Foshan's richest man declares bankruptcy as Zhigao Air Conditioning (志高空调) enters liquidation

Sudden collapse of a hometown icon

Foshan Nanhai District People's Court (佛山南海区人民法院) has declared Guangdong Zhigao Air Conditioning (志高空调) officially in bankruptcy liquidation, it has been reported. The company — once a national challenger to Gree (格力), Midea (美的), Haier (海尔) and Hisense (海信) — faces roughly ¥6.2 billion in claims, with 214 creditors registered and the largest single creditor named as a state-owned bank’s Foshan branch. How did a firm that once exported to more than 200 countries and made its founder Foshan’s richest man collapse so fast?

From popsicles to IPO and back to the court docket

Founder Li Xinghao (李兴浩) built the business from selling ice lollies to a Hong Kong IPO in 2009 and a peak year around 2010 when Zhigao’s revenue topped ¥10 billion and shipments exceeded 8 million units. By contrast, Zhigao reported only ¥668 million in revenue through the first three quarters of 2025, a greater-than-90% decline, and market share has fallen below 0.8% with annual shipments under 500,000 units. Since 2024 suppliers and dealers began suing for unpaid bills; the company has been hit with 47 cases involving more than ¥180 million and core factories cut capacity by about 70%.

Strategic missteps, alleged misconduct and asset carve-outs

Industry analysts point to strategic mistakes — under-investing in inverter and smart-home technology while rivals poured resources into R&D — and costly, failed expansions into smart-home and battery projects that reportedly burned about ¥1.5 billion. It has been reported that Li was suspected of borrowing or misappropriating roughly ¥400 million of corporate funds and was placed under police control in 2023; following that, banks moved to withdraw or restrict lending and liquidity quickly deteriorated. The bankruptcy filing applies to the old parent carrying historical debts; it has been reported that the core brand and some valuable businesses were carved out earlier. Court-appointed managers plan asset disposals including three properties and hundreds of trademarks and patents to satisfy creditors.

Bigger picture: manufacturing pain and state-led rescue tools

Zhigao’s fall is part of a wider pattern. Manufacturing has been a high-incidence sector for bankruptcy filings, and Chinese home-appliance makers have seen at least 17 large-scale failures in 2023–2025, including brands tied to larger groups. State-backed asset management companies (AMCs) and local equivalents are increasingly acting as rescue financiers or strategic investors in restructuring cases — a policy tool Beijing uses to manage industry consolidation and bad-debt resolution. For Western readers unfamiliar with the landscape: these AMCs function as quasi-state restructuring vehicles, buying bad assets and sometimes injecting capital to preserve jobs and industrial capacity. The Zhigao liquidation will test how effectively courts, creditors and AMCs can salvage value from one of China’s once-fastest-growing exporters.