AuMake, an Australian retailer that sells local goods aimed at the Chinese, has cancelled its capital raising, sending its share price down more than seven per cent to 49 cents at one point in early trade.

The company, which sells baby formula, dairy products and cosmetics, says its underwriter has terminated its agreement, a move AuMake says is “reasonable given recent share price volatility”.

As a result, AuMake will refund all application monies received, withdraw its entitlement offer and its shortfall offer, and will instead raise $14 million through selling its securities to investors at 45 cents a share.

“The board and management of AuMake are highly encouraged by the company’s current performance across all financial and operational metrics since its ASX listing,” the company stated.

“AuMake looks forward to carrying this momentum forward into its next exciting growth phase.”

In a trading update, AuMake said it will expand its retail network to nine stores, with new locations set to launch in 2018 at Market City Chinatown, Auburn and Burwood in Sydney.

The retailer also reported 44 per cent growth in WeChat members, adding another 4000 since October last year to take the total to 13,000.

AuMake also announced the launch of its “Daigou Hub” concept, brought about by “extensive consultation” with its customers and Chinese tour guides. The concept is reflected in the store design of current and future stores.

“Daigou Hubs will for the first time allow Australian suppliers to directly engage with daigou on a mass scale,” the company said.

“Australian suppliers, in conjunction with AuMake, will receive direct feedback from daigou in relation to important factors such as branding, quality and packaging for the Chinese market.

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