The stock of Recon Technology, Ltd. (Nasdaq: RCON) plunged 6% to $4.83 per American depositary share intraday Monday after the company posted disappointing results for the first half of the fiscal year 2021.
The Beijing-based oil and gas company said that in the six months through December its revenue was $3.9 million, down 17% year-over-year. Net loss widened to $1.4 million, or 19 cents per share.
Recon attributed its revenue decline to its lagging automation product and software business. Its sales activities have not returned to normal level after the Covid-19 outbreak, and revenue from automation product and software segment decreased by 44% to $1.9 million, according to the report.
"During the six months period ended December 31, 2020, our management focused on fund reserve and cash management to prepare for a rapid development in the coming year,” said Shenping Yin, the co-founder, and chief executive officer of Recon.
He added that oil companies in China will continue to increase their capital expenditures in 2021. Meanwhile, the company expects more orders to be released in the year 2021 which is expected to be a busy year for the oil industry.
In January, the company had acquired 51% of Future Gas Station (Beijing) Technology, Ltd. to expand its advantages in the management and operation of gas stations in China.
Founded in 2007, Recon was China's first non-state-owned oil and gas field service company publicly listed on the Nasdaq stock exchange. In 2017, Recon started to broaden its operations by targeting the energy sector, expanding its services in the fields of electric power, coal chemicals, renewable energy, and environmental protection. According to Recon, its primary customers are two of China’s top oil and gas companies, Kulun Energy Company Ltd. (HKEX: 0135) and China Petroleum & Chemical Corp., (NYSE: SNP) or Sinopec.