BEIJING, July 20,
2022 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ:
RCON) ("Recon" or the "Company") announced today an update to
investors and shareholders on the current state of its business,
challenges facing its business, its current state of affairs and
its plans for the future. Management views this update as a step
toward enhancing regular communications with shareholders and
investors.
The pandemic has impacted the business plans of many companies,
and Recon has been no exception. The pandemic has directly affected
the Company's execution of corporate strategies, contracts,
communication plans and approach to the capital markets, especially
our interaction with investors.
The cyclical nature of the oil industry, which is measured in
decades, has also had a great impact on the Company. If oil prices
continue to rise as anticipated, the Company expects that its
business, which focuses on providing equipment and services to
large oil companies in the production and development phases of
their oil fields, will benefit as customers increase their budgets
for capitalized expenditures, such as exploration and development.
For these reasons, the Company expects that its performance will
always be affected by not only the
oil price fluctuations, but also the six-month period in which oil companies'
performances are adjusted to such oil price fluctuations.
Therefore, Company shareholders can expect that our performance has
been growing from year 2020 to now due to increasing oil prices,
including through the completed fiscal
2022; and it is expected that our business will continue to
grow in fiscal 2023. The Company
expects to achieve an average annual growth rate of 30% in the next
three fiscal years.
In China, the Company's
business development is overlaid with another small cycle: the
customer decision making cycle. Most of the Company's longstanding
customers have a uniform budgeting process. March is usually the
time they make 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 slow period for the Company. During this lull,
the Company focuses on close communication with its customers,
which affects the financial performance for the entire year.
Starting in 2019, the Company has 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 a part of the new energy business based
on customer demand and the changing energy consumption structure in
China. Currently, these two
businesses 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 been proactively
exploring new customers outside the oilfield and businesses in
industries where seasonality is not as pronounced in the oil
industry - such as safety and maintenance services and wastewater
services - and their efforts have been well rewarded.
The Company has been looking for new business opportunities to
improve the stability of the company's cash flow, achieve net
profit and improve shareholder returns. We are also exploring
technology and research and development investments to facilitate
further participation in the front-end segment of the industry
chain and achieve larger returns. As these efforts develop, we will
provide further updates to our shareholders.
Although the Company's share price has fallen below $1 in recent months, the Company's mission is 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 share consolidation or
a buyback is the best strategic choice for the Company right now.
The Company's goal 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 its active steps to improve operational
fundamentals will position the Company for longer term compliance
and success.
Lastly, the Company sincerely thanks its shareholders for their
continued concern about the Company's operations and market
performance. This press release, born out of the continued
inquiries and concerns of shareholders, is intended to rekindle
regular communication shareholders, which the Company intends to
maintain going forward. The Company intends to provide further
operational updates in addition to ordinary course press releases
every 3 months.
About Recon Technology, Ltd ("RCON")
Recon Technology, Ltd (NASDAQ: RCON) is the People's Republic of China's first
NASDAQ-listed non-state owned oil and gas field service company.
Recon supplies China's largest 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 measure for increasing petroleum extraction
levels, reducing impurities and lowering production costs. Through
the years, RCON has taken leading positions within several
segmented markets of the oil and gas filed service industry. RCON
also has developed stable long-term cooperation relationship with
its major clients. For additional information please visit:
http://www.recon.cn/.
Forward-Looking Statements
Recon includes "forward-looking statements" within the meaning
of the federal securities laws throughout this press release. A
reader can identify forward-looking statements because they are not
limited to historical fact or they use words such as "scheduled,"
"may," "will," "could," "should," "would," "expect," "believe,"
"anticipate," "project," "plan," "estimate," "forecast," "goal,"
"objective," "committed," "intend," "continue," or "will likely
result," and similar expressions that concern Recon's strategy,
plans, intentions or beliefs about future occurrences 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 that Recon expected. Many
of these statements are derived from Recon's operating budgets and
forecasts, which are based on many detailed assumptions that Recon
believes are reasonable, or are based on various assumptions about
certain plans, activities or events which we expect 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 that may be important to an
investor. All forward-looking information should be evaluated in
the context of these risks, uncertainties and other factors,
including those factors disclosed under "Risk Factors" in Recon's
most recent Annual Report on Form 20-F and any subsequent half-year
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 that Recon makes
from time to time in its SEC filings and public communications.
Recon cannot assure the reader that it will realize the results or
developments Recon anticipates, or, even if substantially realized,
that they will result in the consequences or affect Recon or its
operations in the way Recon expects. Forward-looking statements
speak only as of the date made. Recon undertakes no obligation to
update or revise any forward-looking statements to reflect events
or circumstances arising after the date on which they were made,
except as otherwise required by law. As a result of these risks and
uncertainties, readers are cautioned not to place undue reliance on
any forward-looking statements included herein or that may be made
elsewhere from time to time by, or on behalf of, Recon.
For more information, please contact:
Ms. Liu Jia
Chief Financial Officer
Recon Technology, Ltd
Phone: +86 (10) 8494-5799
Email: info@recon.cn
View original
content:https://www.prnewswire.com/news-releases/recon-issues-shareholder-update-301590042.html
SOURCE Recon Technology Ltd