for PTA and bottle chip leading enterprises to discuss operations and projects under construction. Against a backdrop of supply-demand mismatch and thin margins, the meeting was seen as a key signal to curb 'involutionary' competition.

Policy effects showed in Q1 2026: Sanfangxiang posted a net profit of 32.7409 million yuan, turning around year-on-year. Meanwhile, the Strait of Hormuz blockade pushed up polyester chain product prices, temporarily lifting margins. But is this a cyclical bottom or a flash in the pan? The fundamental overcapacity of 20 million tons remains unchanged, PX dependence persists, and internal governance issues—related-party transactions, internal control deficiencies—are unresolved.

Lessons for the Industry Chain

Sanfangxiang's case sounds an alarm for the polyester industry: in an overcapacity cycle, the 'midstream-only' model carries extreme risk. For buyers and exporters, supplier selection must prioritize chain completeness and resilience.

For Buyers - Prioritize suppliers with full PX-PTA-polyester integration, which offer better cost buffers during raw material volatility. - Scrutinize suppliers' guarantee-to-equity ratios and related-party transaction volumes; high overdue guarantee ratios often signal cash flow stress and potential supply disruption. - Diversify polyester bottle chip purchases across multiple suppliers to avoid over-concentration risk.

For Exporters - Include raw material price adjustment clauses in long-term contracts, linking product pricing to PX fluctuations to hedge midstream cost pass-through risks. - Monitor anti-dumping actions against Chinese polyester bottle chips in target markets; Sanfangxiang's credit downgrade may affect L/C negotiations—opt for higher-credit suppliers. - Use futures tools (PTA and bottle chip futures are liquid) to lock in forward procurement costs and manage price risk.