BOE VARITRONIX (00710) declined more than 5% during afternoon trading, falling 5.21% to HK$6.55 with trading volume reaching HK$112 million as of press time.

On the news front, Hang Seng Indexes Company announced its regular semi-annual index review results after market close on August 22, with all changes taking effect from September 8. BOE VARITRONIX was removed from the Hang Seng Composite Index as part of these adjustments.

Additionally, BOE VARITRONIX released its interim results, reporting revenue of HK$6.671 billion for the first half, representing an increase of approximately 8% year-on-year. Profit attributable to shareholders reached approximately HK$180 million, up about 5% compared to the same period last year.

Citi issued a research report stating that BOE VARITRONIX's profit margins were weak in the first half, primarily due to investments in system business. The bank noted that while BOE VARITRONIX's business is gradually recovering, progress remains very slow. Management also expects continued destocking pressure in the domestic market during the second half, with net profit margins likely to remain flat compared to the first half. Consequently, Citi does not anticipate significant improvement in operating profit margins over the next two years, leading to a dramatic downgrade of the investment rating from "Buy" to "Sell" and a reduction in the target price from HK$7.4 to HK$5.5.