A veteran polyester giant founded in 1980 now teeters on the brink of delisting. Sanfangxiang's plight is not an isolated case but a microcosm of the polyester bottle chip industry's capacity disorder and profit collapse. With an 'adverse opinion' and 'internal control negative opinion' on its 2025 annual report, judicial auction of controlling shareholder shares, and cumulative overdue guaranteed debt reaching 522 million yuan, the numbers behind the company paint a stark picture of supply-demand imbalance.
Overcapacity: From 800 Million Profit to 800 Million Loss
Sanfangxiang's financial trajectory clearly outlines the dramatic shift in the industry cycle. The company posted profits of 630 million yuan in 2021 and 818 million yuan in 2022, followed by three consecutive years of losses: 487 million yuan in 2024 and 885 million yuan in 2025, accumulating total losses of 1.628 billion yuan. The root cause is the sharp deterioration of supply-demand dynamics in the polyester bottle chip sector.
Industry data shows that from 2023 to 2024, domestic polyester bottle chip capacity was released intensively, pushing total capacity beyond 20 million tons per year, while actual demand stood at only 12 million tons. This mismatch caused product spreads to narrow continuously, severely eroding industry profits. As the second-largest producer, Sanfangxiang could not escape the trap of 'increasing output without increasing profits.'
More critically, the company's industrial chain has an inherent weakness. It only covers the PTA-to-bottle chip segment, relying entirely on external procurement for its core raw material, PX. This means that when upstream PX prices rise, the company has almost no cost buffer. In 2025, its trading business revenue fell by 59.97% year-on-year to 1.713 billion yuan, further confirming its operational fragility.
Debt and Guarantees: A Chain Reaction Unfolds
Beyond operating losses, Sanfangxiang faces concentrated exposure to guaranteed debts. As of the latest announcement, cumulative overdue guaranteed debts for subsidiaries and between subsidiaries reached 522 million yuan, accounting for 10.82% of the most recent audited net assets. Notably, its wholly-owned subsidiary Hailun Petrochemical failed to pay due rent on a 290 million yuan financing lease, and Sanfangxiang, as the irrevocable joint liability guarantor, faces compensation pressure.
Even more concerning is the risk of unrecoverable related-party receivables. As of the end of fiscal 2025, the company's accounts receivable from related parties stood at 3.561 billion yuan, but accumulated bad debt provisions were only 107 million yuan. Auditors explicitly stated they could not obtain sufficient audit evidence for the recoverable amount of these items. If these receivables ultimately cannot be recovered, it would severely impact the company's net assets.
Risks at the controlling shareholder level are equally significant. Shares held by Sanfangxiang Group and Jiangsu Sanfangxiang International Trade have been judicially frozen. If subsequent judicial disposal occurs, it could lead to a change in actual control. The company has not recognized a provision for a 600 million yuan related-party guarantee provided to its controlling shareholder. These uncertainties continue to pressure the company's credit profile. In June 2026, Lianhe Credit Rating downgraded the company's long-term credit rating to A- with a negative outlook.
Anti-Involution Policy: Industry Turnaround or Temporary Relief?
The root of Sanfangxiang's crisis lies in industry 'involution,' and anti-involution policies are now offering a potential turning point. In the second half of 2025, relevant national authorities convened a symposium with leading PTA and bottle chip enterprises to discuss industry operations and project progress. Against the backdrop of supply-demand mismatch and razor-thin margins, the industry views this symposium as a significant signal to prevent and resolve 'involutionary' competition and promote stable industry development.
The policy effect was initially evident in Q1 2026, when Sanfangxiang posted a net profit of 32.74 million yuan, turning profitable year-on-year. Additionally, the closure of the Strait of Hormuz this year triggered a notable rebound in polyester chain product prices, improving profit margins. The company's stock price has also temporarily moved away from the 1-yuan delisting threshold.
But does this mean the industry's difficulties are resolved? From a capacity perspective, the overcapacity in domestic polyester bottle chip remains fundamentally unchanged, with the gap between 20 million tons of capacity and 12 million tons of demand persisting. Whether national anti-involution policies can drive the elimination of outdated capacity and foster a more orderly competitive landscape will determine the long-term fate of Sanfangxiang and other polyester bottle chip producers.