INSPUR DIGI ENT (00596) surged over 5% again, rising 4.57% to HK$10.98 as of press time, with turnover reaching HK$42.88 million.

On the news front, INSPUR DIGI ENT previously released its interim results showing revenue of RMB 4.343 billion, up 4.9% year-on-year, and profit attributable to owners of RMB 183 million, surging 73.3% year-on-year. The significant profit increase during the reporting period was mainly attributable to the cloud services business turning from loss to profit, and the management software business segment's operating profit growing 6.22% compared to the same period last year.

First Shanghai issued a research report stating that INSPUR DIGI ENT's cloud services business showed remarkable growth momentum in the first half, achieving revenue of RMB 1.27 billion, up 30% year-on-year. The proportion of cloud business in total operating revenue has increased for four consecutive years, breaking through 50% for the first time in the interim period to reach 52%, with growth rates consistently maintaining above 30%. Looking ahead to the next 3-5 years, this business is expected to maintain growth momentum of over 20%.

Combined with the company's natural advantages from its state-owned background, the profit release potential of cloud services driven by domestic IT application innovation, and the expected valuation uplift from potential inclusion in Stock Connect, the firm assigned a target price of HK$14.8 with a "Buy" rating.