A veteran polyester enterprise founded in 1980 now stands on the brink of delisting. Sanfangxiang, a chemical fiber manufacturing leader based in Jiangyin, received a 'disclaimer of opinion' on its 2025 annual report and an adverse internal control opinion, triggering a double delisting risk warning. The controlling shareholder's shares have entered judicial auction, though temporarily stayed due to execution objections. The Sword of Damocles remains suspended.
Overcapacity Cannibalism: From 818 Million Profit to 1.6 Billion Loss in Three Years
Sanfangxiang's fall is a stark warning. Net profit stood at 630 million yuan in 2021 and rose to 818 million in 2022. The turning point came in 2023, followed by three consecutive years of losses totaling 1.628 billion yuan. Losses in 2024 were 487 million, widening to 885 million in 2025. Where did the money go? The answer lies in the severe supply-demand mismatch in the polyester bottle chip industry.
Industry data shows that from 2023 to 2024, domestic polyester bottle chip capacity surged, exceeding 20 million tons annually, while market demand was only 12 million tons per year. This implies over 8 million tons of capacity was idle or operating at low utilization. As the second-largest player, Sanfangxiang simultaneously launched a major expansion, only to see its profits devoured by price wars. The PTA sector faced a similar glut, with polyester leaders piling in, compressing industry margins to historic lows.
More critically, Sanfangxiang's industrial chain layout is too thin. It covers only the PTA-to-bottle-chip segment, with core raw material PX entirely outsourced. Cost control is inherently weak; once upstream PX prices rise, profit margins are instantly squeezed. The company's trading revenue in 2025 plummeted 59.97% year-on-year to just 1.713 billion yuan, further confirming the collapse of its main business.
Debt Chain Reaction: Guarantee Defaults and Related-Party Receivables
Beyond operational losses, Sanfangxiang faces severe debt risk contagion. As of the latest announcement, cumulative overdue debt under guarantees provided to subsidiaries reached 522 million yuan, accounting for 10.82% of the latest audited net assets. Among these, subsidiary Hailun Petrochemical's overdue rent of 25.6376 million yuan to Taiping石化 Financial Leasing is a new addition.
A bigger hidden risk lies in related-party transactions. At end-2025, accounts receivable from related parties stood at 3.561 billion yuan, against only 107 million yuan in accumulated bad debt provisions. Auditors explicitly stated they could not obtain sufficient appropriate audit evidence on the recoverability of these amounts. Controlling shareholders' shares have been frozen; if disposed, the company's actual control may change. The company also provided 600 million yuan in related guarantees to the controlling shareholder without recognizing a provision.
Anti-Involution Signal: Can State Intervention Be a Turning Point?
Sanfangxiang's crisis is an extreme case of industry-wide involution, but not an isolated one. In H2 2025, relevant national authorities convened a symposium with PTA and bottle chip leaders to discuss industry operations and project progress. Against the backdrop of supply-demand mismatch and thin margins, the meeting was seen as a key move to prevent and resolve 'cutthroat' competition.
Policy effects began to show in Q1 2026, with Sanfangxiang reporting net profit of 32.7409 million yuan, turning around year-on-year. Meanwhile, the Strait of Hormuz blockade caused a sharp rebound in polyester chain product prices, improving margins. The company's stock price also rebounded, temporarily escaping the 1-yuan delisting threshold.
But risks remain. On June 26, 2026, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook, and downgraded its convertible bond to A-. The controlling shareholder's share auction is temporarily stayed, but the Sword of Damocles has not disappeared.