After nine months on AIM, shares in Asian online advertising play Pixel are back to square one, even though the company is cash rich and growing fast.

Market forecaster Zenith Optimedia projects global internet advertising spend will grow by 28.2% in 2007, over seven times faster than other media, and even faster in the Asia Pacific region. Fresh full year figures to December demonstrated Pixel is indeed making hay in this balmy climate: sales swelled 32% to $7.7m (£3.9m) in 2006, driving pre-tax profits up 31% to US$1.1m (£559,000) and earnings by 17.4% to 2.55¢ (1.3p).

Last year Pixel grew its network of publishers by 69% to 27 websites, adding an exclusive deal with Bloomberg.com and one with China’s leading instant messaging provider, as well as renewing existing contracts with customers such as MSN. The number of advertisers touting their wares via Pixel on these sites in turn increased by 29% and average revenue per advertiser by 8%.

Hong Kong operations grew at 30% and Malaysia 89%, while the new Singapore office is already completing deals. Significantly, Pixel will this year be able to advertise with domestic Chinese advertisers, as it won a 30-year license in late December and has begun recruiting.

Cash-generative, the group has £2.5m in the bank, of which it will spend just under £1m on the acquisition of Chinese affiliate advertising firm Easy Growth. ‘This expands us geographically and adds expertise in a new product, which we plan to spread to other markets,’ says chief executive Kevin Huang.

Huang has invested heavily in staff to prepare Pixel for ‘aggressive growth’ and recent profit-taking has affected the shares. But earnings are forecast to speed to 1.55p (from 1.3p) this year and 4.45p next. Add.