XD (HKG:2400) said its wholly owned subsidiary agreed to acquire a 5.3% stake in MiAO (Cayman) Limited for $14 million, according to a Monday filing with the Hong Kong stock exchange.

Shares of XD surged nearly 23% in Tuesday's afternoon trade.

The investment involves subscribing to about 7.09 million Series B1 preferred shares in the game developer.

Shares are priced at $1.98 each, based on an independent valuation referencing peers.

XD will fund the purchase through internal resources, and the deal will not result in MiAO becoming a subsidiary.