After declining since its latest earnings, Recon Technology Ltd. (RCON) stock finally rebounded on Monday, April 4, 2022. Starting slow, the stock recovered 3.88% in the regular session to climb up by a nice 25.23% after hours. Thus, RCON reached a value of $1.34 per share in the after-hours against its prior close at $1.07.
RCON’s Rebound
The oil industry stock’s rebound on Monday can be attributed to two Schedule 13D filings posted on the day. The two statements on Schedule 13D related to RCON’s Class B Ordinary Shares under the company’s 2021 Equity Plan. The filings detail over 5% equity ownership of RCON’s CEO & directors Mr. Shen Ping Yin and CTO & director Mr. Chen Guangqiang. Both the leadership member received the shares in consideration of their services to the company.
Where Does the Oil Industry Stand?
The oil industry stocks have been bullish lately as crude oil prices continue its rise. While many factors including the Russia-Ukraine conflict, supply-chain constraints, etc. have contributed to the spike in oil prices, the level doesn’t seem to be flatlining in the near term. Poised for a continued rise in prices, oil stocks seem to have further scope for growth.
Moreover, the industry is currently undergoing a digital transformation as companies look for increased efficiency. Powering modern solutions, the Oil and gas industry is investing in key growth technologies like cloud and AI.
Like many others, to overcome the increasing competition in the market, RCON is also strategically investing in the integration of automation technology.
RCON’s Status & Outlook
The company reported mammoth growth in its H1 fiscal 2022 financials with revenue improving over 100% YOY and earnings becoming positive. Given the continued rise in oil prices, RCON is expecting boosted growth in the second half of 2022 as well. While supply chain issues still persist and competition is increasing more than ever, the company plans to strengthen its competitive advantage. With nice cash reserves from its June 2021 financing, the company plans to expand its business scope and improve long-term profitability. Hence, the company’s outlook so far is very bright.
Conclusion
Despite reporting huge YOY improvement in its latest financials, the stock suffered a downtrend since the earnings were released. While the downtrend was ultimate to be broken by rebound energy, the latest SEC filings helped RCON enter the green. In conclusion, owing to the SEC filings, the stock had a bullish day on April 4.
