The breathtaking Yarlung Tsangpo Grand Canyon zone in Tibet saw a record 5.5 million tourists troop in last year.

Not surprisingly, in its terse statement to the Shanghai Stock Exchange, the Tibet Tourism Co declared profits for 2009, a neat comeback from the heavy losses it suffered a year earlier. As for Tibet Tianlu, a road builder in this autonomous region, its 2009 net gains are slated to jump a whopping 850 per cent year on year.

When China's desolate fringes yield profits, can its economic heartland be far behind? It's the season of earnings again and profits of companies listed in mainland China's two markets Shanghai and Shenzhen are zigzagging up, as are those listed as ‘H' shares in Hong Kong.

From power giants, railways, ports, airlines, telecom, retail, right down to Chinese traditional medicine companies, it was a graph of strong fundamentals.

Heavy industry and machinery makers were the biggest beneficiaries of the government's four trillion yuan (Dh585.84 billion) stimulus package. Infrastructure construction projects, which absorbed 80 per cent of the stimulus money, in combination with the property sector, helped spur demand for construction machinery.

Profit expectations

Listed companies that filed pre-disclosures in their annual reports expect profit growth above 60 per cent. LiuGong Machinery, China's leading manufacturer of crane and construction equipment, wrote out a 137 per cent jump in annual net profits last year.

According to estimates, industrial output soared to a new high of 10 trillion yuan last year, making retail, electronics and telecom the other big success stories. A recent study by Nielsen and the National Bureau of Statistics reveal that consumer confidence index, or CCI, reached a record high over the past 30 months, with a sustained upward trend.

Shining bright

This was reflected in a healthy fourth quarter for consumer electronics companies. China Electronics and TPV Technology, the world's biggest contract manufacturer of computer monitors had a booming season.

ZET Corporation, China's largest telecom equipment producer by market value, said its profit is estimated to surge up to 56 per cent in 2009 benefited by large-scale construction of 3G networks.

Power was shining bright too. Huaneng Power International and Datang International Power Generation, China's largest electricity producers estimated profits to double for last year on lower coal cost and higher tariff.

China's power demand is expected to grow by 8 per cent this year.

Despite the crisis in the airline industry, Hainan Airlines, is also looking at profits. Chinese airlines and tour companies see a busy year ahead with 70 million visitors expected for the six-month long Shanghai World Expo in May this year.

Those who lost out were in the metal sector. China Minmetals Development Co, the nation's leading non-ferrous metal producer, suffered a profit slump by at least 50 per cent due to dampened commodity prices. Bengang Steel Plates Co, China's leading steel plates producer, forecast its net profits in 2009 would stand a loss of 900 per cent to 950 per cent from the previous year.

Bourse players, however, had more to cheer about. China's A-share stock market, which deals only in yuan shares, became the world's second-largest by market value after the US last year.

A study by the China Center for Market Value Management, showed that as of the end of 2009, the value of the China's A-share market rose 100.88 per cent year-on-year to $3.57 trillion (Dh13.10 trillion), overtaking Japan's $3.53 trillion.

The US remained as the world's largest equities market, which was worth $15.08 trillion.

Taking a dip

So why did the Shanghai Composite dip below the psychological 3,000 mark last week, despite a positive fourth quarter? As it turned out, indexes tracking Chinese shares in Hong Kong and Shanghai turned out to be the worst performers in Asia this year.

The reasons lie in tighter monetary policies followed by Beijing. Interest rates are slated to rise to cool down the overheated economy. Regulators have begun restricting new loans after unprecedented credit growth in 2009. As analysts point out, investors are always looking for excuses to take profits, especially after last year's bull run.

The writer is a freelance journalist.