Zhong Xue Gao’s Ownership Change and the Cycle of Brand Business
Chongxuegao isn’t dead—it’s just been repackaged. The original company is still working through its debts, but its core assets were snapped up in June by Wang Yaqing at auction. He spent 21.1 million yuan to acquire 492 trademarks, including “Chongxuegao,” “Zhongxue Di,” and “Zhongxue Bu Gao,” along with eight patents and eight copyrights. Interestingly, the old company’s social media accounts were explicitly cancelled, while the new entity plans to operate under the name “Zhongxue Gao” for now, holding off on reverting to “Chongxuegao” until it has enough market footing.
The capital backing this deal comes from a firm that has also invested in Lei Jun’s portfolio and Yili: Changsha Hujia Food. They already run a frozen-food brand called “Royal Little Tiger” whose business model closely mirrors Chongxuegao’s—internet-first growth paired with cold-chain logistics. Though registered under Chongxuegao Brand Management, the new company is headquartered in Changsha, clearly drawn by the region’s supply-chain infrastructure. Its new CEO, Chen Dacheng, is a polarizing figure: a post-90s food-review blogger with over a million followers across platforms, now steering the rebranded Chongxuegao.
This kind of corporate resurrection is hardly novel. Nokia, GE, Philips, Toshiba, Dole, Converse, Reebok, LV, Dior, and Balenciaga—all brands you’ve heard of—have survived bankruptcy, been bought for pennies, and continued under new ownership. Some players specialize in it. America’s ABG Group, for instance, acquired Forever 21, Reebok, and Champion, then earned licensing fees while posting an adjusted EBITDA margin of 76 percent in 2020. Put plainly, the name behind a brand often outvalues the company itself.
A quick note: this is a textbook case of brand-asset securitization. In China’s mature supply-chain ecosystem, where contract manufacturing is refined, the brand itself frequently outweighs a heavy-asset corporation in value. The original Chongxuegao held 492 trademarks, forming a moat around its identity; Royal Little Tiger, the incoming owner, excels in internet marketing and cold-chain fulfillment—precisely where Chongxuegao stumbled. Aggressive promotion outpaced its supply-chain and capital-management capabilities. From an industrial standpoint, this vulture-style play is common in consumer goods: buy distressed brands at rock-bottom prices, reactivate them through light-asset licensing, and profit from brand premium rather than manufacturing margins. Whether the model holds depends on whether the new team can actually fix the root causes of the original brand’s collapse instead of merely slapping on a fresh sign.
Original article: “Borrowing a Corpse to Resurrect a Soul” | Prisma