Asian Investors' Vote of Confidence In Future Growth of Sino-Forest Corporation.

Business Editors

TORONTO & HONG KONG--(BUSINESS WIRE)--Feb. 7, 2003

Convertible Notes and Convertible Preference Shares

Financing of Sino-Wood to raise US$14 Million for Expansion of

Forestry Business in China

Sino-Forest Corporation ("Sino-Forest" or the "Company") (TSX:TRE.A) is pleased to announce that its wholly-owned subsidiary, Sino-Wood Partners, Limited ("SWP") has entered into subscription agreements to raise funding of US$14 million to finance its further expansion in the growing forestry plantation industry in China. The success of this round of financing demonstrates the confidence of major Asian investors in the management strength and strong future prospects of the Company.

Founded in 1994, SWP's principal business activities include the ownership, management and operation of forestry plantations in China and sales and trading of logs, lumber and wood chips in China. SWP through its subsidiaries and joint-ventures currently has forestry plantation programmes for up to 603,000 hectares of plantation land in China. In addition to these activities, SWP also provides agency services for the sale of logs, lumber and wood chips in China.

Allen Chan, Chairman and Chief Executive Officer of Sino-Forest, said, "There continues to be a serious wood deficit situation in China. Due to environmental concerns around the world, in particular in China, forestry plantation has become an increasingly important source to meet the demand of wood. We are confident that this new financing will enable us to take full advantage of the opportunities to expand our business in China. We are already the largest independent forestry plantation company in China and are well-positioned to leverage our experience and expertise in this market to achieve strong growth in the future."

The new investment provides for SWP to issue US$14.0 million of convertible instruments ("Convertible Instruments") comprising of convertible notes and convertible preference shares to various Asian based investors including The Hongkong and Shanghai Banking Corporation Limited, Mitsubishi Corporation , Sinopac Capital Limited, Shanghai International Shanghai Growth Investment Limited, Simon Murray & Co. Limited, and Princeton Venture Partners Limited. The completion of the transaction is subject to delivery of certain consents and closing documents which is expected to occur no later than March 31, 2003. The net proceeds from the Convertible Instruments will be used primarily to purchase trees in respect of SWP's forestry business or related activities and the balance of the net proceeds as working capital for SWP. Pursuant to the terms of the subscription agreements, the Company has agreed to guarantee the obligations of SWP thereunder.

The Convertible Instruments will be issued at par value and will bear interest or dividends at a rate of 4% per annum payable in semi-annual installments and have a maturity of 18 months. In the event of a listing of the shares of SWP on the Main Board of the Hong Kong Stock Exchange before the maturity date, the Convertible Instruments will either be redeemed at the time of the listing or be converted into SWP ordinary shares at the listing price at the option of the holders of the Convertible Instruments. If no listing takes place prior to the maturity date, the Convertible Instruments will be redeemed on the maturity date at 106.24% of their subscription price plus unpaid interest or dividend. In addition, subscribers of the Convertible Instruments will be issued 51,744 class B shares in the capital of SWP, which represents approximately 5% of the currently outstanding number of ordinary shares of SWP. The class B shares have the identical attributes as the ordinary shares of SWP except that holders of class B shares are not entitled to dividends. The class B shares are convertible into ordinary shares on a one-for-one basis.

The Company is confident that a separate listing of one of its main businesses in Hong Kong at a more reasonable valuation would help underpin its fair value, as the management believes the Company is currently substantially undervalued. This funding round has brought together a group of institutional investors which helps strengthen and broaden the capital base of SWP, and together with the possible separate listing of SWP will enhance the value for the Company's shareholders.

The Class A Subordinate-Voting Shares of the Company trade on the Toronto Stock Exchange under the symbol "TRE.A".

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 Sino-Forest 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.