Recon Technology, Ltd. (NASDAQ:RCON)
Recon Technology, Ltd. (NASDAQ:RCON) shares gained 7% after the Chinese software maker announced the signing of a $2 million deal with Qinghai Oilfield Company, a PetroChina subsidiary. The agreement is for the supply of the company’s proprietary chemical compound agents and microbiological treatment agents for oil sewage treatment.
RCON Investors Reaction
Investors initially pushed the stock up 30% to $2.60, before it dropped to end the day at $1.82 a share. The rally affirmed a bullish run on the stock that began earlier in the month. The stock is up by more than 40% for the year as it continues to trade in a strong uptrend. The stock faces immediate resistance at the $2.64 level – its 52-week high.
The Qinghai Oil Field agreement represents a significant size increase in Recon Technology, Ltd. (NASDAQ:RCON) wastewater treatment agreement. The company will begin recording revenues under the project in the current quarter. All goods to be delivered for the project will be delivered by the company.
“This is a major progression in our partnership with Qinghai Oilfield, and an indication of the upside potential of Recon in the oilfield environmental protection market. Our oilfield waste water treatment business has continued to expand rapidly, as agreements have continued to grow in terms of size and number. In fiscal 2017, we grew our revenue in this business by over 371%,” said CEO Yin Shenping.
According to Mr. Shenping, wastewater treatment represents a significant opportunity that should accelerate the company’s next phase of growth. As countries push for greater environmental protection, Increased regulatory oversight should be a key driver of demand for Recon Technology, Ltd. (NASDAQ:RCON) products.
Sewage Treatment Strategic Cooperation Agreement
In addition, Recon Technology, Ltd. (NASDAQ:RCON) has signed a three-year strategic cooperation agreement with Beijing OriginWater Purification Engineering Technology Co. Pursuant to the agreement, the two companies are to join forces for the promotion of advanced sewage treatment technology in Chinese oilfield markets. The two companies are also to work together in providing interactive solutions and services for tackling industrial water pollution.
“Recon Technology has provided reliable and efficient technologies to China’s major oilfield companies, such as CNPC and Sinopec, for years. Recon Technology has made some strides in oily sewage treatment for last two years,” said Mr. Shenping.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.