RECON ISSUES SHAREHOLDER UPDATE

About this update from Recon Technology, Ltd.

[{"type":"text","content":"BEIJING, July 20, 2022 /PRNewswire/ -- Recon Technology, Ltd (NASDAQ: RCON) (\"Recon\" or the \"Company\") announced today an update to investors and shareholders on the current state of its business, challenges facing its business, its current state of affairs and its plans for the future. Management views this update as a step toward enhancing regular communications with shareholders and investors.\nThe pandemic has impacted the business plans of many companies, and Recon has been no exception. The pandemic has directly affected the Company's execution of corporate strategies, contracts, communication plans and approach to the capital markets, especially our interaction with investors.\nThe cyclical nature of the oil industry, which is measured in decades, has also had a great impact on the Company. If oil prices continue to rise as anticipated, the Company expects that its business, which focuses on providing equipment and services to large oil companies in the production and development phases of their oil fields, will benefit as customers increase their budgets for capitalized expenditures, such as exploration and development. For these reasons, the Company expects that its performance will always be affected by not only the oil price fluctuations, but also the six-month period in which oil companies' performances are adjusted to such oil price fluctuations. Therefore, Company shareholders can expect that our performance has been growing from year 2020 to now due to increasing oil prices, including through the completed fiscal 2022; and it is expected that our business will continue to grow in fiscal 2023. The Company expects to achieve an average annual growth rate of 30% in the next three fiscal years.\nIn China, the Company's business development is overlaid with another small cycle: the customer decision making cycle. Most of the Company's longstanding customers have a uniform budgeting process. March is usually the time they make their budget and development plans for the year, and funds are usually allocated in June. Thus, the first half of each natural year is a slow period for the Company. During this lull, the Company focuses on close communication with its customers, which affects the financial performance for the entire year.\nStarting in 2019, the Company has invested in Future Gas Station (Beijing) Technology L...

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