“Ovannis Capital”: Sino-Forest Corp signs it’s sixth long term deal acquiring pine trees in Guizhou Provence.
Analysts with Ovannis Capital said the deal between Sino-Forest Corp and Guizhou Sen Li Industry Co. will result in Sino-Forest Corp gaining access to around 16.5 million cubic meters of plantation wood fibre. Over 150,000 hectares of forest with an average yield of 100 cubic meters per hectare.
Ovannis Capital analysts report that Canadian Sino-Forest Corp (TRE.TO) who own and manage plantation forests in China have recently raised C$815 million through equity offerings. Sino Forest has also completed the acquisition of two plantations. One of these acquisitions is Mandra Forestry which have plantations in Anhui province.
“They already have decent size presence in Guangxi, which is south of Guizhou. They have same sort of forestry team there, so you don’t need to double up management costs on Guizhou,” Ovannis Capital Capital Markets analyst reported.
The Ovannis Capital analyst said Sino-Forest has been seizing the opportunity in China’s policy to allow commercial management of it’s vast state owned tree farm resources. Sino-Forest says that it has new agreements with Chinese authorities to expand it’s base of wood fibre and plantation operations in and around Southern China, especially in Guizhou Province and the adjacent province of Sichuan and the Chongqing municipality.
A “Spokesman for Sino-Forest Corp. told Ovannis Capital “Chongqing is a vibrant and economically developing area, and infrastructure in Sichuan is under redevelopment after a massive earthquake.” The company said “accordingly, we believe that wood fiber will be a commodity in great demand in these provinces.”
Sino-Forest shares, which have gained about 40 percent in the last six months, were up 31 cents, or about 2 percent, at C$18.46 in late morning trade Thursday on the Toronto Stock Exchange.
