Sino-Forest Corporation Releases 2006 Independent Forestry Valuation Report



    TORONTO, March 28 /CNW/ - Sino-Forest Corporation ("Sino-Forest")
(TSX:TRE and TRE.S), a leading commercial forestry plantation operator in
China, released today its yearly forestry valuation report conducted by Poyry
Forest Industry Ltd ("Poyry"), a reputable international consulting firm.
Poyry has determined that the valuation of Sino-Forest's 352,000 hectares (ha)
of forest assets, based on a single rotation(1) using a pre-tax discount rate
of 11.5% to be US$919 million as at December 31, 2006.
    The 26% increase in appraisal value from US$728.5 million in 2005 to
US$919.0 million in 2006 was attributable to the following factors:

    
    -   A net increase in year-end forest plantation area under management of
        approximately 9%;
    -   Revision of yields associated with Hunan Chinese fir plantations;
    -   Revision of current and future logs price estimates;
    -   Increase in tree maturity within the estate from biological growth.
    

    In addition, Poyry prepared a forest asset valuation that includes
revenues and costs of re-establishing and maintaining the plantation forests
for a 50-year period (perpetual rotation(2)). The perpetual rotation valuation
of Sino-Forest's forest assets, including the planned expansion in Hunan
Province, as at year end 2006, using a pre-tax discount rate of 11.5% was
estimated to be US$1,427.6 million. The following table presents the results
of the valuation applying various discount rates to pre-tax cash flows.

    
    -------------------------------------------------------------------------
                                             Discount Rate Applied to Real
                                                   Pre-tax Cash Flows
                                           ----------------------------------
         Forest Component                    10.5%        11.5%        12.5%
                                           ----------------------------------
                                            Valuation in USD millions as at
                                                     Dec. 31, 2006
    -------------------------------------------------------------------------
    Existing forest estate of 352,010 ha
     based on current rotation only          951.2        919.0        888.7
    -------------------------------------------------------------------------
    Existing forest, and all future
     rotations including the 400,000 ha
     expansion in Hunan Province  1,550.3               1,427.6      1,323.8
    -------------------------------------------------------------------------
    

    Based on the valuation report, the total volume of standing timber as at
year end 2006, excluding trees less than 4 years, was 27.4 million cubic metre
(m(3)), compared to 23.8 million m(3) in 2005, representing a 15% increase in
wood fibre. The primary reasons for the volume increase were the addition of
plantation trees under management and an improvement of average yield from
77.7 per ha per m(3) in 2005 to 86.7 per ha per m(3) in 2006.
    In terms of long-term wood log access in Inner Mongolia, Poyry projected
pre-tax cash flows generated from the trading business will generate net
earnings of US$12.9 million per annum, for the next 12 years. Based on a
discount rate of 10%, the Inner Mongolia project has an estimated net present
value of US$88 million as at December 31, 2006.
    The full valuation report is available on Sino-Forest's website at
www.sinoforest.com under "Filings" (http://www.sinoforest.com/filings.asp),
and will also be filed and accessible on SEDAR at www.sedar.com.

    
    Notes:

    1.  Single rotation, also called "current rotation analysis", is based on
        one-off harvesting of standing timber and includes only the revenue
        and costs associated with the existing tree inventory.

    2.  Perpetual rotation, also called "perpetual cash flows", refers to
        perpetual re-establishment and maintenance of plantation land after
        harvesting through many rotations over a 50-year period, including
        all revenue and costs associated with sustainable forestry modelled
        in perpetuity.
    

    About Poyry Forest Industry Ltd
    Poyry is an independent management consulting company within the Poyry
Group and is recognised as one of the world's leading advisors to the global
forestry industry cluster. The cornerstones of its operations are its strong
business understanding and industry expertise. The Forest Industry business
group's global network of around 2100 employees covers 17 countries in all
major forest products regions in the world.

    About Sino-Forest Corporation
    Sino-Forest Corporation, a Canadian company, is a leading commercial
forestry plantations operator in China. The company started its operations in
1994 and is the first foreign and privately managed operator involved in
forest products in China. Its principal businesses include the ownership and
management of forestry plantation trees and sales of standing timber, wood
chips and logs, and complementary manufacturing of downstream engineered-wood
products. The Corporation's common shares trade on the Toronto Stock Exchange
under the symbol TRE since 1995.

    Please note: This press release contains projections and forward-looking
statements regarding future events. Such forward-looking statements are not
guarantees of future performance of the Company and are subject to risks and
uncertainties that could cause actual results and company plans and objectives
to differ materially from those expressed in the forward-looking statements.
Such risks and uncertainties include, but not limited to, changes in China and
international economies; changes in currency exchange rates; changes in
worldwide demand for the Company's products; changes in worldwide production
and production capacity in the forest products industry; competitive pricing
pressures for the Company's products and changes in wood and timber costs.
    %SEDAR: 00001894E




For further information:

For further information: Toronto, Dave Horsley, Senior Vice President &
Chief Financial Officer, Tel: 905 281-8889, Email: davehorsley@sinoforest.com;
Hong Kong, Louisa Wong, Manager, Investor Communications & Relations, Tel:
+852 2514-2109, Email: louisa-wong@sinoforest.com

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