
Core Viewpoint - Recon Technology, Ltd reported flat revenue for the first six months of fiscal year 2024 compared to the same period in 2022, with a net loss reduction indicating some operational improvements despite challenges in specific segments [1][3]. Financial Highlights - Total revenue for the six months ended December 31, 2023, was RMB 45.3 million ($6.4 million), unchanged from RMB 45.6 million ($6.4 million) in 2022, reflecting a decrease of approximately RMB 0.3 million (0.7%) [2][4]. - Gross profit decreased to RMB 12.1 million ($1.7 million) from RMB 13.1 million ($1.8 million) in the same period of 2022, with a gross margin decline to 26.7% from 28.8% [2][5]. - Net loss was RMB 23.1 million ($3.3 million), a decrease of RMB 6.8 million ($1.0 million) from a net loss of RMB 29.9 million ($4.2 million) in 2022 [2][6]. Revenue Breakdown - Revenue from automation products and software decreased by RMB 1.5 million ($0.2 million) or 7.9%, while revenue from equipment and accessories increased by RMB 8.1 million ($1.1 million) or 83.6% [4][5]. - Revenue from oilfield environmental protection decreased by RMB 4.7 million ($0.7 million) or 37.0%, primarily due to reduced production intensity from customers [4][5]. - Revenue from platform outsourcing services decreased by RMB 2.2 million ($0.3 million) or 55.3%, attributed to reduced demand from former gas station customers [4][5]. Cost and Expenses - Cost of revenues increased slightly from RMB 32.4 million ($4.6 million) in 2022 to RMB 33.2 million ($4.7 million) in 2023 [5][6]. - Selling expenses increased by 13.1% to RMB 4.5 million ($0.6 million), while general and administrative expenses decreased by 15.9% to RMB 22.0 million ($3.1 million) [6][12]. - Research and development expenses increased by 32.4% to RMB 6.8 million ($1.0 million) [6][12]. Operational Insights - The CEO highlighted a good performance in the oilfield services business, with signs of recovery in onshore oil and gas fields and new customer development in offshore fields [3][6]. - The company is in the process of constructing a chemical plant for plastic waste recycling, which is expected to generate significant returns and meet environmental obligations [3][6]. Cash and Investments - As of December 31, 2023, cash amounted to approximately RMB 121.8 million ($17.2 million) and short-term investments were approximately RMB 134.0 million ($18.9 million) [6][10].