Air Conditioner War Reaches Endgame? Summer Hasn't Arrived Yet, But Chigo Air Conditioning Has Already Collapsed

Author: Seven Hundred

This image is AI-generated.

“Is it illegal for me to want to surpass Haier?” “Gree’s manufacturing isn’t better than Zhigao’s; it’s just better marketing.”

Nowadays, it’s hard to imagine an air conditioning company daring to say such things, but over a decade ago, Zhigao Air Conditioning founder Li Xinghao was full of bold confidence.

This was 2010. At that time, Zhigao Air Conditioning had just been listed on the Hong Kong Stock Exchange for over a year. That year, Zhigao’s sales surpassed Haier, ranking third in the industry.

However, no one expected that the once spirited Zhigao Air Conditioning would fall in the spring of fifteen years later.

On February 13, the Foshan Nanhai District People’s Court officially announced the initiation of bankruptcy liquidation proceedings for Guangdong Zhigao Air Conditioning Co., Ltd. This brand, born in the fierce air conditioning battle, outlasted competitors like Chunlan and Kelon but ultimately failed to迎来2026年的夏天.

Born at the wrong time, yet rising rapidly

In October 1993, Li Xinghao, who had sold ice pops and run a restaurant, officially founded Zhigao Air Conditioning. However, he didn’t expect that the start would be extremely difficult.

A year later, an unprecedented air conditioning war broke out, just as Zhigao Air Conditioning had just begun production.

In 1994, Kelon announced a direct price cut of 1,000 yuan. Newly entered Zhigao had to lower its price to 2,980 yuan to open up the market, even though the raw material cost of an air conditioner at that time was as high as 3,600 yuan.

Yet, even “losing money to gain reputation,” the market didn’t give this newcomer a friendly response. In 1994, Zhigao sold only a few thousand units.

The entrepreneurs of that era were inherently adventurous, so temporary difficulties were not insurmountable.

The following year, at the Shunde Guangdong order fair, under Li Xinghao’s leadership, Zhigao secured distributors in Tianjin, Beijing, and other cities, gaining a breathing space.

What doesn’t kill me makes me stronger. The price war didn’t kill Zhigao; instead, it revealed a business opportunity in low-price competition.

Zhigao drastically compressed profit margins, pricing products 20% lower than competitors to quickly open markets in third- and fourth-tier cities; simultaneously, it implemented aggressive channel incentives, even signing lifelong cooperation agreements with core distributors to build a solid channel moat.

By 2004, Zhigao’s annual sales exceeded 2.8 million units, firmly ranking in the top five of the industry, and expanding its business footprint to over 200 countries and regions worldwide. Three years later, in 2007, its market share rose to fourth nationwide, becoming a powerful force in the air conditioning industry. In 2009, riding the wave of policies like “home appliance rural subsidies” and “energy-saving benefits for the people,” Zhigao Holdings was listed on the main board of the Hong Kong Stock Exchange, with Li Xinghao’s net worth soaring to HKD 1.8 billion overnight.

In 2010, Zhigao Air Conditioning reached its peak, surpassing Haier in sales for the first time in history, breaking the industry’s traditional top three pattern. Li Xinghao was confident, not only securing Jackie Chan as a spokesperson but also openly challenging Dong Mingzhu, declaring “a billion in ten years, surpass Gree, Midea, and Haier,” showing his ambitious challenge to industry giants.

All of fate’s gifts had long been secretly priced in

Just when everyone thought this dark horse in air conditioning was about to ride to the top, Zhigao quickly fell behind.

In 2011, Zhigao experienced its first loss since listing, becoming the only top-tier air conditioning company that year to report a loss.

Meanwhile, the driver of this dark horse suddenly retreated. On January 4, 2012, Zhigao announced Zheng Zuyi as chairman, with Li Xinghao stepping back to become chairman of the board.

Of course, Li Xinghao didn’t sit idle. He began investing in building decoration company Shenzhuang, acquiring shares in private Nanhua Bank, and expanding into media and education sectors.

However, these efforts were not successful. In fact, the trigger for Zhigao’s bankruptcy was linked to Shenzhuang. In August 2023, Li Xinghao, as a shareholder of Shenzhuang, was detained by public security authorities for suspected “misappropriation of funds” in a criminal case.

For Zhigao Air Conditioning, the most serious crisis stemmed from its reliance on a low-price strategy. Due to its consistent cost-performance approach, Zhigao was reluctant to invest heavily in technology.

In 2012, Zhigao’s R&D expenditure was 77 million yuan; in 2013, it increased to 85 million yuan, still less than 1% of sales. In contrast, Gree and Midea’s R&D investments accounted for over 3.6%, with annual amounts exceeding 4 billion yuan.

Meanwhile, Zhigao’s overall operation resembled an assembly factory, with core compressor parts mainly imported from Mitsubishi Japan. Competitors like Midea and Gree not only had their own compressor factories but also began developing inverter chip technology.

Price wars are tactical; technological battles are strategic.

As the industry evolved, Zhigao, lacking technological advantages, began to fall behind. From 2012 onward, Zhigao’s profitability fluctuated sharply, with losses of nearly 60 million yuan in 2014, 690 million yuan in 2015, 480 million yuan in 2018, and 1.408 billion yuan in 2019.

In 2019, Zhigao Holdings faced delisting procedures from HKEX due to massive losses and was suspended from trading. On April 4, 2022, Zhigao Holdings officially delisted from HKEX, bidding farewell to the capital market.

During this period, Zhigao tried to turn losses into profits by selling assets—factories, land, subsidiaries’ equity—selling off valuable assets but still unable to reverse the decline.

It’s worth noting that in desperation, Zhigao also made a reckless move by licensing its brand to small and medium-sized air conditioning manufacturers. This led to a complete loss of quality control, becoming the final straw that broke the camel’s back.

In 2019, Zhigao’s Executive President Zhang Ping tearfully reflected in a public event that the organizational atmosphere was corrupt, management abuse was rampant, talent gaps persisted, and investment decisions were reckless.

“Liquidation” is not “bankruptcy.” Where is the new Zhigao headed?

According to the Foshan Nanhai District People’s Court, Guangdong Zhigao Air Conditioning Co., Ltd. has entered bankruptcy liquidation. Data shows Zhigao’s self-reported liabilities amount to about 3.2 billion yuan, with an additional roughly 3 billion yuan of unresolved claims. On the asset side, its remaining realizable assets mainly include 82,300 square meters of real estate, 690 trademarks, and 271 patents.

It’s important to note that this bankruptcy does not mean the end of the “Zhigao” brand. Instead, it’s a typical “old shell for debt repayment, new body for survival” asset and debt separation. The bankrupt entity is “Guangdong Zhigao Air Conditioning Co., Ltd.,” a platform burdened with past bank loans, supplier debts, and operational losses.

In fact, as early as 2021, its core business, production lines, and operational team had been spun off into a newly established “Guangdong Zhigao Gewu Technology Co., Ltd.,” led by new management Xiao Fengqi. Industry analysts commented that this is the best way to resolve historical burdens through judicial procedures—akin to a “bone scraping” method—allowing the brand to start fresh. In other words, the old company’s bankruptcy is to settle irrecoverable old debts, while the new company continues production and sales.

From the performance of the spun-off operation, the new Zhigao shows signs of recovery. Data for 2025 indicates a year-over-year sales increase of over 30%, with export markets growing by more than 50%, and an annual capacity maintained above 10 million units. The new Zhigao is attempting to shed its past “low-price, low-quality” label by emphasizing product quality, such as “pure copper pipes,” aiming to restore its tarnished brand reputation. Meanwhile, it is avoiding the main battlegrounds of top domestic brands and focusing on markets along the “Belt and Road,” reportedly achieving a 10% market share locally, and entering high-margin segments like light commercial air conditioners.

However, to re-establish itself in this highly competitive industry, the new Zhigao faces significant challenges.

First, the burden of brand assets. Over the years, Zhigao had authorized many small brands to produce OEM products, leading to a market flooded with inconsistent quality “Zhigao” products, still eroding brand credibility.

Second, market space is shrinking. Gree, Midea, and Haier together hold over 70% of the market share, while cross-border players like Xiaomi are rapidly capturing young consumers through smart ecosystems.

The biggest challenge is the disconnect with consumers. For today’s “post-00s” generation, air conditioning choices now revolve around smart connectivity, home aesthetics, and ecological integration. Without core technology and with an outdated brand image, the new Zhigao faces great difficulty in re-entering the minds of young consumers.

The market never favors past glory; it rewards continuous innovation. As the industry shifts from incremental growth to stock competition, technological accumulation and brand reputation are the tickets to survive cycles.

Today, the “old shell for debt, new body for survival” restructuring has given Zhigao a glimmer of hope. However, overextending the brand’s credibility takes time to repair, and filling the gap in consumer perception is even more challenging.

Whether Zhigao can achieve a true self-revival amid giants’ encirclement remains to be seen, and only time will tell.