Recon Technology (RCON) Announces FGS' Cooperation Agreement with Henan CNPC and Alipay

April 8, 2021 8:37 AM EDT
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Recon Technology, Ltd (NASDAQ: RCON), ("Recon" or the "Company"), today announced the Company's 51%-owned subsidiary, Future Gas Station (Beijing) Technology, Ltd. ("FGS"), has entered into a cooperation agreement (the "Agreement") with Henan sales branch of PetroChina Co. Ltd. ("Henan CNPC") and Alipay (Hangzhou) Information Technology Co., Ltd ("Alipay") to develop a mini program named "Hao Ke Le Jia" on Alipay's mobile application and to provide operation and maintenance services for the related joint membership program. This is the second time that FGS and Alipay cooperate since they began to provide similar service to Zhejiang sales branch of PetroChina Co. Ltd. ("Zhejiang CNPC") in October 2020.

According to the Agreement, Henan CNPC and Alipay will use their own resources and brands to jointly create a car owner membership program in Henan province which will be promoted through "Hao Ke Le Jia" mini program. FGS is obligated to provide related services including developing, operating and maintaining the mini program. The car owners who purchase or receive the membership through the mini grogram will be able to enjoy monthly refuel discounts, coupons for non-oil products sold at gas stations, and various membership benefits provided by Alipay, as well as convenient fueling service provided by Henan CNPC.

As of December 31, 2019, the number of gas stations owned by Henan CNPC has exceeded 800, the number of motor vehicles registered in Henan province has exceeded 23 million and the number of drivers registered in Henan province has exceeded 20 million.

Management Commentary

Mr. Yang Song, founder and CEO of FGS, said, "We are pleased to continue to work together with Alipay by providing membership operation services to Henan CNPC. We have already started similar cooperation with Alipay and Zhejiang CNPC and achieved positive operational results."

"The joint membership program provided by Alipay and PetroChina will enable car owners to enjoy continuous and stable discounted refuel service and comprehensive benefits package. In return, we expect this program will help CNPC maintain customers and increase the customers' transaction frequency."

Mr. Song continued, "FGS has been committed to providing digital operation solutions to China's gas station operators, improve the throughput rate during peak periods, enhance marketing efficiency and reduce marketing costs. Its solutions also provide an affordable and convenient refueling experience for vehicle owners. We are glad to extend our services to Henan province in partnership with Alipay. We plan to promote this model in other provinces in China."

Mr. Shenping Yin, founder and CEO of Recon, said, "We have witnessed many milestones achieved by FGS and the effective solutions provided by FGS' team. Since December 2017 when we started to invest in FGS, it has served more than 5.35 million car owners, with a cumulative refueling value of more than RMB4.63 billion in Zhejiang province. With the market expansion, we believe FGS will bring to the Company more benefits and potentials."

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