Sino-Forest Releases Independent 2008 Forest Asset Valuation Report

    TORONTO, April 2 /CNW/ - Sino-Forest Corporation ("Sino-Forest")
(TSX:TRE), a leading commercial forest plantation operator in China, released
today its yearly forest valuation report conducted by Poyry Forest Industry
Consulting Ltd ("Poyry"), an international forestry consulting firm. Poyry has
estimated the valuation of 335,000 hectares ("ha") of Sino-Forest's forest
assets, based on a single rotation(1) using a pre-tax discount rate of 11.5%,
to be US$1.64 billion as at December 31, 2008.
    Sino-Forest had approximately 347,000 ha of trees under management at the
end of 2008. However, Poyry excluded 12,000 ha in its valuation as some areas
were allocated for bio-fuel, carbon credit development and other purposes.

    The 32% increase in appraisal value from US$1.24 billion in 2007 to
US$1.64 billion in 2008 was attributable to the following factors:

    -   an increase in the forest area and tree maturity, resulting from 2008
        tree acquisitions;
    -   an increase in biological growth within plantations under management
        - in certain of our planted eucalypt plantations, Poyry recorded a
        standing volume of almost 150 cubic metres ("m3") per ha aged only
        three and half years. Poyry estimated an average standing timber
        volume of 160 m3 per ha in eucalypts at age six can be obtained;
    -   revision of log prices, and management and production cost estimates;
    -   the change in the USD/RMB exchange rate from 7.3046 to 6.8542 as at
        December 31, 2007 and December 31, 2008, respectively.

    Assuming perpetual rotation(2) with continuous replanting of plantation
trees after harvesting, Poyry's estimate of the prospective valuation of
Sino-Forest's forest assets, based on year-end hectares under management,
using the pre-tax discount rate of 11.5%, was estimated to be US$1.69 billion.
This 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 applied to pre-tax cash flows.

                                Discount Rate Applied to Pre-tax Cash Flows
    Forest Component                10.5%           11.5%           12.5%
                               Valuation in USD billions as at Dec. 31, 2008
    Single rotation:
     based on plantation
     area under management
     of 335,087 ha. Poyry's         $1.70           $1.64           $1.59
     estimate of the market
     value of Sino-Forests
     tree crop assets.
    Perpetual rotation:
     Poyry's estimate of
     the prospective value
     is based on continuous
     leasing and replanting
     of harvested land, ex-         $1.79           $1.69           $1.61
     cluding trees yet to be
     acquired under Sino-
     Forest's four long-term
     master agreements

    Poyry reported that Sino-Forest's total merchantable standing timber
volume as at year end 2008 was 37.6 million m3, compared to 32.2 million m3 in
2007, representing a 17% increase in wood fibre. The volume increase was
attributable primarily to higher yields obtained from trees acquired and to
the biological growth of trees under management. Overall, the average yield of
trees improved 9% from 103 m3 per ha in 2007 to 112 m3 per ha in 2008.
    Sino-Forest Chairman & CEO Allen Chan said, "We are pleased to see that
our long-term acquisition agreements are substantially increasing our total
merchantable volume of fibre, estimated market value and our average yield per
hectare. As we continue to acquire trees with higher-yields, we are confident
that our total merchantable volume of fibre will continue to increase and
generate attractive margins."
    "We are also very encouraged by Poyry's endorsement of our R&D and
silviculture efforts which recorded that the growing yield at our eucalypt
plantations in a certain region can reach 160 m3 per ha by age 6, as compared
to the Chinese fir trees that we purchased which have a yield of 120 m3 per ha
after a 12-year growing cycle. This shows our re-planting growth progressing
over the years," added Mr. Chan.
    The full valuation report is available on Sino-Forest website under
"Investor Relations", "Filings" (, and
will also be filed on SEDAR at


    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.

    Notice of Conference Call

    Sino-Forest will host a conference call with consultants from Poyry
Forest Industry on Wednesday April 8, 2009 at 8:30 am EST or 8:30 pm HKT to
discuss modelling and valuation in its forest asset valuation report.
Sino-Forest stakeholders are invited to dial in, however, we will take
questions only from investment research analysts.
    To participate, please dial +(1) 416-644-3415 for local and international
callers or 800-731-6941 for North America toll-free access. Alternatively, you
may onto click to the link below for webcast (listen only mode) and replay,
please click
    A replay will be available for 15 days and there will be no
post-conference call transcript.

    About Poyry Forest Industry Consulting Ltd

    Poyry Forest Industry Consulting Ltd 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 forest plantation
operator in China. Its principal businesses include the ownership and
management of forest plantation trees, the sale of standing timber and wood
logs and the complementary manufacturing of downstream engineered-wood
products. The company'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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