Recon Technology Stock Price, News & Analysis

Recon Technology, Ltd. (NASDAQ: RCON) is a China-based independent solutions integrator focused on the oilfield service, environmental protection, electric power and coal chemical industries. The company is described as the People's Republic of China's first NASDAQ-listed non-state-owned oil and gas field service company. Recon operates within the support activities for oil and gas operations segment of the mining, quarrying, and oil and gas extraction sector.

According to company disclosures, Recon supplies China's largest oil exploration companies, including Sinopec and The China National Petroleum Corporation (CNPC), with advanced automated technologies, efficient gathering and transportation equipment, and reservoir stimulation measures. These offerings are intended to increase petroleum extraction levels, reduce impurities and lower production costs for upstream oil and gas operators.

Business Segments and Services

Based on its public filings and press releases, Recon's business spans several key segments:

• Automation products and software – This segment includes automation systems and related software used in oilfield operations and other industrial settings. Recon reports revenue from automation products and software and notes that this segment benefits from growing demand for automated operations and high-margin service businesses.
• Equipment and accessories – Recon provides specialized oilfield equipment and accessories, including industrial equipment tailored for oil and gas production and related applications. Revenue in this segment is influenced by oilfield customers' production capacity, offshore oilfield activity and customers' budget and cost-control strategies.
• Oilfield environmental protection – The company reports an oilfield environmental protection business that includes wastewater and oily sludge treatment and residual oil recovery services. These services assist oilfield companies in handling hazardous waste and recovering residual oils, with the aim of enhancing profitability and addressing environmental requirements.
• Platform outsourcing services – Recon operates platform outsourcing services related to fuel and freight trading, where it works with gas station and diesel users and online freight platform customers. This segment's performance is affected by customers' internal system upgrades, cooperation with third-party partners and transaction volumes.
• Chemical recycling of low-value plastics – Recon is developing a plastic chemical recycling business through Shandong Recon Renewable Resources Technology Co., Ltd. The company has invested in a 40,000-ton-per-year waste plastic chemical recycling project, referred to as the Recon Plastic Chemical Recycling Project, which focuses on low-value waste plastics.

Oilfield and Low-Carbon Energy Focus

Recon describes itself as a provider of oilfield services and low-carbon energy services. In its oilfield activities, Recon serves domestic oil companies and offshore oilfield customers with automation, specialized equipment and environmental protection services. Management commentary indicates that Recon has secured new clients outside of the oilfield industry and has expanded its order book with offshore oilfield customers, as well as developing new customers in offshore fields.

In parallel, the company is expanding into broader energy and environmental areas. Recon has emphasized a focus on carbon-zero opportunities, alternative materials for primary petroleum products and the chemical recycling of low-value plastics. The plastic chemical recycling project is described as an important way for Recon to participate in waste treatment, recycling and circular economy initiatives.

Chemical Recycling Project

The Recon Plastic Chemical Recycling Project in Shandong province is a major initiative within Recon's low-carbon and environmental protection strategy. Company announcements state that:

• The project is designed as a 40,000-ton-per-year waste plastic chemical recycling facility operated by Shandong Recon Renewable Resources Technology Co., Ltd.
• The main manufacturing plant has been topped out, marking a key construction milestone, and the project has entered the equipment installation and commissioning phase.
• Upon completion and commencement of operations, the project is expected to include six pyrolysis units, two distillation units and corresponding environmental protection facilities.
• The project is expected to produce plastic pyrolysis oil and carbon residue from membrane film-type waste plastic, which is difficult to process using physical recycling methods.

Recon reports that the project adopts a dual-process approach combining catalytic pyrolysis and catalytic reforming, and uses a horizontal screw-type three-stage continuous reactor in the pyrolysis process. The company states that these technological choices are intended to address technical challenges in plastic coking and to support stable, continuous feedstock supply. Recon has also indicated that it is engaged in discussions with multinational chemical companies and domestic chemical companies and has signed product purchase intent and strategic cooperation agreements related to the project.

Client Base and Market Orientation

Recon's disclosures highlight long-term relationships with major domestic oil companies and a client base that includes:

• China's largest oil exploration companies, including Sinopec and CNPC, which use Recon's automated technologies, gathering and transportation equipment and reservoir stimulation measures.
• Domestic oilfield customers, including onshore and offshore oilfields, which purchase automation products, specialized equipment and environmental protection services.
• Customers in the electric power and coal chemical industries, where Recon acts as an independent solutions integrator.
• Customers using platform outsourcing services related to gasoline and diesel transactions and online freight platforms.

The company has also reported progress in expanding into international markets. For example, Recon has noted contracts to upgrade and retrofit automation systems for a large gas field in Asia and has referenced prior automation service and maintenance contracts outside China.

Corporate Structure and VIE Arrangements

Recon Technology, Ltd. is a foreign private issuer that files reports with the U.S. Securities and Exchange Commission under Form 20-F and Form 6-K. The company operates in the People's Republic of China through variable interest entities (VIEs), including Nanjing Recon Technology Co., Ltd. and Beijing BHD Petroleum Technology Co., Ltd.

In a Form 6-K report, Recon disclosed that, following changes in shareholders of these entities, the contractual arrangements for its VIEs were amended, restated and re-registered with competent authorities. The updated agreements, signed on July 10, 2025, include exclusive equity interest pledge agreements, exclusive consulting and service agreements, exclusive equity interest purchase agreements and related powers of attorney. Recon states that these updates were made to reflect changes in individual shareholders and that the principal terms of the contractual arrangements remain unchanged, and the updates do not affect the company's contractual control over the VIEs.

Listing Status and Capital Actions

Recon's ordinary shares trade on the Nasdaq Capital Market under the symbol RCON. The company has reported interactions with Nasdaq related to listing compliance:

• In April 2024, Recon received a Nasdaq staff determination letter regarding non-compliance with the minimum bid price rule and the potential delisting of its securities, and it appealed the determination to a Nasdaq hearings panel.
• In May 2024, Recon announced that it had received a compliance letter from Nasdaq stating that its bid price deficiency had been cured and that the company was in compliance with all applicable listing standards. As a result, the scheduled hearing was cancelled and the company's ordinary shares continued to be listed and traded on the Nasdaq Capital Market.

Recon also implemented a 1-for-18 reverse stock split of its Class A ordinary shares. The reverse split was approved by shareholders and became effective for trading on Nasdaq on a split-adjusted basis under the same symbol RCON, with a new CUSIP number. The stated objective of the reverse stock split was to enable the company to regain compliance with Nasdaq listing rules regarding minimum bid price.

Financial Reporting and Segment Trends

Recon regularly reports financial results for its fiscal year and interim periods. The company discloses revenue by segment, gross profit, gross margin, operating expenses, interest income, other income (expenses) and net loss. Management commentary has highlighted:

• Changes in revenue from automation products and software, equipment and accessories, oilfield environmental protection and platform outsourcing services, driven by oilfield customers' production levels, budget controls, regulatory permits and demand from new businesses and customers.
• Fluctuations in gross margin across segments, including higher margins from high-margin service businesses and residual oil recovery services, and lower margins where customers adopt low-cost operating models or settlement prices are reduced.
• Ongoing investment in research and development, particularly in digital solutions and oilfield environmental protection, and in the chemical recycling plant for low-value plastics.

While Recon has reported net losses in recent periods, management has also discussed efforts to stabilize operations by securing new clients outside the oilfield industry, expanding overseas oilfield client bases and pursuing low-carbon and recycling projects.

Position in the Oilfield Service and Environmental Space

Within the support activities for oil and gas operations industry, Recon positions itself as a supplier of automated technologies, specialized equipment, environmental protection services and digital solutions tailored to upstream oil and gas operations. Its activities in oilfield environmental protection and chemical recycling of low-value plastics indicate a focus on both operational efficiency and environmental considerations in the energy and petrochemical value chain.

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