NEW YORK (TheStreet) -- Shares of Recon Technology (RCON) were gaining 22.3% to $2.02 on heavy trading volume after the oil services company announced it received contract (subcontractor) qualification from Jianghan Oilfield Construction Engineering Company (JOCEC), a subsidiary of China Petroleum & Chemical (SNP).
The qualification is valid for one year starting June 4, 2015, and is extendable on a yearly basis. Recon is now qualified as a general contractor (subcontractor) to "participate in certain construction and engineering projects at JOCEC ranging from the expansion and renovation of existing facilities to the construction of new facilities," according to the company.
The company also announced that it secured a contract with JOCEC worth about RMB 550,000.
"The Qualification, combined with the entry permit awarded by JOCEC earlier this year, clears the path for our increasing presence at JOCEC and sets the stage for a broader and deeper relationship with Sinopec's subsidiaries, that collectively have contributed 19.6% of our total revenues in fiscal year 2014,"Chairman and CEO Shenping Yin said.
About 2.1 million shares of Recon technology were traded by 12:09 p.m. Wednesday, above the company's average trading volume of about 33,000 shares a day.
TheStreet Ratings team rates RECON TECHNOLOGY LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate RECON TECHNOLOGY LTD (RCON) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."