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**The Main Entrance of Xinfei Company – "Xinfei Refrigerator" Sculpture**
After experiencing continuous losses of 507 million Singapore dollars (approximately 2.48 billion yuan) for over six consecutive years, Xinfei, once a leading refrigerator manufacturer, halted production on November 1, 2017, marking the end of its operational phase.
Some attribute the company’s decline to the foreign shareholder introduced 23 years ago—the Singapore-based Hong Leong Group—arguing that they failed to maintain their leadership position. Analysts also suggest that local government mismanagement of the Xinfei brand damaged its reputation. However, behind the emotional responses of employees, there was a missed opportunity for Xinfei under Liu Bingyin's leadership regarding listing and diversification.
Journalists have sought out former high-level executives of Xinfei to uncover how this once-prominent refrigerator company rose from a small military enterprise reliant on loans to pay wages, to becoming a leader in the domestic market. They also explored why, after introducing foreign shareholders, the company failed to capitalize on growth opportunities and gradually declined.
**The Golden Age of “Liu Bingyinâ€: Ranked Among China’s Top Ten Most Valuable Brands**
In 1981, when Xinxiang Radio Equipment Factory was under the State Ministry of Machinery, it faced severe financial difficulties, accumulating over 700,000 yuan in losses and failing to pay employee wages for three consecutive months. At that time, Liu Bingyin served as the last deputy director of the factory.
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*Li Lianyin and Liu Bingyin (right), former members of the Xinfei Party Committee*
While other leaders abandoned the factory during a crisis, Liu Bingyin took charge. He initiated a “short and fast†project, earning 1.8 million yuan by assembling black-and-white TVs and dual-use machines. By 1983, the factory had cleared all debts and shed its loss-making status.
Inspired by the popularity of refrigerators, Liu decided to shift focus to refrigeration technology, partnering with Italian Philips IRE. On December 8, 1984, the Xinxiang Refrigerator Factory broke ground, officially launching the new era of Xinfei. The first phase invested over 18 million yuan, including six imported and nine domestic production lines, with full operation beginning on November 10, 1986.
After entering the market, the “Xinxiang-Snowflake†brand received numerous national awards, such as the “Golden Rabbit Special Award†at Shanghai’s first famous product exhibition. The brand soon gained recognition.
“Later, it was renamed ‘Xinfei’ due to a legal dispute with Philips. The name actually comes from the homonym of the Philippines,†explained one of Liu Bingyin’s former colleagues to the澎湃 journalist.
By 1988, the Xinxiang Refrigerator Factory completed its annual target three months early, ranking first in sales revenue, profit, tax, and per capita profit. Xinfei became a star in Xinxiang City. In 1989, the factory achieved sales income of 214 million yuan and a profit of 28.79 million yuan.
“Although he didn’t finish fourth grade, Liu Bingyin dared to act. He had clear ideas and strong management skills,†said an insider. Liu was known for his strict quality control, famously stating, “Whoever messes up the Xinfei brand, will lose their rice bowl.â€
On May 20, 1990, Liu Bingyin publicly smashed over 400 unqualified refrigerators in front of dealers, media, and employees. Later that year, he destroyed more than 1,000 defective units, suspending the quality department and reducing salaries by 30% for managers. This strict approach improved product quality across the board.
Beyond quality control, Liu broke away from traditional state-owned enterprise norms. “Many thought that joining Xinfei meant guaranteed meals regardless of performance,†said an insider. Liu challenged this mindset, replacing the “iron rice bowl†system with competition and merit-based promotions. One deputy manager was directly removed due to poor performance.
On December 18, 1991, Henan Xinfei Electric Group was established, incorporating dozens of domestic and international appliance manufacturers, universities, and research institutions.
On January 18, 1994, the group restructured into Henan Xinfei Electric (Group) Co., Ltd., with 17.04% of shares held by employees and 82.96% by the state.
“From 1991 to 1994, Xinfei grew at an average rate of 40% per year,†said an insider. Under Liu Bingyin’s leadership, Xinfei entered the top ten most valuable brands in China.
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*On May 20, 1990, Xinfei destroyed 400 unqualified refrigerators.*
**Singapore’s Hong Leong Group: Sales Exceeded 1.2 Million Units, Profits Surpassed 300 Million**
As Xinfei flourished, the Singapore-based Hong Leong Group appeared on the scene. On August 2, 1994, Henan Xinfei Electric (Group) Co., Ltd. formed a joint venture with Singapore’s Honglong Electric and Yuxin Electric, with shareholding ratios of 49%, 45%, and 6%, respectively. On October 13, 1994, Henan Xinfei Electric Co., Ltd. was officially established.
Registered capital was 66.86 million yuan, with Xinfei Group contributing 327.76 million and the Singaporean partners 340.11 million.
In early 1994, Henan provincial leaders visited Singapore, seeking investment from local business figures. During a meeting with Lee Kuan Yew, Mr. Guo Fangfeng of Hong Leong Group was encouraged and sent a team to inspect Xinfei, ultimately choosing it as a partner.
“In 1994, Xinfei’s sales were not yet comparable to Shanghai’s, but profits were better than Haier’s. Before the joint venture, Haier’s annual net profit did not exceed Xinfei’s,†said an insider. Despite initial reluctance from Liu Bingyin, the joint venture structure was formed, with Yuxin Electric holding 55% to secure his approval.
After the joint venture, Xinfei invested 420 million yuan to build China’s largest fluorine-free refrigerator plant, with an annual capacity of 600,000 units. The facility, known as No. 39 Factory, opened in January 1996. The fluorine-free refrigerator met global environmental standards and was well-received in the market.
By 1996, Xinfei’s refrigerator sales exceeded 1.2 million units, and total profits surpassed 300 million yuan for the first time.
However, failure to transition from “product management†to “brand management†and lack of diversification led to hidden risks. “Xinfei missed the chance to expand beyond refrigerators, which created long-term challenges,†said a senior executive.
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*Li Lianyin talks with Gao Jialin (right), former vice chairman of Xinfei*
**“Diversification†Missed: Rejected Listing, Tried to Enter Air-Conditioning Twice**
From 1996 to 2000, Xinfei’s sales increased from 1.2 million to 1.6 million units, but sales stagnated, and profit margins dropped from 16% to less than 6%. Li Lianyin’s book revealed the growing risks facing Xinfei.
Compared to Midea, whose brand value reached 2.9 billion yuan in 1997, Xinfei’s brand value was 3.2 billion yuan. By 2001, Midea’s sales reached nearly 15 billion yuan, while Xinfei’s ranged between 2.5 and 3 billion.
“Why are we so big and full? Haier is doing many things. But the results show it’s not worth it. Their profits and taxes are less than one-third of mine,†wrote Liu Bingyin in “Advertising in the End.†He opposed listing, saying, “Listing is not just about making money. I don’t know where to spend it. The bank has already loaned me money.â€
In 1993, Midea and Haier rushed into the stock market, using financing to expand into diverse sectors. Xinfei lagged behind.
Liu Bingyin later tried to diversify into air-conditioning. The first attempt was in 1997, when Whirlpool sold its Shenzhen Blue Wave brand for 200 million yuan. However, the Singaporean board rejected the acquisition, citing risks. Another attempt in 2000 to acquire Guangdong’s Zhongshan Sanrong failed due to similar concerns.
After Liu Bingyin’s death in 2001, the company struggled. “Management lacked autonomy, and the market response was slow,†wrote “Advertising in the End.†Liu’s strict approach led to frequent personnel changes, aiming to boost sales but ultimately failing.
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*Xinfei Electric in Suspension*
**Cultural Conflicts in the Hong Leong Era: Employees “Let It Burnâ€**
Six months before Liu Bingyin’s death, Xinfei’s shareholding structure changed. In February 2001, Hong Leong acquired a 6% stake in Yuxin Electric, increasing its share to 51%.
Despite the change, the joint venture charter allowed Chinese management to retain control. After Liu’s passing, Li Gen took over, restructuring the management to be more decentralized and implementing incentive mechanisms.
Under Li Gen, Xinfei briefly rebounded, rising to second place in the industry. However, in 2005, the Xinxiang Municipal Government sold 39% of shares to Hong Leong for 510 million yuan, giving them 90% ownership.
In 2006, Malaysian Zhang Donggui replaced Li Gen, initiating drastic reforms. Cultural clashes between Chinese and Singaporean management began.
“A large number of Singaporean managers came to Xinfei,†said a former executive. By 2010, the number of middle managers had surged from under 100 to 400, causing inefficiency and slower decision-making.
Zhang Donggui openly criticized the previous culture, saying, “I’m hired to manage the company, not to be the owner.†He also dismissed the idea of treating employees as family, unlike Liu Bingyin, who personally greeted workers each morning.
Under Zhang’s leadership, the cultural legacy of Liu Bingyin was gradually abandoned. Employees, once passionate, became indifferent. When a fire broke out in 2003, workers rushed in without fire trucks, cleaning the site within days. By 2007, another fire occurred, and employees watched silently, saying, “Burn it out. What’s the point of saving it?â€
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*Xinfei Office District*
**Huge Losses Waiting for New Leadership: The Government Hopes to Revive the Xinfei Brand**
“Before 2010, there should have been no losses,†said an insider. Thanks to the rural appliance subsidy policy, Xinfei avoided losses until 2010. However, Zhang Donggui refused to sell, believing the company could recover.
After Zhang left in 2010, the company’s losses began in 2011, totaling 507 million Singapore dollars (about 2.48 billion yuan) over six years. Frequent leadership changes and inconsistent strategies worsened the situation.
Hong Leong invested 1.15 billion yuan in Xinfei, but the company still faced massive debt. With fixed assets of 600 million yuan and total liabilities of 2.25 billion yuan, the company struggled to survive.
The Xinxiang Municipal Government has been actively seeking investors to revive the Xinfei brand. “If a suitable investor can be found quickly, the brand’s value can be preserved. If delayed too long, it will harm Xinfei,†said an insider. The government hopes to restore confidence in the brand.
Pengpai journalist also learned that the first creditor meeting for Xinfei Electric will be held on January 19.
New flying and falling: once more than Haier can still earn a production stoppage
On the middle section of Hongli Avenue in Xinxiang City, Henan Province, a building known as the "Xinfei Recruitment Office" has been sealed with a bright red lock. Across from this office stands Henan Xinfei Electric Co., Ltd., the headquarters of "Xinfei Electric Appliances." A white marble statue is positioned at the main entrance, featuring an old two-door refrigerator with a large ball on top, and a stainless steel eagle soaring above it.
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