CFZ Cathay Forest Products Corp

Cathay Forest Corp. ("Cathay Forest" or "the Company") (TSX VENTURE:CFZ)
reported financial results for the quarter ended March 31, 2010. All financial
figures in this release are expressed in Canadian dollars unless otherwise
stated.


Financial Highlights



--  Revenue increased 7% to $6.7 million versus $6.3 million for the same
    period last year. 
--  Gross Profit margin increased to 14% versus 9% in Q1 2009. 
--  Gross Profit increased 72% in Q1 2010 to $921,925 versus $536,048 last
    year. 
--  Net Income was ($1.3) million this quarter versus ($1.1) million in Q1
    2009, which resulted in a loss per share of ($0.009). 

($cdn millions, except     Three months ended        Tweleve months ended   
 per share amounts)              March-31                  December-31      
                          2010     2009   Change     2009     2008   Change 
                           ($)      ($)      (%)      ($)      ($)      (%) 
----------------------------------------------------------------------------
Revenue                    6.7      6.3        7%    57.8     24.8      133%
Gross Profit               0.9      0.5       72%     5.4      1.3      303%
Gross Profit Margin       13.8%     8.5%              9.4%     5.4%         
Net Income                (1.3)    (1.1)     -15%    (3.1)    (4.5)      32%
Diluted EPS              (0.01)   (0.01)      -6%   (0.03)   (0.04)      33%
Cash Flow from                                                              
 Operating Activities     (3.7)     0.3    -1500%     1.4    (10.0)     114%



Cathay Forest's first quarter results were reflective of the seasonal nature of
the business. Total revenue for Q1 2010 increased 7% to $6.7 million from $6.3
million over the previous year. This increase was mainly attributable to
increased volumes from the sale of imported logs from Russia.


Additionally, gross profit increased 72% in Q1 2010 to $0.9 million from $0.5
million in Q1 2009. Consolidated gross profit margin increased to 13.8% versus
8.5% last year, mainly due to improved prices as well the stability of cost of
sales which in the previous year had been impacted by the downturn in the
economy and postponement in the increase in export tariffs in Russia.


Net income decreased 15% to ($1.3) million from ($1.1) million, net income per
share decreased to $0.009 from $0.010 in 2009.


Selling and Marketing, General and Administration Expenses

The Company's Selling and Marketing, General and Administration Expenses
increased 5%, to $1.7 million in the first quarter from $1.6 million for the
comparable period last year. The slight increase in selling and marketing is
attributable to an increase in internal resources as a result of the increase in
log importing volumes as well as the establishment of the Russian operations
which was in the early stages in the first quarter of 2009.


Net Income

As a result of the above, the net loss for the quarter was ($1.3) million versus
a loss of ($1.1) million in Q1 2009.


Cash Flow from Operating Activities of Continuing Operations

At the end of the first quarter, the Company's cash used in operating activities
was $5.2 million versus cash provided by operating activities of $0.3 million a
year ago. The significant use of cash in the first quarter of 2010 was due to an
increase in inventory levels to normalized levels and the increase in other
receivables.


Notice of Conference Call

Cathay Forest will hold an investor conference call to further discuss its first
quarter 2010 operating and financial results on June 1, 2010 at 10 AM EST. To
participate, please dial 1-416- 340-8061 for local callers, or 1-866-225-0198
for North American toll-free access. Alternatively, to listen to a replay of the
conference call, dial 1-416-695-5800 (Toll-Free: 1-800-408-3053), and enter pass
code 7626043. The replay of the conference call will be available for 14 days.


About Cathay Forest Products Corp.

Cathay Forest is a forest products company that manages approximately 1,000,000
hectares of standing timber properties and fast-growth, high-yield poplar
plantations in China and Russia. Cathay Forest is building a world-class forest
products company through a customer base that includes the domestic Chinese pulp
and paper industry and other wood products customers in the Japanese market.


All statements, other than statements of historical fact, in this news release
are forward-looking statements that involve various risk and uncertainties,
including, without limitation, statements regarding the future plans and
objectives of Cathay Forest. We caution readers not to place undue reliance on
these statements as a number of important factors could cause actual results and
future events to differ materially from the plans, objectives, expectations and
intentions expressed in such forward-looking statements. Except as required
under applicable securities laws, Cathay Forest assumes no obligations to update
forward-looking statements should circumstances or management's estimates or
opinions change.

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