The following discussion of our financial condition and results of operations should also be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Overview

The Company was formed on June 4, 1999 to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination with a company having its primary operations in the PRC. On November 19, 2007, we consummated the acquisition of Keenway Limited, Hong Kong Yi Tat, and the then shareholders of Keenway Limited, including Chen Minhua, Fan Yanling, Zhang Xinchen, Extra Profit International Limited, and Lucky Glory International Limited (collectively, the "Keenway Limited Shareholders"), received newly issued shares of our common stock (the "Merger").

We currently operate the Great Golden Lake tourist destination (Global Geo-park), Hua'An Tulou cluster (or the "Earth Buildings") tourist destination (World Culture Heritage), and Yunding Recreational Park (Large-scale National Recreational Park), covering over 300 square kilometers in total. Our media business provides operating management service, including channel and advertisement management for the FETV since 2004 and the "Journey through China on the Train" on-board railway program ("Railway Media"). As of December 31, 2010, we, through our wholly owned subsidiaries in China, have entered into four additional cooperation agreements respectively with the local Chinese government agents, namely, (i) the Anhui Province Bengbu Municipal Government; (ii) the Jiangxi Province Zhangshu Municipal Government; (iii) the Fenyi County, Xinyu City, Jiangxi Province Government; and (iv) the Fujian Education Media Limited Company, a wholly state-owned company organized by the Fujian Education Television Station ("FETV"). Under these agreements, we have obtained the right to construction and development of the Ming Dynasty Entertainment World Project
("Ming Dynasty Entertainment World") including the purchase of the forty (40)
years land use rights for a parcel of approximately 250 Mu for commercial land use purpose and another parcel of approximately 82.37 acres for industry land use purpose, as well as the construction of the Royal Hot Spring World project; the right to invest in construction and development of China Yang-sheng (Nourishing Life) Paradise Project ("Nourishing Life") (including the following projects: (i) Salt Water Hot Spring SPA & Health Center, (ii) Yang-sheng Holiday Resort, (iii) World Yang-sheng Cultural Museum, (iii) International Camphor Tree Garden, (iv) Chinese Medicine and Herb Museum, (v) Yang-sheng Sports Club, (vi) Old Town of Chinese Traditional Medicine, and (vii) various other Yang-sheng related projects and tourism real estate projects) with a forty (40) year exclusive right to develop, operate and manage a variety of caves, hot springs and other natural and cultural tourist resources identified in the Meng Mountain area, and various caves and tourist resources of the Dagang Mountain located in Fenyi County, Xinyu City, Jiangxi Province ("The City of Caves"); and the five years (three year agreement with two year renewal) of exclusive management rights for the operation of the FETV channel ("FETV").

We expect that our tourism business will be the primary source of our revenue over the next few years. Advertising business has been our primary source of revenue for the last two year because the tourism business has experienced the serious flooding and weather and the ads restriction was not executed by the local government. The revenue from advertising will decrease because of the new restriction on the advertisement and we expect that the revenue from tourism will increase. However, any increase in revenue will depend on the recovery of Great Golden Lake and the progress we make in our other tourist destinations. This expectation is also based on our new projects and construction of tourism destinations. Last year we experienced a significant flood at the Great Golden Lake which resulted in a sharp decrease of revenue because we had to close the park. It has taken a considerable amount of time for the natural beauty to be restored after the flood but we believe that the Great Golden Lake has started to recover and visitors will return to the park. Flooding does not occur on a regular basis either at the Great Golden Lake or in the province and we do not expect to see additional floods or other natural disasters affect our operations in the future. In 2012, at Great Golden Lake and at Hua'an Tulou, we do not anticipate much new construction as we are maintaining our existing operations and restoring what is already built and in operation. We do not expect any construction or restoration to affect our operations. Our advertising and tourism businesses are not seasonal. We have visitors to our parks throughout the year.

We are subject to risks common to companies operating in China, including risks inherent in our distribution and commercialization efforts, uncertainty of foreign regulatory approvals and laws, the need for future capital and retention of key employees. We cannot provide assurance that we will generate revenues or achieve and sustain profitability in the future.

Overview

Advertising Business

For the advertising business, our advertising revenue is driven by the popularity of our television programs and the number of viewers tuning into our television station. If more people tune into our station, we will be able to attract more advertisers and charge more for each advertising spot. This will increase our revenues. We strive to keep our audience rating high in order to be able to sell all our advertising air time.

We generate our advertising revenue by selling air time to sponsors and companies that are interested in marketing their products to our television viewers. We incur administrative fees, business traveling fees, salaries, depreciation, automobile and interest costs in operating the advertising business.

The new PRC regulations set forth by the State Administration for Radio, Film and Television which bans certain television and radio advertisements has had a negative effect on our revenues and certain clients have not continued to advertise. Accordingly, we expect our revenues to decline.

Tourism Business

For the tourism business, our revenue is driven by the reputation of our tourist destinations. We strive to offer quality tourist attractions that offer our visitors diverse entertainment, including catering, hotel, transportation and shopping. We generate our revenue from our visitors and tourists who are looking to enjoy our tourist location. We incur many costs associated with operating the tourist business, including, administration fees, business traveling fees, land use rights fees, and revenue sharing fees.

We entered into tourism management revenue sharing agreement with the Taining government with respect to the Great Golden Lake resort. We have contracted to share the revenue over the course of the agreement as follows: (i) from 2001 to 2006 we will receive 92% of the revenue and the Taining government will receive 8% of the revenue; (ii) from 2006 to 2012 we will receive 90% of the revenue and the Taining government will receive 10% of the revenue; (iii) from 2012 to 2016 we will receive 88% of the revenue and the Taining government will receive 12% of the revenue; (iv) from 2016 to 2022 we will receive 86% of the revenue and the Taining government will receive 14% of the revenue; (v) from 2022 to 2026 we will receive 84% of the revenue and the Taining government will receive 16% of the revenue; and (vi) from 2026 to 2032 we will receive 82% of the revenue and the Taining government will receive 18% of the revenue. Because of the decreasing revenue share that we will receive from the Great Golden Lake resort and the resort has not been fully recovered to its previous level due to the flood, we may not be able to maintain our revenues from Great Golden Lake.

However, with the recovery of Great Golden Lake and the expected grand openings of three new tourism projects in the future, we believe that we will be able to generate more revenues in order to maintain the high gross profit margins in the tourism segment.

We do expect our tourism business to be our primary source of revenue over the next few years. Although Ming Dynasty, Yang-Sheng Paradise and City of Caves is not yet operating, we do expect them to be opened by the end of 2012 and to start generating revenue by 2013. Also, we expect Yunding to continue to grow and for the Great Golden Lake to recover from the flooding.

Results of Operations

During the three months ended March 31, 2012 and 2011, we are organized into two main business segments, tourism and advertisement. The following table presents a summary of operating information for the three months ended March 31, 2012 and 2011:

                                     For the        For the three
                                   three months        months                                Increase/
 (All amounts, other than             ended             ended             Increase/          (Decrease)
 percentage, in U.S.                March 31,         March 31,          (Decrease)          Percentage
 Dollar)                               2012             2011           U.S. Dollar ($)          (%)
Net revenue                                   ?                 ?                     ?                ?
Advertisement                      $  6,194,519     $   9,868,374     $      (3,673,855 )         (37.23 )
Tourism                               1,536,190         1,915,103              (378,913 )         (19.79 )
Total net revenue                     7,730,709        11,783,477            (4,052,768 )         (34.39 )
?                                             ?                 ?                     ?                ?
Cost of revenue                               ?                 ?                     ?                ?
Advertisement                         1,559,000         2,434,822              (875,822 )         (35.97 )
Tourism                               1,267,593         1,089,401               178,192            16.36
Total cost of revenue                 2,826,593         3,524,223              (697,630 )         (19.80 )
?                                             ?                 ?                     ?                ?
Gross profit                          4,904,116         8,259,254            (3,355,138 )         (40.62 )
?                                             ?                 ?                     ?                ?
Selling expenses                      1,142,965           863,891               279,074            32.30
General and administrative
expenses                              1,279,748         1,266,610                13,138             1.04
Income from operations                2,481,403         6,128,753            (3,647,350 )         (59.51 )
Other expense, net                      (38,709 )          (5,343 )             (33,366 )         624.48
Interest income                           6,714            22,132               (15,418 )         (69.66 )
Interest expense                        (64,260 )        (192,400 )             128,140           (66.60 )
Less: Provision for income tax        1,286,188         2,005,690              (719,502 )         (35.87 )
Net income                            1,098,960         3,947,452            (2,848,492 )         (72.16 )
Net loss attributable to
non-controlling interest                 67,303            11,634                55,669           478.50
Net income attributable to China
Yida Holding Co.                   $  1,166,263     $   3,959,086     $      (2,792,823 )         (70.54 )

Net Revenue:

Net revenue decreased by approximately $4.05 million or 34%, from approximately $11.78 million for the three months ended March 31, 2011 to approximately $7.73 million for the three months ended March 31, 2012. The decrease in net revenue was primarily due to the decrease in the revenue from advertisement.

Advertisement
Our revenue from advertisement decreased by approximately $3.67 million or 37% from approximately $9.86 million for the three months ended March 31, 2011 to approximately $6.19 million for the three months ended March 31, 2012. In February 2009, our wholly-owned subsidiary, Fuzhou Fuyu Advertising Co., Ltd., entered into a six-year exclusive agreement with China's Railway Media Center to create "Journey through China on the Train" infomercial programs, pursuant to which we produce 20-minute monthly episodes focused on tourist destinations around China and travel ideas and tips with product placement advertisements. The infomercial programs are broadcasted on all high speed motor trains in China with TV panels made available by the Ministry of Railways of PRC and cable TV channels. We pay an annual fee of approximately $46,154 or RMB 300,000 to Railway Media Center for the first three years and approximately $53,846 or RMB 350,000 for the second three years. We generate revenue from selling product placement advertisements. However, since the program is broadcasted manually by train attendants, we have no control over the frequency of program broadcasting, which results in the substantial instability of our railway media revenue. We generated approximately $0.14 million from the "Journey through China on the Train" program for the quarter ended March 31, 2012 as compared to approximately $1.8 million for the same quarter in prior year.

The strict television advertising regulatory policy making by the government on educational television channel resulted in the decline in our advertisement revenue of FETV. We generated approximately $6.05 million from the operation of FETV for the quarter ended March 31, 2012 as compared to approximately $8.07 million for the same quarter in prior year.

Tourism
Our revenue from tourism decreased by approximately $0.38 million or approximately 20%, from approximately $1.92 million for the three months ended March 31, 2011 to approximately $1.54 million for the three months ended March 31, 2012, including approximately $0.53 million from the Great Golden Lake resort, $0.49 million from Yunding Park, and $0.52 million from Hua'an Tulou. The primary sources of the revenues are entrance fees, tour shuttle bus fees and restaurants. The revenue decrease in tourism business was primarily due to the revenue decrease at Tulou tourism destination due to strong competition among the homogeneous tourism destinations, including Nanjing Tulou Cluster and Yongding Tulou Cluster.

Cost of Revenue:

Cost of revenue decreased by approximately $0.70 million or approximately 20%, from approximately $3.52 million for the three months ended March 31, 2011 to approximately $2.83 million for the three months ended March 31, 2012.

Advertisement
Our cost of revenue from advertisement decreased by approximately $0.88 million or approximately 36%, from approximately $2.43 million for the three months ended March 31, 2011 to approximately $1.56 million for the three months ended March 31, 2012. The Railway media clients demanded less broadcast programs due to the instability of the railway broadcasting, so the decrease in cost of media businesses was primarily due to the decrease of railway program productions. Also the business tax decreased along with the decrease in the Company's advertising revenue.

Tourism
Our cost of revenue from tourism for the three months ended March 31, 2012 increased by approximately $0.18 million or approximately 16%, from approximately $1.09 million for the three months ended March 31, 2011 to approximately $1.27 million for the three months ended March 31, 2012. The increase was due to the increase in depreciation cost for the new construction of tourism destination in Yunding.

Gross profit:

Gross profit decreased approximately $3.36 million, or approximately 41%, from approximately $8.26 million for the three months ended March 31, 2011 to approximately $4.90 million for the three months ended March 31, 2012. Our gross profit margin was approximately 63% for the three months ended March 31, 2012, compared to approximately 70% for the same period in 2011, representing a decrease of approximately 7 percentage points.

Advertisement
Our gross profit from advertisement decreased by approximately $2.80 million, or approximately 37%, from approximately $7.43 million for the three months ended March 31, 2011 to approximately $4.64 million for the three months ended March 31, 2012. Our gross profit margin from advertisement was approximately 75% for the three months ended March 31, 2012, which was consistent with the gross profit margin for the same period in 2011.

Tourism
Our gross profit from tourism decreased by approximately $0.56 million, or approximately 67%, from approximately $0.83 million for the three months ended March 31, 2011 to approximately $0.27 million for the three months ended March 31, 2012. Our gross profit margin from tourism was approximately 17% for the three months ended March 31, 2012, compared to the gross profit margin of tourism of approximately 43% for the same period in 2011. The decrease of gross profit margin was primarily attributable to fixed cost derived from depreciation of property and equipment at tourism spots that remained steady despite the decrease in tourism revenue, as well as increase in depreciation cost for the new construction of tourism destination in Yunding.

Selling Expenses:

Our selling expenses were approximately $1.14 million for the three months ended March 31, 2012, compared to approximately $0.86 million for the three months ended March 31, 2011, which represents an increase of approximately $0.28 million, or approximately 32%. The increase in selling expense was primarily due to the increase in variable costs associated with the expansions at Yunding Park during the three months ended March 31, 2012.

General and Administrative Expenses:

Our general and administrative expenses were approximately $1.28 million for the three months ended March 31, 2012, compared to approximately $1.27 million for the three months ended March 31, 2011, which represents a slight increase of approximately $0.01 million, or approximately 1%. General and administrative expenses remained substantially steady.

Income Tax:

Income tax was approximately $1.29 million for the three months ended March 31, 2012, representing a decrease of approximately $0.72 million or approximately 36%, compared to the approximately $2.01 million for the three months ended March 31, 2011. The decrease was primarily attributable to the lower revenue generated from the Tulou tourism destination, as well as decrease in the railway media revenue for the three months ended March 31, 2012 as compared with the same period in 2011.

Net Income:

As a result of the above factors, we have net income of approximately $1.10 million for the three months ended March 31, 2012 as compared to net income of approximately $3.95 million for the three months ended March 31, 2011, representing a decrease of approximately $2.85 million or approximately 72%. The decrease was primarily attributable to the lower revenue generated from the Tulou tourism destination, as well as the railway media revenue for the three months ended March 31, 2012 as compared with the same period in 2011.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity during the three months ended March 31, 2012 include cash from operations and proceeds from long-term loans. Net proceeds from long-term loans were approximately $5.52 million.

As of March 31, 2012, we had cash and cash equivalents of approximately $4.14 million as compared to approximately $5.69 million as of December 31, 2011, representing a decrease of $1.54 million. The decrease was due to the decrease in revenue generated from Tulou tourism destination and railway media broadcast, the increase in expenditures on activities related to obtaining land use rights and on constructions in progress at the China Yang-sheng Paradise and the City of Caves.

As of March 31, 2012, our working capital was approximately $4.72 million as compared to $3.76 million as of December 31, 2011.

The following table sets forth a summary of our cash flows for the years indicated:

                                                               For the three months ended March 31,
                                                                  2012                      2011

Net cash provided by operating activities                  $         1,787,909       $        4,604,275
Net cash used in investing activities                      $       (7,661,745)       $         (555,680 )
Net cash provided by financing activities                  $         4,290,115       $       10,183,455

Net cash provided by operating activities was approximately $1.79 million for the three months ended March 31, 2012, compared to approximately $4.60 million for the three months ended March 31, 2011. The decrease of $2.82 million was primarily due to the decrease in revenue generated from the Tulou tourism destination, and railway media broadcasts.

Net cash used in investing activities was approximately $7.66 million for the three months ended March 31, 2012, compared to approximately $0.56 million for the three months ended March 31, 2011. The increase in net cash used in investing activities was due to the increase in expenditures on activities related to obtaining land use rights and on constructions in progress at the China Yang-sheng Paradise and the City of Caves..

Net cash provided by financing activities amounted to approximately $4.29 million for the three months ended March 31, 2012, compared to approximately $10.18 million for the three months ended March 31, 2011, representing a decrease of approximately $5.89 million. The decrease in net cash provided by financing activities was mainly because of the lower amount of bank loans obtained during the three months ended March 31, 2012 as compared to the three months ended March 31, 2011.

Bank loans

The Company has five bank loans from four institutional lenders for the development of the tourism destinations.

1. A loan for approximately $0.95 million from Fujian Haixia Bank (formerly known as Merchant bank of Fuzhou). The loan bears interest at 9.184% per annum, and is due November 4, 2012. It is guaranteed by Fujian Jintai Tourism Development Co., Ltd.

2. A loan for approximately $13.78 million from Industrial and Commercial Bank of China Limited. The loan bears interest at 7.76% per annum. $1,967,618 (RMB 12,420,000) will be due in each twelve-month period as of March 31, 2013, 2014, 2015, 2016, 2017 and 2018, respectively, and $1,977,124 (RMB 12,480,000) will be due in the twelve-month period as of March 31, 2019. It is collateralized by the right to collect ticket sales at the Great Golden Lake.

3. A loan for approximately $10.30 million from Industrial and Commercial Bank of China Limited. It bears interest at 6.40% per annum. $1,108,963 (RMB 7,000,000), $1,742,658 (RMB 11,000,000), $1,901,081 (RMB 12,000,000), $2,217,927 (RMB 14,000,000), $2,376,350 (RMB 15,000,000), and $950,539 (RMB 6,000,000) will be due in each of the twelve-month period as of March 31, 2013, 2014, 2015, 2016, 2017 and 2018, respectively. It is secured by credit guarantee of Fujian Jintai and the right to collect ticket sales at Yunding Park as additional collateral.

4. A loan for approximately $5.35 million from Industrial and Commercial Bank of China Limited. The loan bears interest at 7.76% per annum. $792,116 (RMB 5,000,000) will be due in each twelve-month period as of March 31, 2013, 2014, 2015, 2016, 2017 and 2018, respectively, and $594,087 (RMB 3,750,000) will be due in the twelve-month period as of March 31, 2019. It is collateralized by the right to collect ticket sales at the Tulou tourism destination, fixed assets of Fujian Tulou and personal guarantee by directors as additional collateral.

5. A loan for approximately $6.10 million from China Minsheng Banking Corp, Ltd.. The loan bears interest at 11.97% per annum. $1,584,233 (RMB 10,000,000), $4,119,008 (RMB 26,000,000), and $396,059 (RMB 2,500,000) will be due in each twelve-month period as of March 31, 2013, 2014, and 2015, respectively. It is secured by credit guarantee of Fujian Jintai, collateralized by the fixed assets of Fujian Yida and personal guarantees by two of the Company's directors as additional collateral.

In the coming 12 months, we have approximately $6.40 million in bank loans that will mature. We plan to replace these loans with new bank loans in approximately the same aggregate amounts.

We believe that our currently available working capital, credit facilities referred to above and the expected additional credit facility should be adequate to sustain our operations at the current level for the next twelve months.

Obligations Under Material Contracts

Below is a table setting forth the Company's material contractual obligations as
of March 31, 2012:

                                                            Payment due by period
Contractual                                                                                More than
Obligations               Total           1 year         1-3 years        3-5 years         5 years

Bank Loans             $ 36,476,980     $ 6,403,473     $ 13,678,274     $ 10,113,748     $  6,281,485
Operating Lease
Obligations              14,189,967         333,639          554,117          538,178       12,764,033
Obligation under
airtime rights            3,385,992       2,585,469          800,523                -                -
Total                  $ 54,052,939     $ 9,322,581     $ 15,032,914     $ 10,651,926     $ 19,045,518

Capital Commitments

China Yang-sheng Paradise
As of March 31, 2012, the total estimated contract costs to complete China Yang-sheng Paradise are approximately $14,348,400 (RMB 90.57 million, excluding interest to be capitalized) of which the Company has completed and paid for approximately $13,386,400 (RMB 84.50 million), including capitalized interest. The remaining will be completed and paid for by the end of 2012.

City of Caves
As of March 31, 2012, the total estimated contract costs to complete City of Caves are approximately $12,868,700 (RMB 81.23 million, excluding interest to be capitalized) of which the Company has completed and paid for approximately $12,231,100 (RMB 77.21 million), including capitalized interest. The remaining . . .