Hail the returning hero. Liu Chuanzhi, the founder of Lenovo who reassumed the chairmanship in February, has so far talked a good turnround. On Thursday came the first evidence: a return to profit from June to September, after three quarters of losses.

What got the world's fourth largest PC maker into trouble was its binary structure: an excellent greater China business, with industry-leading market share and operating margins, and a ho-hum international one, vulnerable to last year's collapse in corporate demand. Thanks to vigorous cost-cutting in the US and Europe, the picture is now more nuanced. China – where the market is growing at about 16 per cent a year – remains dominant, accounting for 49 per cent of total revenues, up from 44 six months ago. Developed markets are still iffy, with a year-on-year increase of just 0.4 per cent in total PC sales. But Lenovo's range of entry-level machines is galvanising the new emerging markets division, where shipments were up a tenth.

Plenty of challenges await. Taiwan's Acer tapped strong back-to-school demand with its Mini Notebooks in the third quarter to supplant Dell as the world's number two by sales, behind Hewlett-Packard. According to data tracker IDC, Acer beat the market in almost every region, with worldwide shipments up 26 per cent to Lenovo's 18. And some perspective is needed: the market's consensus forecast of $254m in net income for the year ending March 2011 is about half of what the group achieved in the year to March 2008. Lenovo's enduring valuation premium to HP and Dell – on an average 13 times forward earnings to Lenovo's 31 – seems based almost entirely on its brand and distribution power in China, set to topple the US as the world's largest PC market within five years. If Mr Liu has settled for managing decline in the west, so have investors.