High Tech Computer Corp (HTC,
HTC would seek other funding approaches to finance future expansion, the company said in a press release.
HTC had planned to use the proceeds to purchase raw materials.
"Considering global financial instability, the board of directors of HTC has approved the cancelation of a project to issue new common shares in an overseas depositary receipts offering," HTC said in the statement.
HTC received the go-ahead for the overseas share sale in late May this year from the nation's securities market watchdog the Financial Supervisory Commission.
The stock price of HTC jumped 2.39 percent to NT$815 (US$24.86) on the Taiwan Stock Exchange yesterday, outperforming against the overall market's loss of 0.51 percent.
"The decision to drop the share offering will have a positive impact, as the company's profits will not be diluted by the additional shares," said Lu Chia-lin (呂家霖), who tracks the handset industry for Yuanta Core Pacific Securities (元大京華證券).
"HTC has sufficient cash in hand and strong profitability. I don't see the need for the company to raise funds by selling new shares," Lu said.
Lu raised his earnings forecast for HTC for this year by 13 percent to NT$26.16 billion, or NT$60.6 per share, compared with NT$24.26 billion projected earlier, on the back of strong demand for the company's new handsets. HTC made NT$11.78 billion, or NT$28.3 a share, in net profits last year.
HTC sells Microsoft-based mobile phones to many of the world's major telecom operators, including Japan's biggest mobile service provider NTT DoCoMo Inc and Vodafone in Europe.
Lu reiterated his "buy" rating on the stock, and raised his six-month target price to NT$1,230, implying more than 50 percent upside from HTC's closing price yesterday.
Separately, HTC yesterday said it had hired Cheng Hui-ming (鄭慧明) as the company's new chief financial official and spokesman.
"We are delighted to have Mr Cheng join HTC. He has strong financial and industry experience which is exactly what we need in this critical high-growth phase for HTC," the company said.