BEIJING, Sept. 30, 2026 /PRNewswire/ -- Recon Technology, Ltd $(RCON)$ ("Recon" or the "Company"), a China-based independent solutions integrator in the oilfield service and environmental protection, electric power and coal chemical industries, today announced its financial results for fiscal year 2026.
Fiscal Year Ended June 30, 2026 Financial Highlights:
-- Total revenue increased by approximately RMB43.6 million ($6.4 million)
or 65.8% to RMB109.9 million ($16.2 million) for the year ended June 30,
2026 from RMB66.3 million ($9.8 million) for the same period in 2025.
-- Gross profit increased to RMB36.5 million ($5.4 million) for the year
ended June 30, 2026, from RMB15.2 million ($2.2 million) for the same
period in 2025.
-- Gross margin increased to 33.2% for the year ended June 30, 2026 from
23.0% for the same period in 2025.
-- Net loss was RMB31.6 million ($4.7 million) for the year ended June 30,
2026, a decrease of RMB12.1 million ($1.8 million) from net loss of
RMB43.7 million ($6.4 million) for the same period of 2025.
For the Years Ended
June 30,
------------------------------------------------------------------------------
Percentage
2026 2025 Increase /(Decrease) Change
--------------- ------------- ---------------------- ----------
(in RMB millions,
except earnings
per share;
differences due to
rounding)
Revenue RMB 109.9 RMB 66.3 RMB 43.6 65.8%
Gross profit 36.5 15.2 21.3 139.4%
Gross margin 33.2% 23.0% 10.2% --
Net loss (31.6) (43.7) (12.1) 27.6%
Net loss per share --
basic and diluted (266.52) (936.18) (669.66) 71.5%
Management Commentary
Mr. Shenping Yin, Founder and Chief Executive Officer of Recon, commented: "Fiscal 2026 marked a significant turning point for Recon. Revenue increased by 65.8% to RMB109.9 million, and gross margin was lifted to 33.2%. These factors, when combined, narrowed our net loss compared to the previous year. The primary growth driver was our strategic expansion into overseas oilfield projects.
We are pleased to announce that we have reached a significant milestone that we have been working towards for several years. On 28 September 2026, we held a ceremony to mark the commencement of operations at our waste plastic chemical recycling plant in Weifang, Shandong Province. The plant has been designed to process 40,000 tons of low-value waste plastics per year, with an expected output of 30,000 tons of pyrolysis oil and 6,000 tons of carbon residue. This strategic partnership provides Recon with a solid foundation in the circular economy, offering a new growth opportunity in addition to our core oilfield services.
As we look ahead to fiscal 2027, our strategic priorities are clear as we will bring the chemical recycling plant to commercial production, extend our overseas and offshore oilfield footprint, and rebuild our domestic service capabilities. Oil price volatility and broader macroeconomic conditions continue to present challenges, however, we enter the new year with a more diversified business portfolio, a strengthened margin profile and a diligent cost structure. These elements, we believe, will underpin sustainable, long-term growth for our shareholders."
Fiscal Year Ended 2026 Financial Results:
Revenue
Total revenues for the year ended June 30, 2026 were approximately RMB109.9 million ($16.2 million), an increase of approximately RMB43.6 million ($6.4 million) or 65.8% from RMB66.3 million ($9.8 million) for the same period in 2025.
-- Revenue from automation product and software increased by RMB35.6 million
($5.3 million) or 104.5%. The increase was primarily driven by a RMB44.2
million revenue increase from overseas oilfield projects, partially
offset by an RMB8.6 million decline in domestic business. The overseas
revenue growth benefited from a phase-II oilfield capacity construction
of a major overseas automation maintenance project. The domestic business
decline was mainly due to reduced maintenance efforts in the domestic
market during the period, as our focus shifted towards overseas projects.
Going forward, the Company will reallocate personnel from overseas to
strengthen domestic market maintenance services.
-- Revenue from equipment and accessories increased by RMB9.4 million ($1.4
million) or 51.2%. The increase in revenue from equipment and spare parts
was primarily driven by rising demand for new purchases and maintenance
of such items. This was due to the ongoing need of domestic oilfield
clients to maintain stable production levels.
-- Revenue from oilfield environmental protection increased by RMB2.0
million ($0.3 million) or 19.4% primarily due to an increase in the
settlement prices for some wastewater treatment clients.
-- Revenue from platform outsourcing services decreased by RMB3.5 million
($0.5 million) or 100.00%. FGS's operations were materially and adversely
affected by strategic shifts in its major clients' business decisions to
terminate online cooperation of third-party companies and unfavorable
changes in domestic industry policies. Consequently, FGS's revenue and
active business activities declined precipitously, resulting in zero
revenue for fiscal year 2026.
Cost of revenue
Cost of revenues increased from RMB51.0 million for the year ended June 30, 2025 to RMB73.4 million ($10.8 million) for the same period in 2026.
For the years ended June 30, 2025 and 2026, cost of revenue from automation product and software was approximately RMB28.6 million and RMB47.2 million ($7.0 million), respectively, representing an increase of approximately RMB18.6 million ($2.7 million) or 65.0%. The increase in cost of revenue from automation product and software was primarily attributable to increased revenue of automation products and software.
For the years ended June 30, 2025 and 2026, cost of revenue from equipment and accessories was approximately RMB13.2 million and RMB20.4 million ($3.0 million), respectively, representing an increase of approximately RMB7.2 million ($1.1 million) or 54.7%. The increase in costs of revenue was primarily driven by expanded business activity, mirroring the same factor behind the growth in revenue.
For the years ended June 30, 2025 and 2026, cost of revenue from oilfield environmental protection was approximately RMB8.5 million and RMB5.7 million ($0.8 million), respectively, representing a decrease of approximately RMB2.8 million ($0.4 million) or 33.1%. While actively pursuing new business opportunities in a constrained market, the Company undertook testing projects. Given their high uncertainty, equipment costs for these projects were fully expensed upon purchase in the prior period, resulting in lower costs in the current period compared to the prior period.
For the years ended June 30, 2025 and 2026, cost of revenue from platform outsourcing services was approximately RMB0.6 million and nil, respectively, representing a decrease of approximately RMB0.6 million ($0.1 million) or 100.0%. The reason for the decrease is consistent with that of the revenue decline.
Gross profit
Gross profit increased to RMB36.5 million ($5.4 million) for the year ended June 30, 2026 from RMB15.2 million ($2.2 million) for the same period in 2025. Our gross profit as a percentage of revenue increased to 33.2% for the year ended June 30, 2026 from 23.0% for the same period in 2025.
-- For the years ended June 30, 2025 and 2026, our gross profit from
automation product and software was approximately RMB5.5 million and
RMB22.5 million ($3.3 million), respectively, representing an increase in
gross profit of approximately RMB17.0 million ($2.5 million) or 310.4%.
The gross margin expansion to 32.3% was primarily driven by the
higher-margin overseas oilfield projects, which contributed RMB44.2
million of revenue, representing approximately 63% of automation segment
revenue for fiscal 2026. Excluding the overseas projects, our domestic
automation gross margin remained relatively stable.
-- For the years ended June 30, 2025 and 2026, gross profit from equipment
and accessories was approximately RMB5.2 million and RMB7.4 million ($1.1
million), respectively, representing an increase of approximately RMB2.2
million ($0.3 million) or 42.4%. The increase in gross profit was
consistent with the change in revenue. The gross margin for equipment and
accessories has remained relatively stable in this period.
-- For the years ended June 30, 2025 and 2026, gross profit from oilfield
environmental protection was approximately RMB1.7 million and RMB6.6
million ($1.0 million), respectively, representing an increase of RMB4.9
million ($0.7 million) or 288.2%. The lower gross profit in fiscal 2025
was mainly due to testing projects, where the related equipment used for
these projects was fully expensed as it was consumed during execution,
when we were not sure that revenue from these projects could be
recognized. The increase in gross margin from 16.9% to 53.4% was mainly
attributable to the absence, in fiscal 2026, of the one-time testing
project costs that were fully expensed as incurred in fiscal 2025, when
revenue recognition for those testing projects remained uncertain.
Excluding the impact of such one-time testing costs, the normalized gross
margin for fiscal 2025 would have been higher, and the fiscal 2026 margin
of 53.4% reflects a normal standard in settlement prices for certain
wastewater treatment clients together with a more favorable project mix.
-- For the years ended June 30, 2025 and 2026, gross profit from platform
outsourcing services was approximately RMB2.8 million and nil,
respectively, representing a decrease of approximately RMB2.8 million
($0.4 million) or 100.0%. The decrease in gross profit was consistent
with the change in revenue.
Operating expenses
Selling expenses decreased by 43.6%, or RMB4.1 million ($0.6 million), from RMB9.3 million ($1.4 million) in the year ended June 30, 2025 to RMB5.2 million ($0.8 million) in the same period of 2026.
General and administrative expenses increased by 11.8%, or RMB5.8 million ($0.9 million), from RMB49.6 million ($7.3 million) in the year ended June 30, 2025 to RMB55.4 million ($8.2 million) in the same period of 2026.
Net recovery of credit losses of RMB2.9 million ($0.4 million) for the year ended June 30, 2025 as compared to net provision for credit losses of RMB4.1 million ($0.6 million) for the same period in 2026.
Research and development expenses decreased by 21.7%, or RMB3.6 million ($0.5 million) from RMB16.4 million ($2.4 million) for the year ended June 30, 2025 to RMB12.9 million ($1.9 million) for the same period of 2026.
Loss from operations
Loss from operations was RMB41.2 million ($6.1 million) for the year ended June 30, 2026, compared to a loss of RMB57.3 million ($8.4 million) for the same period of 2025. This RMB16.1 million ($2.4 million) decrease in loss from operations was mainly driven by higher gross profit, as previously discussed.
Change in fair value of warrant liability
The Company classified the warrants issued in connection with common share offering as liabilities at their fair value and adjusted the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. Gain in change in fair value of warrant liability was RMB6,226 ($917) and RMB671 ($99) for the years ended June 30, 2025 and 2026, respectively. The primary reason for the decrease in the fair-value gain of the warrant liability was the change in the fair value assessment price.
Interest income
Net interest income was RMB10.9 million ($1.6 million) for the year ended June 30, 2026, compared to net interest income of RMB12.3 million ($1.8 million) for the same period of 2025. The RMB1.4 million ($0.2 million) decrease in net interest income was primarily attributable to the Company's receipt of partial repayments of loans to third parties, partially offset by interest income from outstanding loans to third parties, during the year ended June 30, 2026.
Other income (expenses), net.
Other net expenses was RMB1.3 million ($0.2 million) for the year ended June 30, 2026, compared to other net income of RMB1.3 million ($0.2 million) for the same period of 2025. The RMB2.6 million ($0.4 million) decrease in other net income was primarily due to the closure of Qinghai BHD and the disposal of 51% equity interest in MSJ, which together resulted in a total loss on equity shares investments of RMB1.1 million. Additionally, following the closure of the Qinghai office, RMB0.6 million in payables that could no longer be settled was recognized as income, RMB0.2 million in receivables that could not be collected was written off as a loss and an increase in foreign exchange transaction expenses of RMB1.0 million due to the fluctuation of exchange rate of RMB against US dollars during the year ended June 30, 2026 compared to the same period of 2025.
Net loss
As a result of the factors described above, net loss was RMB31.6 million ($4.7 million) for the year ended June 30, 2026, a decrease of RMB12.1 million ($1.8 million) from net loss of RMB43.7 million ($6.4 million) for the same period of 2025.
Cash and short-term investment
As of June 30, 2026, we had cash in the amount of approximately RMB29.7 million ($4.4 million) and short-term investment in bank fixed income product of approximately RMB9.0 million ($1.3 million). As of June 30, 2025, we had cash in the amount of approximately RMB98.9 million ($14.6 million) and short-term investment in bank fixed income product of approximately RMB3.6 million ($0.5 million).
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 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 field service industry. RCON also has developed stable long-term cooperation relationship with its major clients. Since 2023, Recon also entered into the business of chemical recycling of waste plastic. 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.
RECON TECHNOLOGY, LTD
CONSOLIDATED BALANCE SHEETS
As of June, 3
As of June, 30 As of June, 30 0
------------------- ------------------ -------------
2025 2026 2026
------------------- ------------------ -------------
RMB RMB US Dollars
------------------- ------------------ -------------
ASSETS
Current assets
Cash Yen 98,874,577 Yen 29,745,574 4,383,955
Restricted cash 8,204 104 16
Short-term investments 3,599,211 9,005,007 1,327,174
Notes receivable -- 200,000 29,476
Accounts receivable, net 35,852,484 46,142,449 6,800,555
Inventories, net 1,344,588 1,330,874 196,147
Other receivables, net 3,760,881 9,879,518 1,456,061
Other receivables - related
parties 67,976 400,000 58,953
Loans to third parties-short
term 141,564,073 46,358,973 6,832,467
Purchase advances, net 14,619,556 57,757,856 8,512,455
Contract costs, net 53,547,408 25,059,648 3,693,335
Prepaid expenses 389,216 801,617 118,140
Prepaid consideration for
acquisition of
noncontrolling interest -- 1,950,000 287,394
Deferred offering cost 2,529,724 339,255 50,000
------------- --- ------------- ------------
Total Current Assets 356,157,898 228,970,875 33,746,128
Property and equipment, net 19,986,635 17,158,744 2,528,886
Construction in progress 12,000,900 86,366,301 12,728,818
Investment in unconsolidated
entity, net -- 1,824,974 268,968
Loans to third parties-long
term 118,500,000 283,684,309 41,809,894
Operating lease right-of-use
assets, net (including
Yen696,851 and Yen2,481,013
($365,656) from related
parties as of June 30,
2025 and June 30, 2026,
respectively) 18,975,692 21,441,571 3,160,097
------------- --- ------------- ------------
Total Assets Yen 525,621,125 Yen 639,446,774 $ 94,242,791
=== ============= === ============= ============
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans Yen 11,582,336 Yen 11,306,258 $ 1,666,336
Accounts payable 19,398,669 36,902,581 5,438,767
Other payables 6,154,889 3,430,099 505,534
Other payable- related
parties 2,927,377 649,559 95,733
Contract liabilities 4,719,255 1,669,736 246,089
Contract liabilities- related
parties -- 400,000 58,953
Accrued payroll and
employees' welfare 3,212,227 4,927,089 726,163
Taxes payable 795,629 1,481,308 218,318
Short-term borrowings -
related parties 10,017,250 20,033,917 2,952,634
Operating lease liabilities -
current (including
Yen355,601 and Yen1,682,080
($247,908) from related
parties as of June 30,
2025 and June 30, 2026,
respectively) 1,761,231 2,924,605 431,033
------------- --- ------------- ------------
Total Current Liabilities 60,568,863 83,725,152 12,339,560
Operating lease liabilities -
non-current (including nil
and Yen1,026,433 ($151,278)
from related parties as of
June 30, 2025 and June 30,
2026, respectively) 1,081,827 3,291,220 485,066
Long-term borrowings -
related party 10,000,000 -- --
Warrant liability -
non-current 688 -- --
---- ------------- --- ------------- ------------
Total Liabilities 71,651,378 87,016,372 12,824,626
============= === ============= ============
Commitments and
Contingencies
Shareholders' Equity
Class A ordinary shares,
$0.02 U.S. dollar par value,
2,500,000 shares authorized
and $0.02 U.S. dollar par
value, 15,000,000 shares
authorized as of June 30,
2025 and June 30, 2026,
respectively; 53,154 shares
and 353,154 share issued
and outstanding as of June
30, 2025 and June 30, 2026,
respectively * 101,548 142,646 21,023
Class B ordinary shares,
$0.0001 U.S. dollar par
value, 80,000,000 authorized
shares and $0.0001 U.S.
dollar par value,
200,000,000 shares
authorized as of June 30,
2025 and June 30, 2026,
respectively; 20,000,000
shares and 20,000,000
shares issued and
outstanding as of June 30,
2025 and June 30, 2026,
respectively 14,038 14,038 2,069
Additional paid-in capital 692,569,747 827,448,759 121,950,857
Statutory reserve 4,148,929 4,148,929 611,476
Accumulated deficit (262,900,639) (292,560,687) (43,118,110)
Accumulated other
comprehensive income 33,493,895 27,133,454 3,998,976
------------- --- ------------- ------------
Total Recon Technology, Ltd'
equity 467,427,518 566,327,139 83,466,291
Non-controlling interests (13,457,771) (13,896,737) (2,048,126)
------------- --- ------------- ------------
Total shareholders' equity 453,969,747 552,430,402 81,418,165
------------- --- ------------- ------------
Total Liabilities and
Shareholders' Equity Yen 525,621,125 Yen 639,446,774 $ 94,242,791
=== ============= === ============= ============
* Retrospectively restated for the 1-for-200 reverse stock split on August 18,
2026.
RECON TECHNOLOGY, LTD
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the years ended
June 30,
----------------------------------------------------------------------
2024 2025 2026 2026
------------------ ----------------- ----------------- ------------
RMB RMB RMB US Dollars
------------------ ----------------- ----------------- ------------
Revenue Yen 68,854,280 Yen 66,285,032 Yen 109,898,245 $ 16,196,997
Cost of revenue 47,976,836 51,044,495 73,410,205 10,819,325
------------ --- ------------ --- ------------ -----------
Gross profit 20,877,444 15,240,537 36,488,040 5,377,672
------------ --- ------------ --- ------------ -----------
Selling and
distribution expenses 10,374,388 9,343,480 5,267,001 776,260
General and
administrative
expenses 63,765,583 49,645,680 55,495,066 8,178,961
Allowance for (net
recovery of) credit
losses 4,086,505 (2,856,803) 4,094,917 603,516
Research and
development expenses 14,288,879 16,427,892 12,858,639 1,895,129
------------ --- ------------ --- ------------ -----------
Operating expenses 92,515,355 72,560,249 77,715,623 11,453,866
------------ --- ------------ --- ------------ -----------
Loss from operations (71,637,911) (57,319,712) (41,227,583) (6,076,194)
------------ --- ------------ --- ------------ -----------
Other income
(expenses)
Subsidy income 131,428 85,762 37,185 5,480
Interest income 22,897,763 13,390,041 11,944,760 1,760,440
Interest expense (1,070,449) (1,110,984) (1,041,518) (153,501)
Loss from investment in
unconsolidated entity -- -- (1,102,361) (162,468)
Loss (gain) in fair
value changes of
warrants liability (933,995) 6,226 671 99
Foreign exchange
transaction gain
(loss) (881,695) 952,815 (79,217) (11,675)
Other income 59,049 296,155 (178,542) (26,314)
------------ --- ------------ --- ------------ -----------
Other income, net 20,202,101 13,620,015 9,580,978 1,412,061
------------ --- ------------ --- ------------ -----------
Loss before income tax (51,435,810) (43,699,697) (31,646,605) (4,664,133)
Income tax expenses
(benefits) 30 1,580 (1,609) (237)
------------ --- ------------ --- ------------ -----------
Net loss (51,435,840) (43,701,277) (31,644,996) (4,663,896)
Less: Net loss
attributable to
non-controlling
interests (1,564,581) (1,112,723) (1,984,948) (292,545)
------------ --- ------------ --- ------------ -----------
Net loss
attributable to
Recon
Technology, Ltd Yen (49,871,259) Yen (42,588,554) Yen (29,660,048) $(4,371,351)
=== ============ === ============ === ============ ===========
Comprehensive
loss
Net loss (51,435,840) (43,701,277) (31,644,996) (4,663,896)
Foreign currency
translation
adjustment 2,009,476 (3,642,754) (6,360,441) (937,413)
------------ --- ------------ --- ------------ -----------
Comprehensive loss (49,426,364) (47,344,031) (38,005,437) (5,601,309)
Less: Comprehensive
loss attributable to
non- controlling
interests (1,564,581) (1,112,723) (1,984,948) (292,545)
------------ --- ------------ --- ------------ -----------
Comprehensive
loss
attributable to
Recon
Technology, Ltd Yen (47,861,783) Yen (46,231,308) Yen (36,020,489) $(5,308,764)
=== ============ === ============ === ============ ===========
Net loss per
share - basic
and diluted* Yen (1,974.16) Yen (936.18) Yen (266.52) $ (39.28)
=== ============ === ============ === ============ ===========
Weighted - average
shares - basic and
diluted* 25,262 45,492 111,286 111,286