The company is an enterprise with real mature forest resources, but in the 12 years since its listing, its profitability and performance have all been at the middle and downstream levels of the industry. This is related to domestic forestry-related policies and management systems. Since the company went public in 1996, the average annual profit was only 21.84 million yuan (including government tax rebates and subsidies), and earnings per share were only 0.15 yuan, while Jilin Forest Engineering, which has many comparable factors, reached 88.61 million yuan and 0.31 yuan per year. This does not match the company's economic forest resources of nearly 1 million mu (the most in the industry) and total woodland resources of 1.81 million mu. The company explained that this was due to differences in tree species, stands, yield, etc. between the two companies. The research found that policies to strictly control timber harvesting indicators, etc. have obvious binding effects on the company, which is an important reason for the company's current situation. There are many reasons for the obvious year-on-year decline in the company's 2008 interim results. The inflection point for performance improvement may be in 2009. In addition to the 3.52% increase in operating income in mid-2008, the company's main performance and financial indicators all showed a large or even huge year-on-year decline. For example, the gross margin of wood-based panels and timber fell by 40.41% and 11.77%, respectively, net profit fell by 254%, and lost 5.91 million yuan. The reason the company explained this was that raw material costs, labor costs, and period expenses rose, and believed that the current policy on easing timber harvesting restrictions was still unclear, and there was not much substantial impact on the company's recent performance. We found that the current reform of collective forest rights is progressing by leaps and bounds, and the proper relaxation of corporate deforestation targets will not be long in the future, probably in 2009, thus bringing an inflection point to the company's performance. The company's forestry resources are of great value. Our preliminary assessment of the company's forestry value shows that the timber value of 600,000 mu of collective woodland in its 940,000 mu commercial forest is about 3.4 billion yuan, which is nearly three times higher than the current market value of the company's stock. However, once the reform of the collective forest rights system is gradually put in place, especially when timber harvesting restrictions are moderately relaxed, the company's direct economic benefits and level of performance will rise dramatically. Performance forecast and investment rating: Under certain scenarios, we expect the company's main revenue to increase by 13.3%, 19.8% and 23.7% respectively, net profit by 32.2%, 39.5% and 41.4%, and EPS of 0.17 yuan, 0.24 yuan, and 0.33 yuan in 2008-2010. Since it is impossible to clearly determine when the company can achieve the industry management system and policies to reach an inflection point in performance, we will not give a rating for the time being.