Shares of Montage Technology have climbed more than 7% following news of a capital injection into a key subsidiary.

The stock rose 7.15% to HK$40.74, with a trading turnover of HK$613 million.

Montage Technology (ASX: 06809)

The company announced that its majority-owned subsidiary, Hengqin Company, plans to increase its capital and introduce new investors to support its operational development.

Hengqin Company's registered capital is set to increase from RMB 143.5 million to RMB 165.7 million, with a new capital injection totaling RMB 499.5 million.

The subsidiary focuses on the research, development, and commercialization of new products such as CXL MXC and PCIe Switch chips. It is currently in the R&D investment phase and requires funding support.

Under the plan, new investor Hainan Yunfeng Fund Center will contribute RMB 51.75 million to subscribe for RMB 2.3 million of the new registered capital.

Another new investor, YF Hestia II Limited, will invest the dollar equivalent of RMB 198 million to subscribe for RMB 8.8 million of the new capital.

Montage Technology itself will invest approximately RMB 250 million to subscribe for RMB 11.1 million of the new registered capital in Hengqin Company.