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Introduction

Recon Technology Ltd is a pioneering non-state-owned oilfield service company based in the People's Republic of China. It specializes in delivering advanced oilfield services, utilizing state-of-the-art automated technologies and precise reservoir stimulation methods to support petroleum extraction and production efficiency. By servicing major players in the oil and gas industry, including Sinopec and CNPC, the company has solidified its role as a crucial enabler in the energy supply chain.

Business Model and Core Operations

The company operates primarily as an integrated solutions provider in the oil and gas field service industry. Its business model is built on the supply of advanced technology components and automated systems that enhance the extraction process and optimize field operations. Recon Technology offers services that range from gathering and transportation equipment to specialized reservoir stimulation measures designed to increase extraction volumes, reduce impurities, and lower overall production costs. Besides its core oilfield services, the company has diversified into environmental protection, electric power, and coal chemical industries, reflecting a strategic adaptation to the evolving energy landscape.

Technological Innovation and Service Excellence

At the heart of Recon Technology's operations is its commitment to technological innovation. By integrating automated oil drilling equipment and advanced monitoring systems, it provides efficient, data-driven solutions that improve operational safety and productivity. The company leverages cutting-edge sensor technology and remote data analysis to ensure rapid response times and precise control over production processes. This focus on innovation has allowed Recon Technology to maintain enduring relationships with its major clients and establish a competitive advantage in a highly dynamic sector.

Diversified Service Portfolio

Besides traditional oilfield services, the company is actively engaged in expanding its portfolio into complementary industries:

  • Environmental Protection: Emphasizing sustainable practices, the company integrates eco-friendly approaches into its operations, helping clients meet regulatory requirements.
  • Electric Power and Coal Chemical: It supplies efficient equipment and technologies that support the generation and distribution of electric power as well as innovations in coal chemical processing.
  • Chemical Recycling: Recognizing the importance of waste management in energy production, Recon Technology has initiated projects in the chemical recycling of low-value plastics, further diversifying its market reach.

Market Position and Competitive Landscape

Recon Technology has earned its reputation through a combination of operational expertise and innovative solutions. Its long-term relationships with leading exploration and production companies, such as Sinopec and CNPC, are a testament to its reliability and service quality. While it faces stiff competition from both state-owned enterprises and other private sector players, Recon Technology distinguishes itself through its robust technological capabilities and a diversified service model that adapts to the current needs of the energy market. The company's emphasis on compliance—evidenced by strategic actions such as its reverse stock split to meet NASDAQ listing requirements—illustrates its commitment to maintaining high operational standards and regulatory adherence.

Operational Efficiency and Industry Impact

In a sector marked by cyclical market trends and evolving technological demands, Recon Technology has positioned itself as a trusted partner for high-profile energy companies. Its deployment of automated, efficient gathering and transportation systems not only increases production levels but also reduces operational impurities, thereby lowering costs and boosting overall performance. Additionally, by incorporating low-carbon energy solutions and exploring alternative materials and recycling processes, the company supports both economic efficiency and environmental stewardship.

Conclusion

Recon Technology Ltd stands as a comprehensive, technology-driven solutions provider in the oilfield service industry. Its multifaceted approach—ranging from advanced automated technologies to diversified energy solutions—demonstrates deep industry knowledge and a commitment to operational excellence. This balanced integration of technology, service diversification, and strategic market positioning continues to play a significant role in supporting the energy sector’s infrastructure and efficiency, making it an essential company for understanding the modern dynamics of oil and gas field operations.

Rhea-AI Summary

Recon Technology (NASDAQ: RCON) reported financial results for H1 FY2025, showing mixed performance. Total revenue decreased 7.0% to RMB42.1 million ($5.8 million), while gross profit increased to RMB13.4 million ($1.8 million). The company's gross margin improved to 31.7% from 26.7% year-over-year.

Notable segment performance included:

  • Automation product revenue increased 19.2%
  • Equipment and accessories revenue declined 12.2%
  • Oilfield environmental protection revenue decreased 66.2%
  • Platform outsourcing services revenue grew 53.7%

The company reported a net loss of RMB20.7 million ($2.8 million), an improvement from the previous year's loss of RMB23.1 million. As of December 31, 2024, RCON maintained a strong cash position of RMB145.3 million ($19.9 million).

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Recon Technology (NASDAQ: RCON) reported its fiscal year 2024 financial results, showing a modest revenue increase of 2.6% to RMB68.8 million ($9.5 million) compared to FY2023. The company's gross profit improved to RMB20.9 million ($2.9 million), with gross margin increasing to 30.3%. Despite these improvements, RCON recorded a net loss of RMB51.4 million ($7.1 million), though this represents a decreased loss compared to the previous year's RMB61.4 million. The company maintains a strong cash position of RMB110.0 million ($15.1 million) and short-term investments of RMB88.1 million ($12.1 million) as of June 30, 2024.

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Recon Technology, (NASDAQ: RCON) announced its financial results for the first six months of fiscal year 2024.

Total revenue was RMB45.3 million ($6.4 million), consistent with the same period in 2022. Gross profit decreased to RMB12.1 million ($1.7 million), and gross margin dropped to 26.7% from 28.8% in 2022.

The company reported a net loss of RMB23.1 million ($3.3 million), down from RMB29.9 million ($4.2 million) in the same period last year. Management highlighted recovery in the oilfield services business, development of new offshore customers, and ongoing construction of a chemical recycling plant, expected to generate substantial future returns.

Revenue from equipment and accessories rose by 83.6% to RMB8.1 million ($1.1 million), while revenue from oilfield environmental protection and platform outsourcing services saw declines of 37.0% and 55.3%, respectively.

Cost of revenues increased slightly to RMB33.2 million ($4.7 million). Gross profit from automation products and software decreased by 14.3%, while cost for equipment and accessories rose by 106.1%.

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Recon Technology announced on May 23, 2024, that it has regained compliance with Nasdaq's listing standards. The company received a letter from Nasdaq's Listing Qualifications Hearings Department on May 22, 2024, confirming that the bid price deficiency had been resolved. As a result, the scheduled hearing was canceled, and Recon's ordinary shares will continue to be listed and traded on the Nasdaq Capital Market.

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Recon Technology, (NASDAQ: RCON) has received a delisting determination from Nasdaq due to not meeting the Minimum Bid Price Rule. The company has appealed the decision, but if no appeal is made, trading will be suspended on May 2, 2024. The recent approval of the consolidation of its Class A ordinary shares is expected to take effect on May 1, 2024.

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Recon Technology, (NASDAQ: RCON) announced a 1-for-18 reverse stock split approved by shareholders on March 29, 2024, to regain compliance with NASDAQ rules. The split will reduce outstanding shares from 141,803,218 to approximately 7,877,956, with trading on a split-adjusted basis starting May 1, 2024.
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Recon Technology Ltd secures contracts worth over $3 million from a new oilfield-industry customer for electronic components, showcasing the company's expertise and commitment to excellence.
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Recon Technology Ltd to showcase low value plastic chemical recycling solutions at 2024 Plastics Recycling Conference in Texas.
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Recon Technology, Ltd announces financial results for fiscal year 2023 with a decrease in total revenue of 19.9% and a net loss of $8.5 million. Gross margin increased to 28.1%. CEO expects growth opportunities in the oil industry and expansion into broader energy sectors.
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Recon Technology has been granted an additional 180-day period for compliance with NASDAQ's minimum bid price requirement. The Company's ordinary shares need to reach a closing bid price of at least $1.00 per share for ten consecutive trading days by April 22, 2024.
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FAQ

What is Recon Technology Ltd's core business?

The company specializes in delivering advanced oilfield services using automated technologies and efficient reservoir stimulation techniques to optimize petroleum extraction.

Which industries does Recon Technology serve?

Primarily, it serves the oil and gas industry while also expanding its operations into environmental protection, electric power, and coal chemical sectors.

How does the company generate revenue?

Recon Technology generates revenue through the supply of advanced technological components and systems, integrated field services, and diversified energy solutions.

What differentiates Recon Technology from its competitors?

Its strong focus on technological innovation, long-term relationships with major clients like Sinopec and CNPC, and diversification into complementary energy sectors distinguish it from competitors.

How does the company ensure technological excellence?

By continuously integrating state-of-the-art automated systems and data-driven monitoring solutions, the company enhances operational efficiency and safety during oilfield operations.

What steps has Recon Technology taken to comply with market regulations?

The company has implemented strategic measures, such as executing a reverse stock split, to maintain NASDAQ compliance and secure its listing status.

How does the company address environmental concerns?

Alongside traditional oilfield services, Recon Technology has diversified into environmental protection and chemical recycling, incorporating eco-friendly practices into its operations.

How is Recon Technology positioned in the competitive oilfield services market?

The company enjoys a competitive edge through its advanced technology offerings, strong client relationships, and commitment to integrating diversified energy solutions while adhering to high operational standards.
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