1) What would you call a 'conservative' yield assumption? How about survival? The discount rate has a dual effect - it locks in accounting 'profits' for QIN as the discount unwinds, which hides a multitude of silvicultural sins.
2) I think that analysis shows may have a faulty understanding of economics. A demand curve is the amount of product demanded at a price. Clearly there is less demand for a product if its price is higher, and more if the price is lower. What a market does is match supply and demand, through the mechanism of price. Here's a picture (sorry for my terrible handwriting):
The key point on that chart are where the supply and demand curves (ie how much the market can supply at a price and how much it will demand at a price) intersect - that sets the price in the market.
Now if QIN do actually get their act together, there's going to be a vast increase in global supply - the supply curve will move enormously to the right. The market won't be able to reduce or increase production much in response to price (supply is still inelastic), but because of historical plantings much more product will be on the market. That translates to a shift in the supply curve to the right. That in turn means that new supply curve will intersect with the demand curve (thus matching supply and demand) at a lower price.
QIN Price at posting:
$1.15 Sentiment: Sell Disclosure: Held
