The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K /A. 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.

General

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, 2011, 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.

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 are 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

The Company is organized into two main business segments, tourism and advertisement. The following table presents a summary of operating information for the years ended December 31, 2011 and 2010:

                                              For the Year Ended December 31,          Increase/         Increase/
                                                 2011                  2010            (Decrease)       (Decrease)
                                            US Dollar ($)         US Dollar ($)      US Dollar ($)      Percentage
Net revenue                                               ?                    ?                  ?               ?
Advertisement                                    32,969,701           37,902,286         (4,932,585 )        -13.01 %
Tourism                                           9,240,159           16,623,761         (7,383,602 )        -44.42 %
Total net revenue                                42,209,860           54,526,047        (12,316,187 )        -22.59 %
?                                                         ?                    ?                  ?               ?
Cost of revenue                                           ?                    ?                  ?               ?
Advertisement                                     8,463,917            8,096,232            367,685            4.54 %
Tourism                                           5,050,485            4,206,057            844,428           20.08 %
Total cost of revenue                            13,514,402           12,302,289          1,212,113            9.85 %
?                                                         ?                    ?                  ?               ?
Gross profit                                     28,695,458           42,223,758        (13,528,300 )        -32.04 %
?                                                         ?                    ?                  ?               ?
Selling expenses                                  4,917,097            3,741,285          1,175,812           31.43 %
General and administrative expenses               4,793,723            3,883,009            910,714           23.45 %
Loss on construction in progress                          -              403,057           (403,057 )          -100 %
Operating income                                 18,984,638           34,196,407        (15,211,769 )        -44.48 %
Other income (expense)                             (101,528 )             (9,399 )          (92,129 )        980.20 %
Interest income                                      94,910               91,866              3,044            3.31 %
Interest expenses                                  (257,472 )            (41,654 )         (215,818 )       -518.12 %
Income tax expenses                               6,770,841            8,990,470         (2,219,629 )        -24.68 %
Net income                                       11,949,707           25,246,750        (13,297,043 )        -52.66 %
Net loss attributable to non-controlling
interest                                            195,823               25,751            170,072          660.45 %
Net income attributable to China Yida            12,145,530           25,272,501        (13,126,971 )        -51.94 %

Net Revenue:

Net revenue decreased by approximately $12.32 million or approximately 22.6%, from approximately $54.53 million for the year ended December 31, 2010 to approximately $42.21 million for the year ended December 31, 2011.

Advertisement
Advertisement revenue decreased by approximately $4.93 million or approximately 13% from approximately $37.90 million for the year ended December 31, 2010, to approximately $32.97 million for the year ended December 31, 2011. We generated approximately $29.69 million from the operation of FETV in 2011 as compared to $31.32 million in 2010, and $3.28 million from the "Journey through China on the Train" program in 2011 as compared to $6.58 million in 2010.

This decrease was primarily due to the instability of the railway media broadcast revenue as compared with 2010. Instability means that the program is broadcasting manually by the train attendant, we cannot monitor how he/she broadcasts the tape, or whether he/she has inserted the program tape or not. Railway program is a 20 minute infomercial program, the content of the programs are tourism news and information. Advertising clients choose the length of the advertisement during the program, and the period of time they want the advertisement to be broadcasted. Recently some clients decide to purchase less advertisement from the company, and they may consider give up the railway promotion and terminate the cooperation with the company due to the instability of the railway program. The operators determine in their sole discretion to broadcast the railway program or not. We cannot monitor the operator's daily work. The advertisers were concerned about our lack of control over the frequency of program broadcasting and therefore purchased fewer advertising spots from us which resulted in the decrease in revenue from railway media broadcast.

We generate revenue from the "Journey through China on the Train" program which is the only railway media broadcast we produced so far. 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 an infomercial program named "Journey through China on the Train", pursuant to which we produce 20 minute monthly episodes focused on tourist destinations around China and travel ideas and tips with infomercial advertisements. The infomercial program is broadcast on seven railway lines into Tibet, all high speed motor trains in China with TV panels made available by Ministry of Railways of P. R. China and cable TV channels covering 18 railway bureaus. We agree to 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. At the end of 2011, "Journey through China on the Train" was shown on approximately 108 railroad lines.

Advertisement revenue from FETV also has experienced a 5.2% fall from $31.32 million to $29.69 million due to actions by domestic media authorities restricting the broadcasting manner and content of TV advertising. The new restricting content of TV advertising included shopping programs, mini ads and certain medical advertisements. On August 1, 2010, Fuyu, our wholly-owned subsidiary, entered into a Fujian Education Television Channel Project Management Agreement (the "Agreement"), with Fujian Education Media Limited Company, a wholly state-owned company organized by the Fujian Education TV Station under the laws of the People's Republic of China ("Fuijan Education Media"), pursuant to which, Fujian Education Media granted to us five years of exclusive management rights for the FETV channel from August 1, 2010 to July 31, 2015. Under the management contract, we obtained the full rights to provide programming and content management services and to re-sell all advertising airtime of FETV. We have leveraged the FETV assets to produce high quality TV programming focused on tourism, successfully promoting our own tourist attractions branding the FETV station around the tourism theme and creating a network of potential partners for our tourism business, including hotels, travel agents, and entertainment resorts.

Tourism
Tourism revenue decreased by approximately $7.38 million or approximately 44.4%, from approximately $16.62 million to approximately $9.24 million, including $4.94 million from the Great Golden Lake resort, $1.28 million from Yunding Park and $3.02 million from Hua'an Tulou. The primary sources of the revenues are entrance fees, tour shuttle bus fees and restaurants. The decrease was primarily due to a decrease in the number of tourists visiting the Great Golden Lake Resort in the year of 2011. The effect of the flooding that occurred at the Great Golden Lake Resort during the second half of 2010 reduced the number of tourists visiting in the whole year of 2011. The decrease in revenue is also attributed to the strong competition among the homogeneous tourism destinations, including Nanjing and Yongding Tulou Cluster and the poor road condition that connect from Yongtai Town to Yunding Park.

Great Golden Lake. In 2011, we had approximately 312,000 visitors to the Great Golden Lake, as compared to 470,000 visitors in 2010. The number tourists decreased 33.62% and the revenue generated from the site decreased 57.71% in 2011. The decrease in revenue not only contributed to the decrease in the number of tourists, also contributed to our deeper ticket discount.

Yunding Park. In 2011, we had 54,000 visitors to Yunding Park and compared to 25,000 in 2010. The number of tourists increased 116% and the revenue increased 141.51% in 2011. The dramatically increase in revenue is because Yunding Park only started operation in the 4 th quarter of 2010.

Hua'an Tulou Cluster. In 2011, Hua'an Tulou Cluster had 203,000 visitors as compared to 235,000 in 2010, a decrease of 13.6% , and gross ticket sales of approximately $2.43 million as compared to $3.94 million in 2010, a decrease of 41.2%. We are facing strong competition among the homogeneous tourism destinations such as Nanjing Tulou Cluster and Yongding Tulou Cluster. The gross ticket sales decrease of 41.2% because we have to provide deeper ticket discount among the strong completion and the tourist consumption was also decreased. We expect this trend to continue in the future.

Cost of Revenue:

Cost of revenues increased by approximately $1.21 million or approximately 9.85%, from approximately $12.30 million for the year ended December 31, 2010 to approximately $13.51 million for the year ended December 31, 2011.

Advertisement
Cost of revenue from advertisement increased by approximately $0.36 million or approximately 4.54%, from approximately $8.10 million to approximately $8.46 million. The increase was due to production costs for the railway media broadcasting and the acquisition of the commercial airtime rights to resell the commercial airtime to advertisers commencing August 1, 2010 through July 31, 2013 for FETV.

Tourism
Cost of revenue from tourism increased by approximately $0.84 million or approximately 20.08%, from approximately $4.21 million to approximately $5.05 million. The increase was due to the increase of depreciation cost for the new construction of tourism destination in Yunding.

Gross profit:

Gross profit decreased approximately $13.52 million, or approximately 32.04%, from approximately $42.22 million for the year ended December 31, 2010 to approximately $28.70 million for the year ended December 31, 2011. Our gross profit margin was approximately 68% in 2011, as compared to approximately 77% for the same period in 2010.

Advertisement
Gross profit from advertisement decreased by approximately $5.30 million, or approximately 18%, from approximately $29.81 million to approximately $24.51 million. Gross profit margin from advertisement was approximately 74% for 2011, as compared to approximately 79% for the same period in 2010. This decrease was primarily attributable to the instability of revenue generated from the railway media broadcasts, as compared with the same period in 2010 and that the increase in contracting costs associated with FETV's commercial airtime.

Tourism
Gross profit from tourism decreased by approximately $8.22 million, or approximately 66%, from approximately $12.41 million to approximately $4.19 million. Gross profit margin from tourism was approximately 45% in 2011, as compared to approximately 75% for the same period in 2010. The decrease of gross profit margin was primarily attributable to the effect of the flooding that occurred at the Great Golden Lake Resort during the second half of 2010. The fixed costs at the resorts remained constant except for the increase in depreciation expenses under cost for the new construction of tourism destination in Yunding.

Selling Expenses:

Selling expenses were approximately $4.92 million for the year ended December 31, 2011, compared to approximately $3.74 million for the year ended December 31, 2010, which represents an increase of approximately $1.18 million, or approximately 31%. The selling expense increases according with the increase in variable costs due to the business expansions in our newly opened Yunding resort during 2011, as the resort had not been operational during the same period in 2010.

General and Administrative Expenses:

General and administrative expenses were approximately $4.79 million for the year ended December 31, 2011, as compared to approximately $3.88 million for the year ended December 31, 2010, an increase of approximately $0.91 million, or approximately 23%. The increase was primarily due to an increase in stock based compensation expense related to the issuance of stock options and an increase in management fees for new projects in 2011.

Income Tax:

Income tax expense was approximately $6.77 million for the year ended December 31, 2011, a decrease of approximately $2.22 million or approximately 25%, as compared to the approximately $8.99 million income tax expense for the year ended December 31, 2010. The decrease was primarily attributable to lower revenue generated from Great Golden Lake and the railway media broadcasts.

Net Income:

As a result of the above factors, net income was approximately $12.15 million for the year ended December 31, 2011, as compared to net income of approximately $25.27 million for the year ended December 31, 2010, a decrease of approximately $13.12 million or approximately 52%. The decrease was primarily attributable to the decrease in revenue generated from Great Golden Lake and railway media broadcasts, as compared with the same period in 2010.

Liquidity and Capital Resources

Our principal sources of liquidity include cash from operations and proceeds from long term debt. The debt provided net proceeds of approximately $25.79 million.

At December 31, 2011, we had cash and cash equivalents of approximately $5.68 million as compared to approximately $7.15 million as of December 31, 2010, representing a decrease of $1.47 million. The decrease was primarily due to no issuance of common stock in connection with a registered direct offering that we closed in the same period in 2010, the adverse effect of restoration of the Great Golden Lake Resort which was offset by the proceeds from long term debt and repayment of loan from non-controlling interest. At December 31, 2011, our working capital was approximately $3.76 million.

Net cash provided by operating activities was approximately $17.41 million for 2011 as compared to approximately $30.17 million in 2010. The decrease of $12.76 million was primarily due to a decrease in net income resulting from a decrease in the number of tourists visiting the Great Golden Lake Resort during the restoration of the resort and decrease in the number of advertisers because of the instability of the railway media broadcast. The increase of accounts receivable, advances and prepayments and payment to accounts payable contribute adverse effect to net cash provided by operating activities.

Net cash used in investing activities was approximately $47.95 million in 2011 as compared to approximately $55.21 million in 2010, representing a decrease in capital expenditures of approximately $7.26 million due to the fact that the construction of the various resorts was nearly complete during the year ended December 31, 2011. The decrease in net cash used in investing activities was mainly due to: (i) most of Yunding Park constructions have been completed in 2010, so the construction in progress reduced drastically. The cash has been reduced about $46.8 million; and (ii) we increased the expenditures for obtaining land use right in Zhangshu city. The payment in cash was $20.9 million more than previous year. After offsetting $46.8 million by $20.9 million, our totally net cash used in investing activities was still decreasing.

Net cash provided by financing activities amounted to approximately $28.87 million in 2011, compared to approximately $26.11 million in 2010, representing an increase of approximately $2.76 million, mainly due to the proceeds from long term debt offset by the increase of repayment of obligation under airtime rights commitment in 2011.

Bank loans

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

1. A loan for approximately $0.94 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 $13.68 million from Industrial and Commercial Bank of China Limited. The loan bears interest at 7.76% per annum. $1,953,291 (RMB12,420,000) will be due in 2012, 2013, 2014, 2015, 2016, 2017 respectively and $1,962,727 (RMB12,480,000) will be due in 2018 and the final installment due October 25, 2018. It is collateralized by the right to collect resort ticket sales at the Great Golden Lake.

3. A loan for approximately $10.62 million from Industrial and Commercial Bank of China Limited. It bears interest at 6.40% per annum. $1,022,254 (RMB6,500,000) will be due in 2012; $1,336,793
(RMB8,500,000) will be due in 2013; $1,729,968 (RMB11,000,000) will be due in 2014; $2,123,142 (RMB13,500,000) will be due in 2015; $2,201,777 (RMB14,000,000) will be due in 2016 and $2,201,777 (RMB14,000,000) will be due in 2017 and the final installment due December 15, 2017. It is secured by credit guarantee of Fujian Jintai and the right to collect resort ticket sales at Yunding resort as additional collateral.

4. A loan for approximately $5.50 million from Industrial and Commercial Bank of China Limited. The loan bears interest at 7.76% per annum. $786,349 (RMB5,000,000) will be due in 2012, 2013, 2014, 2015, 2016, 2017 and 2018 respectively and the final installment due November 22, 2018. It is collateralized by the right to collect resort ticket sales at the Tulou resort, fixed assets of Fujian Tulou and personal guarantee by directors as additional collateral.

In the coming 12 months, we have approximately $4.71 million in bank loans that will mature. We plan to replace these loans with new bank loans in approximately the same aggregate amounts.

We do not expect any large mandatory capital expenditure in the long term period. We believe we can arrange capitals or funds for construction projects based on the actual cash flow expenditures, which means we can accelerate the construction when we have more cash flows and we can slow down the construction when we are lack of funds. 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.

Capital commitment

Jiangxi Zhangshu Yangsheng TianTang Resort As at December 31, 2011, the total estimated contract costs to complete Jiangxi Zhangshu Yangsheng TianTang resort are approximately $14,244,000 (RMB90.57 million) of which the Company has completed and paid for approximately $12,050,000 (RMB76.62 million). The remaining $2,194,000 (RMB13.95 million) will . . .