A polyester giant that started in 1980 now stands at the edge of delisting. Sanfangxiang, based in Jiangyin, Jiangsu, received a disclaimer of opinion and an adverse internal control opinion on its 2025 annual report, triggering dual delisting risk warnings. Its controlling shareholder's shares have also been frozen. This is not just a single company's plight but a microcosm of the severe overcapacity in China's polyester bottle chip industry.
Overcapacity: An Industry-Wide Burden
Sanfangxiang's losses are not sudden. From 2023 to 2025, the company recorded three consecutive years of losses, totaling 1.628 billion yuan, with a single-year loss of 885 million yuan in 2025. Where did the money go? The answer lies in the supply-demand structure of the polyester bottle chip industry.
Industry data shows that from 2023 to 2024, domestic polyester bottle chip capacity was released intensively, exceeding 20 million tons per year, while downstream demand was only about 12 million tons. The sharp supply-demand imbalance has continuously squeezed product margins. As the second-largest producer in the industry, Sanfangxiang also launched large-scale capacity expansion, but output rose without corresponding profits, dragging it into a mire of 'involution.'
More critically, Sanfangxiang's supply chain is too narrow. It only covers the PTA-to-polyester bottle chip segment, relying heavily on external purchases of the core raw material PX. With weak cost control, any upstream price hike squeezes its profit margins. In 2025, the company's trading revenue fell 59.97% year-on-year to 1.713 billion yuan.
Debt and Guarantees: Adding Insult to Injury
Beyond operating losses, Sanfangxiang faces a 'landmine' of overdue guarantees. As of the latest announcement, the cumulative overdue debts for which the company provided guarantees to its subsidiaries reached 522 million yuan, accounting for 10.82% of the most recent audited net assets. Among them, subsidiary Hailun Petrochemical defaulted on 25.6376 million yuan in rent due to Taiping石化 Financial Leasing, backed by an irrevocable joint liability guarantee of 290 million yuan.
As of the end of 2025, the company's accounts receivable from related parties stood at 3.561 billion yuan, with only 107 million yuan in bad debt provisions. Auditors stated they could not obtain sufficient appropriate audit evidence for the recoverability of these amounts. The controlling shareholder's shares are frozen, and any subsequent judicial disposal could lead to a change in control. The company also provided a 600 million yuan related-party guarantee for its controlling shareholder without recognizing estimated liabilities.
Anti-Involution: Industry Self-Rescue and Government Intervention
Sanfangxiang's crisis stems essentially from industry overcapacity. In the second half of 2025, national authorities held a symposium with leading PTA and bottle chip enterprises to discuss industry operations and projects under construction. Against the backdrop of supply-demand mismatch and thin profits, this meeting was seen as a key step to prevent 'involutionary' competition and promote stable industry operations.
The intervention has shown initial results. In the first quarter of 2026, Sanfangxiang achieved a net profit of 32.7409 million yuan, turning around from a loss. Additionally, the blockade of the Strait of Hormuz led to a significant rebound in polyester chain product prices, improving margins. The company's stock price has temporarily moved above the 1 yuan delisting warning line.
However, the 'sword of Damocles' remains. In May 2026, the controlling shareholder's shares were scheduled for public auction, postponed due to an execution objection but still uncertain. On June 26, Lianhe Credit Rating downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook.