With a steady sales rebound in its core mainland market and fresh demand for new personal computers with Windows 7 software, Lenovo Group could pull off a return to profitability in its current fiscal year, analysts said. 'The momentum for the mainland personal computer market is very strong, and the rest of Asia is also at a pretty high level,' said analyst Charles Guo at JP Morgan Securities. 'We still expect Lenovo to record a loss in its first fiscal quarter but be very close to break-even. It should enter positive territory in the next six months, if that momentum continues, and likely stay positive for its full fiscal year to March.' The results for the first quarter to June are due out on August 6. Lenovo, the world's fourth-largest supplier of personal computers, posted a net loss of US$226 million in its last fiscal year, against a US$484 million profit a year earlier. Sales dropped to US$14.9 billion from US$16.35 billion as the economic slowdown unfolded. Research firms Gartner and International Data Corp (IDC), however, reported last week that Lenovo's personal computer shipments picked up in the quarter to June owing to improved demand on the mainland and across the Asia-Pacific, following six months of decline. Initial estimates by IDC showed Lenovo shipped 5.76 million units, up 2.9 per cent from 5.6 million units a year earlier, to boost its global market share slightly to 8.7 per cent. 'A picture of stabilisation is emerging,' said Macquarie Research analyst Patrick Yau in a report. 'This momentum, if sustained, would lead to an upward revision of our negative 4 per cent year-on-year shipment contraction for Lenovo in its current fiscal year.' Mr Guo said turnover, especially from consumers, in Lenovo's core mainland market would also be helped by the launch in the fourth quarter buying season of new personal computers based on Microsoft Corp's Windows 7 operating system. The general worldwide release of Windows 7 is due on October 22. Adam Anger, the head of Microsoft's Windows business group in Greater China, said: 'All the major computer vendors in the mainland, including Lenovo, will help us roll out Windows 7 pre-installed in their machines, including netbooks.' Lenovo has targeted total shipments of one million netbooks - basic, low-cost mini-notebooks designed for internet access - roughly half of which this year may be sold through nationwide 3G mobile network operator China Mobile. Although personal computer sales may be recovering, the upswing for Lenovo has been mainly driven by demand for low-cost models in the consumer market, thanks to government-led economic stimulus efforts. A report by Deutsche Bank said Lenovo would remain 'affected by weak enterprise demand in the coming quarters'. It expected Lenovo to return to profit in the December quarter because of robust sales on the mainland as well as its restructuring efforts. Hurt by the global economic downturn, Lenovo's share price sank to a low of HK$1.35 on January 23 this year from a high of HK$7.08 on January 2 last year. Its shares closed at HK$3.55 on Friday.