BOE Varitronix Limited (BOE Varitronix) has entered into a three-year Framework Tenancy Agreement with controlling shareholder BOE Technology Group Co., Ltd. (BOE), securing access to BOE-owned premises from 1 May 2026 to 30 April 2029.

Under the agreement, BOE will lease various production and office properties to BOE Varitronix and its subsidiaries on market-referenced terms. Aggregate annual caps are set at HK$19.00 million for 1 May–31 Dec 2026, HK$15.50 million for FY2027, HK$16.00 million for FY2028 and HK$5.50 million for 1 Jan–30 Apr 2029, giving a total cap of HK$56.00 million across the term.

Pricing will reference prevailing market rents and property management fees for comparable locations. If direct comparables are unavailable, valuations will be benchmarked against similar-grade premises in the same district or by independent appraisal.

The transaction is classified as a continuing connected transaction under Chapter 14A of the Hong Kong Listing Rules because BOE (through wholly owned subsidiary BOE Technology (HK) Limited) holds about 53.02% of BOE Varitronix’s issued share capital. The percentage ratios fall below the thresholds requiring a circular or independent shareholders’ approval; however, reporting, announcement and annual review obligations apply.

Management cites the deal as part of an “asset-light” strategy that leverages BOE’s geographically diverse property portfolio, enabling timely access to high-quality space while avoiding significant upfront capital expenditures. Freed-up resources are expected to be redirected to R&D, capacity expansion and other core operations.

To safeguard minority interests, BOE Varitronix has implemented multilayered controls: market benchmarking of at least three rental quotes where available, monthly compliance checks by senior management, semi-annual internal audit reviews, ongoing monitoring of utilisation against annual caps by the finance department, and annual verification by external auditors and independent non-executive directors.

Four directors who hold A-shares in BOE abstained from the board vote approving the agreement. All other directors, including independent non-executive board members, consider the terms fair, reasonable and in the interests of shareholders as a whole.