A veteran chemical fiber enterprise founded in 1980 now stands at the brink of delisting. Sanfangxiang has triggered dual delisting risk warnings due to a 'disclaimer of opinion' and 'negative internal control opinion' in its 2025 annual report, with controlling shareholder shares subject to judicial auction. This former polyester giant is enduring the pains of a deep industry shakeout.
The Lethal Blow of Overcapacity
Sanfangxiang's plight is not isolated but a microcosm of supply-demand imbalance across the polyester chain. According to public data from the National Bureau of Statistics, China's polyester bottle chip capacity surged from 2023 to 2024, exceeding 20 million tons per year, while demand stood at only 12 million tons. The supply-demand gap of 8 million tons has persistently compressed product margins. As the second-largest player, Sanfangxiang acquired Hailun Chemical for 7.35 billion yuan in 2020, shifting its focus to bottle-grade polyester chips and PTA. The first two years post-acquisition saw profit growth, but from 2023 onward, the situation reversed. Industry financial data shows cumulative losses of 1.628 billion yuan from 2023 to 2025, with a single-year loss of 885 million yuan in 2025.
More critically, Sanfangxiang's industrial chain layout is overly narrow. It only covers the PTA-to-polyester bottle chip segment, relying heavily on external purchases for core raw material PX. Industry analysts point out that such a 'single-link' model is extremely vulnerable during overcapacity cycles—any upstream PX price hike quickly squeezes margins. In 2025, the company's trading revenue dropped 59.97% year-on-year to 1.713 billion yuan, further confirming the severity of core business pressure.
The Hidden Mines of Guarantee Defaults and Related-Party Transactions
Beyond core business losses, Sanfangxiang faces a chain of guarantee default risks. Company announcements show cumulative overdue guarantee debts for subsidiaries reached 522 million yuan, accounting for 10.82% of the latest audited net assets. Among these, a wholly-owned subsidiary Hailun Petrochemical failed to pay 25.6376 million yuan in due rent to Taiping石化 Financial Leasing, for which the company bears irrevocable joint liability.
Related-party transactions pose another time bomb. As of end-2025, accounts receivable from related parties stood at 3.561 billion yuan, yet only 107 million yuan in bad debt provisions had been made. Auditors explicitly stated they could not obtain sufficient evidence regarding the recoverability of these amounts. Should related parties face repayment issues, these receivables could turn into massive bad debts. Controlling shareholder shares have been judicially frozen, and if disposed of, could trigger a change in actual control. Additionally, a 600 million yuan related guarantee for the controlling shareholder has not been recognized as a liability, further increasing financial uncertainty.
Anti-Involution Policies Offer Breathing Room
A turning point is emerging at the industry level. 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 a backdrop of supply-demand mismatch and thin margins, this meeting was widely seen as a key signal to prevent 'involutionary' competition. Subsequently, the pace of capacity expansion slowed markedly, with some new projects postponed or canceled.
Sanfangxiang's financials already reflect policy effects: in Q1 2026, the company posted a net profit of 32.7409 million yuan, reversing losses year-on-year. Moreover, tensions in the Strait of Hormuz have driven price rebounds in the polyester chain, improving margins. The company's stock price has also rebounded from the 1-yuan delisting threshold. However, in June 2026, Lianhe Credit downgraded the company's long-term credit rating to A- with a negative outlook, indicating persistent market concerns over its solvency.
Survival Rules in the Industry Shakeout
Sanfangxiang's case sounds an alarm for the chemical fiber industry: in an overcapacity cycle, enterprises with single-link layouts have extremely weak risk resistance. Leading players like Hengli and Rongsheng, with full-chain coverage from PX to downstream differentiated products, have maintained relative resilience through price wars. In contrast, 'midstream' enterprises like Sanfangxiang are squeezed from both sides—upstream raw material price volatility and downstream weak demand—leaving razor-thin margins.
From procurement and foreign trade perspectives, the industry is now in a critical 'capacity reduction' window. PTA and polyester bottle chip price volatility may increase, but anti-involution policies are expected to gradually improve supply-demand dynamics.