BEIJING, July 20, 2022 /PRNewswire/ — Recon Technology, Ltd (NASDAQ: RCON) (“Recon” or the “Company”) today announced an update for investors and shareholders on the current status of its business, challenges faced by its activities, its current situation and its plans for the future. Management views this update as a step towards improving regular communications with shareholders and investors.
The pandemic has impacted the business plans of many companies, and Recon was no exception. The pandemic has directly affected the execution of the Company’s corporate strategies, contracts, communication plans and approach to capital markets, in particular our interaction with investors.
The cyclical nature of the oil industry, which is measured in decades, has also had a significant impact on the Company. If oil prices continue to rise as expected, the Company expects its business, which focuses on providing equipment and services to major oil companies in the production and development phases of their fields oil companies, benefit as customers increase their budgets for capitalized expenditures, such as exploration and development. For these reasons, the Company expects its performance still be affected not only by fluctuations in oil prices, but also by the six-montheleventh periodd in which the performance of the oil companies is adjusted to these fluctuations in the price of oil. Therefore, the shareholders of the company can expect our performance to increase from the year 2020 to the present due to the increase in oil prices, in particular thanks to the completion financial year 2022; and our business is expected to continue to grow in financial year 2023. The Company expects to achieve an average annual growth rate of 30% over the next three years.
In China, the Company’s business development is superimposed on another small cycle: the customer decision-making cycle. Most of the Company’s long-standing clients have a consistent budgeting process. March is usually when they come up with their budget and development plans for the year, and funds are usually allocated in June. Thus, the first half of each natural year is a low period for the Company. During this lull, the Company favors close communication with its customers, which affects the financial performance of the whole year.
Starting in 2019, the Company invested in Future Gas Station (beijing) Technology Ltd (“Future Gas Station”), taking a 51% stake in Future Gas Station in 2021. The Company is engaged in part of the new energy business based on customer demand and changes in the structure of energy consumption in China. Currently, these two companies are still in development, but the pace of expansion is not as fast as expected due to the epidemic and economic development, especially in the overall consumer segment.
Over the past two years, management has proactively explored new customers outside of the oilfield and businesses in sectors where seasonality is not as pronounced in the oil industry – such as security services and maintenance and sanitation services – and their efforts have been well rewarded.
The Company sought new business opportunities to improve the stability of the company’s cash flow, achieve net profit and improve shareholder returns. We are also exploring investments in technology and research and development to facilitate greater participation in the front-end segment of the industry chain and achieve greater returns. As these efforts develop, we will provide further updates to our shareholders.
Although the Company’s share price fell below $1 in recent months, the Company’s mission has been to maximize shareholder interest by improving the Company’s profitability, not to maximize the share price over a short period of time. Management does not believe that a stock consolidation or buyback is the best strategic choice for the Company at this time. The Company’s objective is to improve the quality of earnings, achieve high quality long-term stable returns and preserve shareholder value and interest. The company’s operations are improving and management believes that its active steps to improve operating fundamentals will position the company for longer-term compliance and success.
Finally, the Company sincerely thanks its shareholders for their continued concern with the Company’s operations and market performance. This press release, born of the ongoing questions and concerns of shareholders, aims to relaunch regular communication between shareholders, which the Company intends to maintain in the future. The Company intends to provide other operational updates in addition to regular press releases every 3 months.
About Recon Technology, Ltd (“RCON”)
Recon Technology, Ltd. (NASDAQ: RCON) is the People’s Republic of China first non-state-owned oil and gas services company listed on NASDAQ. Scouting Supplies China leading oil exploration companies, Sinopec (NYSE:SNP) and The China National Petroleum Corporation (“CNPC”), with advanced automated technologies, efficient gathering and transportation equipment, and reservoir stimulation measures to increase oil extraction levels, reduce impurities and reduce production costs. Over the years, RCON has held leadership positions in several segmented markets within the oil and gas service industry. RCON has also developed a long-term stable cooperative relationship with its major customers. For more information, please visit: http://www.recon.cn/.
Recon includes “forward-looking statements” within the meaning of federal securities laws throughout this press release. A reader can identify forward-looking statements because they are not limited to historical facts or use words such as “expected”, “may”, “will”, “could”, “should”, “should”. “, “expects”, “believes”, “anticipates”, “projects”, “plans”, “estimates”, “expects”, “goal”, “goal”, “commit”, “have the ‘intent to’, ‘continue’ or ‘probably will result,’ and similar expressions regarding Recon’s strategy, plans, intentions or beliefs regarding future events or results. Forward-looking statements are subject to risks, uncertainties and other factors that may change at any time and may cause actual results to differ materially from those expected by Recon. Many of these statements are derived from Recon’s operating budgets and forecasts, which are based on numerous detailed assumptions that Recon believes are reasonable, or are based on various assumptions regarding certain plans, activities or events that we believe will occur. will or may occur in the future. However, it is very difficult to predict the effect of known factors, and Recon cannot anticipate all factors that could affect actual results which may be important to an investor. All forward-looking information should be evaluated in the context of such risks, uncertainties and other factors, including the factors disclosed under “Risk Factors” in Recon’s most recent Annual Report on Form 20-F and all subsequent semi-annual financial filings on Form 6-K filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by the cautionary statements Recon makes from time to time in its SEC filings and public disclosures. Recon cannot assure the reader that it will achieve the results or developments that Recon anticipates, or, even if substantially achieved, that they will cause the consequences or affect Recon or its operations in the manner intended by Recon. . Forward-looking statements speak only as of the date they are made. Recon undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances occurring after the date on which they were made, except as otherwise required by law. Because of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or which may be made elsewhere from time to time by or on behalf of Recon.
For more information please contact:
M/s. Liu Jia
Recognition Technology, Ltd
Phone: +86 (10) 8494-5799
E-mail: [email protected]
SOURCE Recon Technology Ltd