Recon Technology, Ltd Reports Financial Results for the First Six Months of Fiscal Year 2024
First Six Months of Fiscal 2024 Financial Highlights:
- Total revenuewas
- Gross profit decreased to
- Gross margin decreased to 26.7% for the six months ended
- Net loss was
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For the Six Months Ended |
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(in RMB millions, except
earnings per |
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2023 |
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2022 |
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Increase /(Decrease) |
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Percentage Change |
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Revenue |
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RMB |
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45.3 |
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RMB |
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45.6 |
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RMB |
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0.3 |
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(0.7) |
% |
Gross profit |
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12.1 |
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13.1 |
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(1.0) |
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(7.8) |
% |
Gross margin |
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26.7 |
% |
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28.8 |
% |
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(7.8) |
% |
/ |
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Net loss |
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(23.1) |
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(29.9) |
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(6.8) |
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22.6 |
% |
Net loss per share – Basic |
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(8.27) |
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(15.46) |
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(7.19) |
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46.5 |
% |
Management Commentary
"We have had a good six months in all of our major businesses, especially our oilfield services business," said Mr.
First Six Months Fiscal 2024 Financial Results:
Revenue
Total revenues for the six months ended
- Revenue from automation product and software decreased by
- Revenue from equipment and accessories increased by
- Revenue from oilfield environmental protection decreased by
- Revenue from platform outsourcing services decreased by
Cost of revenue
Cost of revenues increased slightly from
- For the six months ended
- For the six months ended
- For the six months ended
- For the six months ended
Gross profit
Gross profit decreased to
- For the six months ended
- For the six months ended
- For the six months ended
- For the six months ended
Operating expenses
Selling expenses increased by 13.1%, or
General and administrative expenses decreased by 15.9%, or
The Company also recorded a net recovery of credit losses of
Research and development expenses remained relatively stable with a slight increase by 32.4%, or
Loss from operations
Loss from operations was
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. Loss in fair value changes of warrant liability was
Interest income
Net interest income was
Other income (expenses), net.
Other net expenses was
Net loss
As a result of the factors described above, net loss was
Cash and short-term investment
As of
About
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
For more information, please contact:
The Company
Ms.
Chief Financial Officer
Phone: +86 (10) 8494-5799
Email: info@recon.cn
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CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS |
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(UNAUDITED) |
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As of June, 30 |
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As of December, 31 |
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As of December, 31 |
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2023 |
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2023 |
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2023 |
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RMB |
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RMB |
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US Dollars |
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ASSETS |
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Current assets |
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Cash |
|
¥ |
104,125,800 |
|
¥ |
121,848,777 |
|
$ |
17,162,041 |
Restricted cash |
|
|
731,545 |
|
|
3,904 |
|
|
550 |
Short-term investments |
|
|
184,184,455 |
|
|
133,950,650 |
|
|
18,866,554 |
Notes receivable |
|
|
3,742,390 |
|
|
12,532,717 |
|
|
1,765,196 |
Accounts receivable, net |
|
|
27,453,415 |
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|
30,813,885 |
|
|
4,340,045 |
Inventories, net |
|
|
6,330,701 |
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|
1,855,535 |
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|
261,347 |
Other receivables, net |
|
|
2,185,733 |
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|
4,184,778 |
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|
589,414 |
Loans to third parties |
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|
123,055,874 |
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|
79,374,144 |
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11,179,614 |
Purchase advances, net |
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2,680,456 |
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1,996,413 |
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281,189 |
Contract costs, net |
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49,572,685 |
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37,323,824 |
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5,256,951 |
Prepaid expenses |
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350,119 |
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295,384 |
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|
41,603 |
Operating lease right-of-use assets, net - current (including ¥nil and ¥113,361 ( |
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879,288 |
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123,845 |
Total current assets |
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504,413,173 |
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425,059,299 |
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59,868,349 |
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Property and equipment, net |
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|
24,752,864 |
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23,492,024 |
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|
3,308,782 |
Long-term other receivables, net |
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|
3,640 |
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— |
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— |
Long-term loan to third parties |
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— |
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18,500,000 |
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|
2,605,671 |
Operating lease right-of-use assets, net - non-current (including
¥335,976
and ¥nil from a related party as of |
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|
2,654,900 |
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16,204,906 |
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|
2,282,413 |
Total Assets |
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¥ |
531,824,577 |
|
¥ |
483,256,229 |
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$ |
68,065,215 |
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LIABILITIES AND EQUITY |
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Current liabilities |
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Short-term bank loans |
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¥ |
12,451,481 |
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¥ |
12,336,285 |
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$ |
1,737,529 |
Accounts payable |
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|
10,791,721 |
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|
12,062,861 |
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1,699,018 |
Other payables |
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|
5,819,010 |
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1,688,166 |
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|
237,773 |
Other payable- related parties |
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|
2,592,395 |
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2,209,017 |
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311,134 |
Contract liabilities |
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2,748,365 |
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4,888,749 |
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|
688,566 |
Accrued payroll and employees' welfare |
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|
2,382,516 |
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|
2,399,919 |
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|
338,022 |
Taxes payable |
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|
1,163,006 |
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|
1,702,898 |
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|
239,848 |
Short-term borrowings - related parties |
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|
20,018,222 |
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20,019,889 |
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2,819,742 |
Operating lease liabilities - current (including
¥335,976
and ¥113,361 ( |
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|
3,066,146 |
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1,038,354 |
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|
146,248 |
Warrant liability - current |
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8,519,880 |
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1,200,000 |
Total Current Liabilities |
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|
61,032,862 |
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|
66,866,018 |
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|
9,417,880 |
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Operating lease liabilities - non-current (including ¥
nil
and ¥nil from a related party as of |
|
|
25,144 |
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|
25,869 |
|
|
3,644 |
Warrant liability - non-current |
|
|
31,615,668 |
|
|
993,986 |
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|
140,000 |
Total Liabilities |
|
|
92,673,674 |
|
|
67,885,873 |
|
|
9,561,524 |
|
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Commitments and Contingencies |
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Equity |
|
|
|
|
|
|
|
|
|
Class A Ordinary Shares,
|
|
|
26,932 |
|
|
27,791 |
|
|
3,914 |
Class B Ordinary Shares,
|
|
|
4,693 |
|
|
4,693 |
|
|
661 |
Additional paid-in capital* |
|
|
580,340,061 |
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|
584,275,905 |
|
|
82,293,540 |
Statutory reserve |
|
|
4,148,929 |
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|
4,148,929 |
|
|
584,364 |
Accumulated deficit |
|
|
(170,440,826) |
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|
(192,994,848) |
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|
(27,182,756) |
Accumulated other comprehensive income |
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|
35,127,173 |
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|
30,517,774 |
|
|
4,298,339 |
Total shareholders' equity |
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449,206,962 |
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425,980,244 |
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59,998,062 |
Non-controlling interests |
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|
(10,056,059) |
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|
(10,609,888) |
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|
(1,494,371) |
Total equity |
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|
439,150,903 |
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|
415,370,356 |
|
|
58,503,691 |
Total Liabilities and Equity |
|
¥ |
531,824,577 |
|
¥ |
483,256,229 |
|
$ |
68,065,215 |
* Retrospectively restated for the 1-for-18 reverse stock split on |
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
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(UNAUDITED) |
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For the six months ended |
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2022 |
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2023 |
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2023 |
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RMB |
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RMB |
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USD |
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Revenue |
|
|
|
|
|
|
|
|
|
Revenue |
|
¥ |
45,559,591 |
|
¥ |
45,256,672 |
|
$ |
6,374,269 |
Revenue |
|
|
45,559,591 |
|
|
45,256,672 |
|
|
6,374,269 |
|
|
|
|
|
|
|
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Cost of revenue |
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
32,427,772 |
|
|
33,150,930 |
|
|
4,669,211 |
Cost of revenue |
|
|
32,427,772 |
|
|
33,150,930 |
|
|
4,669,211 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
13,131,819 |
|
|
12,105,742 |
|
|
1,705,058 |
|
|
|
|
|
|
|
|
|
|
Selling and distribution expenses |
|
|
4,021,899 |
|
|
4,547,115 |
|
|
640,448 |
General and administrative expenses |
|
|
26,212,540 |
|
|
22,042,042 |
|
|
3,104,557 |
Allowance for (net recovery of) credit losses |
|
|
(7,141,708) |
|
|
1,553,364 |
|
|
218,787 |
Research and development expenses |
|
|
5,109,302 |
|
|
6,765,287 |
|
|
952,871 |
Operating expenses |
|
|
28,202,033 |
|
|
34,907,808 |
|
|
4,916,663 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(15,070,214) |
|
|
(22,802,066) |
|
|
(3,211,605) |
|
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
|
|
|
|
|
|
|
Subsidy income |
|
|
85,602 |
|
|
131,428 |
|
|
18,511 |
Interest income |
|
|
5,187,649 |
|
|
12,060,640 |
|
|
1,698,706 |
Interest expense |
|
|
(169,091) |
|
|
(1,683,289) |
|
|
(237,086) |
Loss in fair value changes of warrants liability |
|
|
(20,097,665) |
|
|
(1,941,195) |
|
|
(273,412) |
Foreign exchange transaction gain (loss) |
|
|
42,455 |
|
|
(76,040) |
|
|
(10,710) |
Other income |
|
|
157,753 |
|
|
(8,701,288) |
|
|
(1,225,550) |
Other income, net |
|
|
(14,793,297) |
|
|
(209,744) |
|
|
(29,541) |
Loss before income tax |
|
|
(29,863,511) |
|
|
(23,011,810) |
|
|
(3,241,146) |
Income tax expenses |
|
|
9,180 |
|
|
96,041 |
|
|
13,527 |
Net loss |
|
|
(29,872,691) |
|
|
(23,107,851) |
|
|
(3,254,673) |
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|
|
|
|
|
|
|
|
Less: Net loss attributable to non-controlling interests |
|
|
3,727 |
|
|
(553,829) |
|
|
(78,005) |
Net loss attributable to |
|
¥ |
(29,876,418) |
|
¥ |
(22,554,022) |
|
$ |
(3,176,668) |
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(29,872,691) |
|
|
(23,107,851) |
|
|
(3,254,673) |
Foreign currency translation adjustment |
|
|
9,663,701 |
|
|
(4,609,399) |
|
|
(649,220) |
Comprehensive loss |
|
|
(20,208,990) |
|
|
(27,717,250) |
|
|
(3,903,893) |
Less: Comprehensive Income (loss) attributable to non- controlling interests |
|
|
3,727 |
|
|
(553,829) |
|
|
(78,005) |
Comprehensive loss attributable to |
|
¥ |
(20,212,717) |
|
¥ |
(27,163,421) |
|
$ |
(3,825,888) |
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and diluted* |
|
¥ |
(15.46) |
|
¥ |
(8.27) |
|
$ |
(1.16) |
|
|
|
|
|
|
|
|
|
|
Weighted - average shares -basic and diluted* |
|
|
1,932,544 |
|
|
2,728,056 |
|
|
2,728,056 |
* Retrospectively restated for the 1-for-18 reverse stock split on |
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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS |
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(UNAUDITED) |
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For the six months ended |
|||||||
|
|
2022 |
|
2023 |
|
2023 |
|||
|
|
RMB |
|
RMB |
|
US Dollars |
|||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net loss |
|
¥ |
(29,872,691) |
|
¥ |
(23,107,851) |
|
$ |
(3,254,673) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,952,625 |
|
|
1,426,971 |
|
|
200,985 |
Loss (gain) from disposal of equipment |
|
|
(12,782) |
|
|
32,252 |
|
|
4,543 |
Gain in fair value changes of warrants liability |
|
|
20,097,665 |
|
|
10,461,075 |
|
|
1,473,412 |
Allowance for (net recovery of) credit losses |
|
|
(7,141,708) |
|
|
1,553,364 |
|
|
218,787 |
Allowance for slow moving inventories |
|
|
245,990 |
|
|
(350,637) |
|
|
(49,386) |
Amortization of right of use assets |
|
|
1,627,888 |
|
|
570,959 |
|
|
80,418 |
Restricted shares issued for management and employees |
|
|
1,796,417 |
|
|
2,866,560 |
|
|
403,747 |
Restricted shares issued for services |
|
|
4,304,857 |
|
|
1,070,143 |
|
|
150,726 |
Accrued interest income from loans to third parties |
|
|
(3,757,041) |
|
|
(4,415,298) |
|
|
(621,882) |
Accrued interest income from short-term investment |
|
|
— |
|
|
(2,352,250) |
|
|
(331,307) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Notes receivable |
|
|
2,356,367 |
|
|
(8,790,327) |
|
|
(1,238,092) |
Accounts receivable |
|
|
(12,501,742) |
|
|
(4,412,034) |
|
|
(621,422) |
Inventories |
|
|
(1,158,138) |
|
|
4,863,435 |
|
|
685,000 |
Other receivables |
|
|
(9,673,906) |
|
|
5,465,227 |
|
|
769,761 |
Purchase advances |
|
|
(449,477) |
|
|
558,040 |
|
|
78,598 |
Contract costs |
|
|
9,765,091 |
|
|
10,442,916 |
|
|
1,470,854 |
Prepaid expense |
|
|
10,345 |
|
|
54,734 |
|
|
7,709 |
Prepaid expense - related parties |
|
|
275,000 |
|
|
— |
|
|
— |
Operating lease liabilities |
|
|
(1,619,168) |
|
|
(2,027,067) |
|
|
(285,506) |
Accounts payable |
|
|
247,387 |
|
|
1,271,140 |
|
|
179,036 |
Other payables |
|
|
(1,414,691) |
|
|
(4,103,150) |
|
|
(577,918) |
Other payables-related parties |
|
|
231,133 |
|
|
(383,378) |
|
|
(53,998) |
Contract liabilities |
|
|
(1,945,877) |
|
|
2,140,385 |
|
|
301,467 |
Accrued payroll and employees' welfare |
|
|
27,710 |
|
|
17,399 |
|
|
2,451 |
Taxes payable |
|
|
677,510 |
|
|
537,591 |
|
|
75,718 |
Net cash used in operating activities |
|
|
(25,931,236) |
|
|
(6,609,801) |
|
|
(930,972) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(821,272) |
|
|
(216,082) |
|
|
(30,435) |
Proceeds from disposal of equipment |
|
|
31,950 |
|
|
20,000 |
|
|
2,817 |
Purchase of land use right |
|
|
— |
|
|
(15,000,251) |
|
|
(2,112,741) |
Repayments of loans to third parties |
|
|
25,194,900 |
|
|
44,613,948 |
|
|
6,283,743 |
Payments made for loans to third parties |
|
|
(58,488,100) |
|
|
(16,600,000) |
|
|
(2,338,061) |
Payments for short-term investments |
|
|
— |
|
|
(131,598,400) |
|
|
(18,535,247) |
Redemption of short-term investments |
|
|
— |
|
|
180,338,865 |
|
|
25,400,198 |
Net cash (used in) generated by investing activities |
|
|
(34,082,522) |
|
|
61,558,080 |
|
|
8,670,274 |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from short-term bank loans |
|
|
1,000,000 |
|
|
— |
|
|
— |
Repayments of short-term bank loans |
|
|
— |
|
|
(123,000) |
|
|
(17,324) |
Proceeds from short-term borrowings-related parties |
|
|
10,000,000 |
|
|
10,000,000 |
|
|
1,408,471 |
Repayments of short-term borrowings-related parties |
|
|
(9,000,000) |
|
|
(10,018,222) |
|
|
(1,411,037) |
Repayments of long-term borrowings-related party |
|
|
(476,927) |
|
|
— |
|
|
— |
Redemption of warrants |
|
|
— |
|
|
(31,866,604) |
|
|
(4,488,317) |
Net cash provided by (used in) financing activities |
|
|
1,523,073 |
|
|
(32,007,826) |
|
|
(4,508,207) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate fluctuation on cash and restricted cash |
|
|
10,633,748 |
|
|
(5,945,117) |
|
|
(837,352) |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and restricted cash |
|
|
(47,856,937) |
|
|
16,995,336 |
|
|
2,393,743 |
Cash and restricted cash at beginning of year |
|
|
317,698,417 |
|
|
104,857,345 |
|
|
14,768,848 |
Cash and restricted cash at end of year |
|
¥ |
269,841,480 |
|
¥ |
121,852,681 |
|
$ |
17,162,591 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
|
Cash paid during the year for interest |
|
¥ |
624,321 |
|
¥ |
468,440 |
|
$ |
64,601 |
Cash paid during the year for taxes |
|
¥ |
9,180 |
|
¥ |
16,505 |
|
$ |
2,276 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash and restricted cash, beginning of year |
|
|
|
|
|
|
|
|
|
Cash |
|
¥ |
316,974,857 |
|
¥ |
104,125,800 |
|
¥ |
14,665,812 |
Restricted cash |
|
|
723,560 |
|
|
731,545 |
|
|
103,036 |
Cash and restricted cash, beginning of year |
|
¥ |
317,698,417 |
|
¥ |
104,857,345 |
|
$ |
14,768,848 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash and restricted cash, end of year |
|
|
|
|
|
|
|
|
|
Cash |
|
¥ |
269,111,420 |
|
¥ |
121,848,777 |
|
¥ |
17,162,041 |
Restricted cash |
|
|
730,060 |
|
|
3,904 |
|
|
550 |
Cash and restricted cash, end of year |
|
¥ |
269,841,480 |
|
¥ |
121,852,681 |
|
$ |
17,162,591 |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities |
|
|
|
|
|
|
|
|
|
Right-of-use assets obtained in exchange for operating lease obligations |
|
¥ |
— |
|
¥ |
298,783 |
|
$ |
41,204 |
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement |
|
¥ |
43,881 |
|
¥ |
— |
|
$ |
— |
Inventories transferred to and used as fixed assets |
|
¥ |
(65,456) |
|
¥ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements |
View original content:https://www.prnewswire.com/news-releases/recon-technology-ltd-reports-financial-results-for-the-first-six-months-of-fiscal-year-2024-302185599.html
SOURCE