Sino-Forest Corporation Releases 2007 Independent Forest Asset Valuation Report

    TORONTO, March 31 /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 estimated the valuation of Sino-Forest's 312,000 hectares (ha) of
forest assets, based on a single rotation(1) using a pre-tax discount rate of
11.5% to be US$1.2 billion as at December 31, 2007.
    The 35% increase in appraisal value from US$0.9 billion in 2006 to US$1.2
billion in 2007 was attributable to the following factors:

    -   An increase in average tree maturity resulting from 2007 tree
        acquisitions, from biological growth within plantations under
        management and from a different mix of species, despite an 11%
        decline in Sino-Forest's total forest asset area;
    -   Revision of current and future log price estimates;
    -   Revision of management and production cost estimates;
    -   A change to the USD/RMB exchange rate.

    Assuming perpetual rotation(2), i.e. re-planting of plantation trees
after harvesting, Poyry's valuation of Sino-Forest's forest assets, including
the planned expansion of operations in Hunan, Yunnan and Guangxi Provinces and
using a pre-tax discount rate of 11.5%, was estimated to be US$3.2 billion.
The valuation takes into account revenues and costs of re-establishing and
maintaining the forest plantations for a 60-year period.
    The following table presents estimated valuations depending on 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 billions as at Dec. 31, 2007
    Existing forest estate
     of 311,616 ha based on
     current rotation only               $1.29          $1.24          $1.20
    Existing forest estate,
     plus prospective
     acquisitions of trees
     on 750,000 ha in Hunan,
     Yunnan and Guangxi
     Provinces                           $3.49          $3.20          $2.96

    Based on the valuation report, the total merchantable standing volume as
at year end 2007, excluding 45,000 hectares of trees less than 4 years, was
31.3 million cubic metre (m(3)), compared to 27.4 million m(3) in 2006,
representing a 14% increase in wood fibre. The volume increase is attributable
primarily to higher yield obtained from trees acquired and biological growth
of trees under management. Overall the average yield improved 15% from 86.7
m(3) per ha in 2006 to 100.5 m(3) per ha in 2007.
    Sino-Forest Chairman & CEO Allen Chan said, "This independent valuation
confirms that our strategic plantations acquisition plan substantially
increased our average yield per hectare, total merchantable volume of fibre
and its estimated market value within our plantation area under management
over the past year. We look forward to further building our inventory of fibre
this year with the expansion of our operations in Hunan, Yunnan and Guangxi
    The full valuation report is available on Sino-Forest website under
"Filings" (, and will also be filed on

    Notice of Conference Call

    Sino-Forest will host a conference call with consultants from Poyry
Forest Industry on April 2, 2008 at 8:30 am EST or 8:30 pm HKT to discuss
modelling and valuation of the forest asset valuation report. All Sino-Forest
stakeholders are invited to dial-in, however, we will only take questions from
current investment research analysts covering Sino-Forest.
    To participate, please dial +(1) 416-695-9761 for local and international
callers or 877-461-2816 for North America toll-free access. Alternatively, to
join the live webcast and replay in a listen-only mode, please click here Replay will
be available for 30 days only and there will be no post conference call


    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 60-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 2,100 employees covers 17 countries in all
major forest products regions in the world.

    About Sino-Forest Corporation

    Sino-Forest Corporation is a leading commercial forestry plantation
operator in China. The Canadian company started its operations in 1994 and was
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 logs, and
complementary manufacturing of downstream engineered-wood products. The
Corporation's common shares have traded 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.

For further information:

For further information: SINO-FOREST CORPORATION, Toronto, Dave Horsley
- Senior Vice President & Chief Financial Officer, Tel: (905) 281-8889, Email:; Hong Kong, Louisa Wong - Senior Manager, Investor
Communications & Relations, Tel: +852 2514-2109, Email:

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