China Wacan (HKG:1920) has agreed to issue 112.3 million new shares at HK$0.3965 each to its controlling shareholder, China Alliance Venture Technology, raising estimated net proceeds of about HK$43.9 million, according to a Monday Hong Kong bourse filing.

Shares of the firm were up 13% in Tuesday morning trade.

The subscription price represents a 4.3% premium to the stock's last closing price on the date of the agreement. The new shares will represent about 23.1% of the company's enlarged share capital after completion.

China Alliance Venture, wholly owned by Chairman Zhou Zhenlin, will see its stake rise to about 64% from 53.2% following the issue.

The company said the proceeds will be used for working capital and to support the expansion of its beauty and healthcare business.