Polyester Giant Sanfangxiang Faces Delisting Crisis: A Warning from Industry Supply-Demand Imbalance

A veteran polyester giant founded in 1980 now stands at the edge of delisting. Sanfangxiang's 2025 annual report received a 'disclaimer of opinion' and an 'adverse internal control opinion', triggering dual delisting risk warnings. Based in Jiangyin, Jiangsu, the company pivoted from textile printing and dyeing to polyester bottle chips and PTA in 2020 via an acquisition of Hailun Chemical, but failed to escape the severe industry involution.

Root Cause: Overcapacity and Narrow Chain

According to China Customs data, domestic polyester bottle chip capacity surged to over 20 million tons/year between 2023 and 2024, while demand stood at only 12 million tons/year — a supply-demand gap of 8 million tons. This crushed product spreads and margins. As the nation's second-largest bottle chip producer, Sanfangxiang's expansion led to higher output but collapsing profits. From 2023 to 2025, the company posted three consecutive losses totaling 1.628 billion yuan, with the 2025 loss widening to 885 million yuan. Its value chain covers only PTA to bottle chips, leaving it fully exposed to purchased PX prices. Industry data shows that when upstream PX prices rise, such single-segment players face severe cost control challenges.

Debt Risks and Guarantee Time Bombs

Beyond core losses, Sanfangxiang faces cascading guarantee defaults. As of the latest filing, overdue guarantees for subsidiaries reached 522 million yuan, or 10.82% of audited net assets. Notably, subsidiary Hailun Petrochemical defaulted on 25.64 million yuan in rent payments to太平石化金融租赁, for which Sanfangxiang provided irrevocable joint liability guarantees. More alarming is the related-party receivable risk: at end-2025, receivables from affiliates totaled 3.561 billion yuan, but only 107 million yuan in bad debt provisions were made. Auditors stated they could not obtain sufficient evidence for recoverability. The controlling shareholder's shares have been frozen, and potential disposal could trigger a change in control, directly impacting supply chain stability.

Policy Intervention and Market Rebound

The crisis is not without a lifeline. In late 2025, national authorities convened a symposium with major PTA and bottle chip producers to discuss capacity projects and industry operations. Against the backdrop of supply-demand mismatch and thin margins, the meeting was widely seen as a key move to curb 'involutionary' competition. The policy effect showed in Q1 2026, when Sanfangxiang posted a net profit of 32.74 million yuan, reversing losses. Concurrently, the Strait of Hormuz blockade pushed up polyester chain product prices, boosting margins. The stock price temporarily rose above the 1-yuan delisting threshold. However, on June 26, Lianhe Credit Rating downgraded its long-term credit rating to A- with a negative outlook, indicating persistent market concern over long-term solvency.

Transmission to Industrial Clusters

Sanfangxiang's home base in Jiangyin and surrounding Yangtze River Delta area is a core hub for the polyester chain. A crisis at a leading firm can ripple through guarantee chains, receivables, and raw material procurement to upstream and downstream players. Bottle chip processors and beverage packaging buyers reliant on its supply need to evaluate alternatives, while PTA producers facing similar overcapacity should watch for contagion risks.

Practical Recommendations

For Buyers - For purchases of bottle chips or PTA from Sanfangxiang or its affiliates, shorten payment terms, increase advance payment ratios, or use letters of credit to reduce credit risk exposure. - Assess alternative suppliers, prioritizing integrated players like Yisheng and Hengli with larger scale and full-chain operations, to ensure supply continuity.

For Foreign Trade Firms - For export orders involving Sanfangxiang products, closely monitor its credit rating changes and customs status updates to avoid cargo detention or letter of credit rejection. - Under the backdrop of anti-involution policies, seize potential price rebound windows for bottle chip exports, but include floating price clauses to hedge against raw material volatility.