HK Stock Market Move | Inspur Digital Entertainment (00596) rose by more than 5% again. The cloud service business achieved a turnaround from loss to profit in the first half of the year, with the proportion of cloud business revenue continuing to increase.

INSPUR DIGI ENT (00596) rose more than 5%, up 4.57% as of press time, closing at 10.98 Hong Kong dollars with a trading volume of 42.8845 million Hong Kong dollars. In terms of news, INSPUR DIGI ENT previously released its mid-year performance, with revenue of 4.343 billion Chinese yuan, a year-on-year increase of 4.9%; the company's attributable profits amounted to 183 million Chinese yuan, a year-on-year increase of 73.3%. The profit for the reporting period has significantly increased, mainly due to the turnaround of the cloud service business from loss to profit; the operating profit of the management software business segment increased by 6.22% from the same period last year. FIRST SHANGHAI released a research report stating that INSPUR DIGI ENT's cloud service business showed significant growth momentum in the first half of the year, achieving revenue of 1.27 billion Chinese yuan, a year-on-year increase of 30%. The proportion of cloud business in the operating revenue has been increasing continuously for the past 4 years, exceeding 50% for the first time in the first half of this year, reaching 52%, with a consistent growth rate of over 30%. Looking ahead to the next 3-5 years, the business is expected to maintain a growth trend of over 20%. Taking into account the natural advantage of the company's state-owned background, the profit potential of the cloud service driven by domestic innovation, and the expected valuation increase from the inclusion in the Hong Kong Stock Connect, a target price of 14.8 Hong Kong dollars is given with a "buy" rating.