Index





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_______________

FORM 10-QSB

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Quarterly Period Ended September 30, 2003



Or

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Transition Period From _________________ to _________________



Commission file number 000-29077







TEDA TRAVEL INCORPORATED

(Exact name of registrant as specified in its charter)

| |                                                                |                                        
| | -------------------------------------------------------------- | ---------------------------------------
| | Florida                                                        | 65-0963971                             
| | (State or other jurisdiction of
Incorporation or organization) | (I.R.S. Employer
Identification Number)



Suite 1801, Chinachem Johnston Plaza, 178 Johnston Road, Wanchai, Hong Kong

(Address of principal executive offices)(Zip Code)



(011)(852) 2833-2186

(Registrant's telephone number, including internation code and area code)





(Former name, former address and former fiscal year, if changed since last report)

_______________



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [ X ]     No [   ]



As of November 14, 2003, the Issuer had outstanding 5,950,000 shares of the Issuers common stock, $.001 par value.



Transitional Small Business Disclosure Format (Check One):  Yes [   ]  No [ X ]









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TEDA TRAVEL INCORPORATED



INDEX



FORM 10-QSB



JUNE 30, 2003



|                                                                                               | PAGE
|---------------------------------------------------------------------------------------------- | ----
|PART I.  FINANCIAL INFORMATION                                                                 |     
|                                                                                               |     
|Item 1.  Condensed Consolidated Financial Statements                                           |     
|                                                                                               |     
|Condensed Consolidated Balance Sheets                                                          | 3   
|                                                                                               |     
|Condensed Consolidated Statements of Operations                                                | 4   
|                                                                                               |     
|Condensed Consolidated Statements of Cash Flows                                                | 5   
|                                                                                               |     
|Notes to Condensed Consolidated Financial Statements                                           | 6   
|                                                                                               |     
|Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations | 9   
|                                                                                               |     
|Item 3.  Controls and Procedures                                                               | 12  
|                                                                                               |     
|PART II.  OTHER INFORMATION                                                                    |     
|                                                                                               |     
|Item 6.  Exhibits                                                                              | 13  
|                                                                                               |     
|SIGNATURES                                                                                     | 14  
|                                                                                               |     
|Exhibit Index                                                                                  |     





2



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Index



PART I - FINANCIAL INFORMATION



Item 1.  Financial Statements



TEDA TRAVEL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

AS OF SEPTEMBER 30, 2003

(UNAUDITED)



|ASSETS                                                                                       
|---------------------------------------------------------------------------------------------
|                                                                                             
|CURRENT ASSETS                                                                               
|Cash                                                                                         
|Accounts receivable, net                                                                     
|Prepaid expenses and other current assets                                                    
|Total Current Assets                                                                         
|                                                                                             
|PROPERTY AND EQUIPMENT  NET                                                                 
|                                                                                             
|INVESTMENT IN AFFILIATE                                                                      
|                                                                                             
|TOTAL ASSETS                                                                                 
|                                                                                             
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                     
|                                                                                             
|CURRENT LIABILITIES                                                                          
|Accounts payable and accrued expenses                                                        
|Due to related parties                                                                       
|Convertible note payable - stockholder                                                       
|                                                                                             
|TOTAL LIABILITIES                                                                            
|                                                                                             
|COMMITMENTS AND CONTINGENCIES                                                                
|                                                                                             
|STOCKHOLDERS DEFICIENCY                                                                     
|Common stock, $.001 par value, 10,000,000 shares authorized,
5,950,000 issued and outstanding
|Additional paid-in capital                                                                   
|Accumulated deficit                                                                          
|Total Stockholders Deficiency                                                               
|                                                                                             
|TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY                                               



See accompanying notes to the condensed consolidated financial statements



3



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Index



TEDA TRAVEL INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                                         | For the Three
Months Ended
September 30,
2003 |           | For the Three
Months Ended
September 30,
2002 |   | For the Nine
Months Ended
September 30,
2003 |   | For the Nine
Months Ended
September 30,
2002 |          
|------------------------------------------------------------------------ | --------------------------------------------- | --------- | --------------------------------------------- | - | -------------------------------------------- | - | -------------------------------------------- | ---------
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|REVENUE, NET                                                             | $                                             | 127,123   |                                               | $ | 134,247                                      |   | $                                            | 271,353  
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|EXPENSES                                                                 |                                               |           |                                               |   |                                              |   |                                              |          
|Management fees                                                          |                                               | 7,692     |                                               |   | 40,528                                       |   |                                              | 23,077   
|Payroll                                                                  |                                               | 48,741    |                                               |   | 31,658                                       |   |                                              | 144,376  
|Other selling, general and administrative                                |                                               | 82,392    |                                               |   | 56,853                                       |   |                                              | 249,375  
|Total Expenses                                                           |                                               | 138,825   |                                               |   | 129,039                                      |   |                                              | 416,828  
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|(LOSS) INCOME FROM OPERATIONS                                            |                                               | (11,702   | )                                             |   | 5,208                                        |   |                                              | (145,475 
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|OTHER (EXPENSE) INCOME                                                   |                                               |           |                                               |   |                                              |   |                                              |          
|Other income                                                             |                                               | 3         |                                               |   | 76                                           |   |                                              | 39       
|Equity in loss of affiliate                                              |                                               | (247,528  | )                                             |   | (209,044                                     | ) |                                              | (805,311 
|Total Other Expense                                                      |                                               | (247,525  | )                                             |   | (208,968                                     | ) |                                              | (805,272 
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|LOSS BEFORE TAXES                                                        |                                               | (259,227  | )                                             |   | (203,760                                     | ) |                                              | (950,747 
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|Income taxes                                                             |                                               | 8,025     |                                               |   | 6,554                                        |   |                                              | 15,933   
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|NET LOSS                                                                 | $                                             | (267,252  | )                                             | $ | (210,314                                     | ) | $                                            | (966,680 
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|Net loss per common share - basic and diluted                            | $                                             | (0.04     | )                                             | $ | (0.04                                        | ) | $                                            | (0.16    
|                                                                         |                                               |           |                                               |   |                                              |   |                                              |          
|Weighted average number of common
shares outstanding  basic and diluted |                                               | 5,950,000 |                                               |   | 5,828,933                                    |   |                                              | 5,950,000



See accompanying notes to the condensed consolidated financial statements



4



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Index



TEDA TRAVEL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                                          | For the Nine
Months Ended
September 30,
2003 |            | For the Nine
Months Ended
September 30,
2003 |  
|----------------------------------------------------------------------------------------- | -------------------------------------------- | ---------- | -------------------------------------------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                     |                                              |            |                                              |  
|Net loss                                                                                  | $                                            | (966,680   | )                                            | $
|Adjustments to reconcile net loss to net cash (used in)
provided by operating activities: |                                              |            |                                              |  
|Depreciation and amortization                                                             |                                              | 3,638      |                                              |  
|Stock issued for services                                                                 |                                              |           |                                              |  
|Equity in loss of affiliate                                                               |                                              | 805,311    |                                              |  
|Increase (decrease) in:                                                                   |                                              |            |                                              |  
|Accounts receivable                                                                       |                                              | (75,994    | )                                            |  
|Prepaid expenses                                                                          |                                              | (23,930    | )                                            |  
|(Decrease) increase in:                                                                   |                                              |            |                                              |  
|Accounts payable and accrued expenses                                                     |                                              | 4,696      |                                              |  
|Due to related parties                                                                    |                                              | (358       | )                                            |  
|Net Cash (Used In) Provided By Operating Activities                                       |                                              | (253,317   | )                                            |  
|                                                                                          |                                              |            |                                              |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                     |                                              |            |                                              |  
|Purchase of property and equipment                                                        |                                              | (8,745     | )                                            |  
|Investment in affiliate                                                                   |                                              | (3,386,551 | )                                            |  
|Due from directors                                                                        |                                              | 6,659      |                                              |  
|Net Cash Used In Investing Activities                                                     |                                              | (3,388,637 | )                                            |  
|                                                                                          |                                              |            |                                              |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                     |                                              |            |                                              |  
|Proceeds from issuance of common stock                                                    |                                              |           |                                              |  
|Proceeds from convertible note payable  stockholder                                      |                                              | 3,350,000  |                                              |  
|Net Cash Provided By Financing Activities                                                 |                                              | 3,350,000  |                                              |  
|                                                                                          |                                              |            |                                              |  
|DECREASE IN CASH                                                                          |                                              | (291,954   | )                                            |  
|                                                                                          |                                              |            |                                              |  
|CASH  BEGINNING OF PERIOD                                                                |                                              | 323,283    |                                              |  
|                                                                                          |                                              |            |                                              |  
|CASH  END OF PERIOD                                                                      | $                                            | 31,329     |                                              | $



See accompanying notes to the condensed consolidated financial statements



5



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Index



TEDA TRAVEL INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2003

(UNAUDITED)



NOTE 1

BASIS OF PRESENTATION



The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position and results of operations.



It is management's opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.



For further information, refer to the consolidated financial statements and footnotes included in the Company's Form 10-KSB filed on April 15, 2003.



NOTE 2

PRINCIPLES OF CONSOLIDATION



The accompanying condensed consolidated financial statements include the accounts of Teda Travel Incorporated and its wholly owned subsidiaries, Teda Hotels Management Company Limited and Teda Hotels Management Limited (the "Company"). All significant inter-company transactions and balances have been eliminated in consolidation.



NOTE 3

INVESTMENT IN AFFILIATE



On January 6, 2002, the Company acquired a 35% interest in a real estate joint venture located in China. The joint venture was formed to develop and manage a mixed-use complex of apartments, restaurants, a hotel and a private clubhouse. The joint venture was formed with a maximum life of 50 years. The joint venture partner is also a 20% stockholder of the Company.



A summary of the unaudited condensed financial statements of the affiliate under Hong Kong GAAP and a reconciliation to U.S. GAAP as of September 30, 2003 is as follows:







|                   | Hong Kong
GAAP |            | U.S. GAAP
Adjustments |   |          | U.S. GAAP |  
|------------------ | -------------- | ---------- | --------------------- | - | -------- | --------- | -
|                   |                |            |                       |   |          |           |  
|Current assets     | $              | 13,276,556 |                       | $ |         |           | $
|Non-current assets |                | 30,145,784 |                       |   | (958,237 | )         |  
|                   |                |            |                       |   |          |           |  
|Total Assets       | $              | 43,422,340 |                       | $ | (958,237 | )         | $

6



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Index



TEDA TRAVEL INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2003

(UNAUDITED)



|                                           | Hong Kong
GAAP |            | U.S. GAAP
Adjustments |   | U.S. GAAP |  
|------------------------------------------ | -------------- | ---------- | --------------------- | - | --------- | -
|Current liabilities                        | $              | 29,600,319 |                       | $ |          |  
|Non-current liabilities                    |                | 4,837,929  |                       |   |          |  
|Stockholders' equity                       |                | 8,984,092  |                       |   | (958,23   | )
|                                           |                |            |                       |   |           |  
|Total Liabilities and Stockholders Equity | $              | 43,422,340 |                       | $ | (958,237  | )
|                                           |                |            |                       |   |           |  
|Revenues                                   | $              | 6,673,825  |                       | $ |          |  
|                                           |                |            |                       |   |           |  
|Operating profit/(loss)                    |                | 340,435    |                       |   | (633,297  | )
|                                           |                |            |                       |   |           |  
|Net Loss                                   | $              | (1,667,590 | )                     | $ | (633,297  | )





The Company's share of the loss of the affiliate for the nine months ended September 30, 2003 after accounting for differences between Hong Kong GAAP and U.S. GAAP was $805,311.



NOTE 4

RELATED PARTY TRANSACTIONS



During nine months ended September 30, 2003 and 2002, the Company received management revenue of $217,898 and $163,275, respectively, from two properties it manages that are owned by a shareholder. During the three months ended September 30, 2003 and 2002, the Company received management revenue of $112,020 and $50,684, respectively, from two properties it manages that are owned by a shareholder.



As of September 30, 2003, accounts receivable included amounts due from related parties aggregating $237,864.



During the nine months ended September 30, 2003 and 2002, the Company paid $23,077 and $55,912, respectively, to a director and stockholder for consulting and professional services. During the three months ended September 30, 2003 and 2002, the Company paid $7,692 and $40,528, respectively, to a director and stockholder for consulting and professional services.



During the nine months ended September 30, 2003, the Company paid rent of $23,182 for office space leased from a director and stockholder.



Also see Notes 3, 5 and 7.





7



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TEDA TRAVEL INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2003

(UNAUDITED)



NOTE 5

CONVERTIBLE NOTE PAYABLE - STOCKHOLDER



During February 2003, the Company issued a $3.5 million, which was subsequently reduced to $3.35 million on July 3, 2003, 2% Convertible Note Payable to its major shareholder in order to fund its joint venture commitment. The outstanding balance of the note and accrued interest automatically convert into 7,000,000 shares of common stock on February 23, 2004 unless paid in full prior to the maturity date. The Company determined that there was no beneficial conversion amount associated with the note based on the fair value of the Company's common stock on the date of grant. On July 11 2003, the Company received the final payment in the amount of $2,157,692 on the convertible note payable.



NOTE 6

BUSINESS SEGMENTS



The Company has two operating segments. Each segment operates exclusively in Asia. The Company's Property Management segment provides management services to hotels and resorts in Asia. The Real Estate Investment segment invests in real estate development projects. The accounting policies of the segments are the same as described in the summary of significant accounting policies. There are no inter-segment sales.



The following table summarizes segment information for the nine months ended September 30, 2003 and 2002:



|2003                 | Property
Management |          | Real Estate
Investments |   | Total     |  
|-------------------- | ------------------- | -------- | ----------------------- | - | --------- | -
|                     |                     |          |                         |   |           |  
|Revenue              | $                   | 271,353  |                         | $ |          |  
|                     |                     |          |                         |   |           |  
|(Loss) before taxes  |                     | (145,436 | )                       |   | (805,311  | )
|                     |                     |          |                         |   |           |  
|Depreciation         |                     | 3,638    |                         |   |          |  
|                     |                     |          |                         |   |           |  
|Assets               |                     | 319,210  |                         |   | 2,805,149 |  
|                     |                     |          |                         |   |           |  
|Capital Expenditures |                     | 8,745    |                         |   |          |  
|                     |                     |          |                         |   |           |  
|2002                 | Property
Management |          | Real Estate
Investments |   | Total     |  
|                     |                     |          |                         |   |           |  
|Revenue              | $                   | 376,488  |                         | $ |          |  
|                     |                     |          |                         |   |           |  
|Income before taxes  |                     | 99,027   |                         |   | (209,044  | )
|                     |                     |          |                         |   |           |  
|Depreciation         |                     | 1,840    |                         |   |          |  
|                     |                     |          |                         |   |           |  
|Assets               |                     | 474,400  |                         |   | 3,177,507 |  
|                     |                     |          |                         |   |           |  
|Capital Expenditures |                     | 846      |                         |   |          |  







8



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Index



Item 2.  Management's Discussion and Analysis or Plan of Operation.



Cautionary Statements



The following discussion and analysis should be read in conjunction with the Companys Consolidated Financial Statements and the Notes thereto included in Part I, Item 1 of this Report.  All amounts are expressed in U.S. dollars.



The following discussion regarding the Company and its business and operations contains forward-looking statements within the meaning of Private Securities Litigation Reform Act 1995.  These statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as may, expect, anticipate, estimate or continue or the negative thereof or other variations thereon or comparable terminology.  The reader is cautioned that all forward-looking statements are necessarily speculative and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward looking statements, including the risk factors discussed in the Companys Annual Report on Form 10-KSB, as filed with the United States Securities and Exchange Commission on April 15, 2003.  For more information about said risk factors, please see the section entitled Risk Factors within Item 6, Managements Discussion and Analysis of Financial Condition and Results of Operation, in the Companys Annual Report on Form 10-KSB, as filed with the United States Securities and Exchange Commission on April 15, 2003.  The Company does not have a policy of updating or revising forward-looking statements and thus it should not be assumed that silence by management of the Company over time means that actual events are bearing out as estimated in such forward-looking statements.



Overview



The Company, formerly known Gaige Financial Group, Inc., is a Florida corporation incorporated on December 6, 1999.  Effective July 12, 2002, the Company issued 5,000,000 shares of its common stock to the shareholders of Teda Hotels Management Company Limited, a British Virgin Islands corporation (Teda BVI), in exchange for all of the shares of capital stock of Teda BVI.



Prior to the merger, the Company had no material operations.  The merger was accounted for as a recapitalization of Teda BVI, as the shareholders of Teda BVI acquired capital stock of the Company in a reverse acquisition.  Accordingly, the assets and liabilities of Teda BVI were recorded at historical cost, and the shares of common stock issued by the Company were reflected in the consolidated financial statements with retroactive effect, as if the Company had been the parent company from inception.



The Company primarily earns its revenues through the provision of management services, including training and consulting services, to hotels and resorts in the Peoples Republic of China through its wholly-owned operating subsidiary, Teda BVI, as well as through the wholly-owned operating subsidiary of Teda BVI, Teda Hotels Management Limited, a Hong Kong corporation.



Revenues derived from the Companys provision of management services to hotels and resorts include management fees and incentive fees from the properties that it manages, pursuant to the terms and conditions of its management contracts.  Each of the hotels and resorts is managed under a ten-year management contract, commencing from as early as September 2000.  As of September 30, 2003, the Company has four management contracts, encompassing an aggregate of 705 rooms located in four hotel and resort properties.  All four of the hotel and resort properties are located within the Peoples Republic of China, of which two are in Tianjin, one is in Xian and one is in Shenzhen.



Under its management contracts with each of the four hotel and resort properties, the Company is responsible for the supervision and day-to-day operations of the property in exchange for a basic management fee based on gross revenues.  In addition, the Company may also earn an incentive fee based upon net operating profits of the property managed.



Based upon the entry of the World Trade Organization by the Peoples Republic of China in 2000, as well as the hosting of the Olympics in Beijing in 2008, the Company anticipates tremendous opportunities in the travel

9



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Index



markets of the Peoples Republic of China.  Management of the Company plans to diversify the Companys business through acquiring new properties and/or entering new travel business sectors such as travel agencies.



The Company is also an investor in real estate development projects in Asia. In January 2002, the Company acquired a 35% interest in a real estate joint venture by the name of Tianjin Yide Real Estate Company Limited.  The Companys co-venturer is a real estate developer by the name of Tianjin Teda International Hotels Development Company Limited, a corporation owned by the Tianjin provincial government and formed under the laws of the Peoples Republic of China.  Through the real estate joint venture, the Company owns a multi-use complex featuring apartment units for sale, as well as a hotel and clubhouse.



For more information about the Companys business and real estate joint venture, please see Item 1, Business, and Item 2, Properties, respectively, in the Companys Annual Report on Form 10-KSB, as filed with the United States Securities and Exchange Commission on April 15, 2003.



Recent Developments



During the quarter ended September 30, 2003, the real estate joint venture made two investments totaling $6,556,916.  The first investment of $25,711 was for a 10% equity share in Tianjin Yixin Construction Project Management Co. Ltd., a Sino-Foreign joint venture established in Tianjin, Peoples Republic of China (Yixin).  Yixin is engaged in construction management.  The second, more significant, investment of $6,531,205 was for a 30% equity share in a new joint venture, Teda Investment Ltd., which has a 50% equity share in a proposed land development project involving approximately 1,155 acres in the Shunyi District of Beijing, Peoples Republic of China.  The proposed land development project has been approved by the provincial government and it is expected that land acquisition and development shall commence during the first quarter of 2004.  The development of this project is expected to be financed principally by bank loans.



Consolidated Results of Operations



For the quarterly periods ended September 30, 2003 and September 30, 2002



Revenues.  Revenues for the quarter ended September 30, 2003 were $127,123 as compared to revenues of $134,247 for the same quarter last year, a decrease of $7,124 or 5.3%.  The drop in revenue was primarily due to the suspension of operations at the hotel in Xian managed by the Company.  Revenue for the quarter, however, showed a substantial increase over the previous quarter which was affected by the SARS epidemic.



For the quarter ended September 30, 2003 and 2002, the Company received $112,020 and $50,684 which accounted for 88% and  38%, respectively, of the Companys revenues and which amounts were derived from two properties managed by the Company that are owned by the Companys real estate joint venture partner.



Management Fees (Consulting Fee).  Management fees for the quarter ended September 30, 2003 were $7,692 as compared to $40,528 for the quarter ended September 30, 2002, a decrease of $32,836 or 81%. The decrease was due to the termination of one consultancy agreement in December 2002.



Other Selling, G&A expenses.  Other selling, G&A expenses for the quarter ended September 30, 2003 were $82,392 as compared to $56,853 for the quarter ended September 30, 2002, an increase of $25,539 or 45%.  The increase in Other Selling, G&A is due to the implementation of procedures to satisfy the Companys reporting requirements pursuant to the Securities Exchange Act 1934, as well as the additional operating cost of an office in Shenzhen, PRC established by the Company in March 2003 for purposes of business development and property management in China.



Income (Loss) from Operations.  The Company recorded a loss of $11,702 from operations for the quarter ended September 30, 2003 as compared to income of $5,208 for the quarter ended September 30, 2002.  The loss from operations is due largely to an increase in expenses as outlined above.



Equity in loss of affiliate.  The Company recorded an equity loss in affiliate of $247,528 for the quarter ended September 30, 2003 as compared to a loss of $209,044 for the quarter ended September 30, 2002.  The equity

10



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Index



loss for the quarter ended September 30, 2002 was due to pre-opening expenses incurred by hotel operations.  The equity loss for the quarter ended September 30, 2003 was largely attributed to share of financial expenses of $196,887, depreciation expenses on the hotel building of $83,846, and loss in operations of $247,527 offset by revenue on the sale of properties of $731,737.  Loss in operations was due to higher interest charges incurred on additional borrowings by the affiliate during the quarter ended September 30, 2003 for new investments as described in the Recent Developments section above.



Income tax.  The Company derives its hotel management income in the Peoples Republic of China and is subject to income tax in the Peoples Republic of China depending upon the province in which a particular hotel is located as and when the balance is remitted out of the country.  Income tax expenses the Company charged to the consolidated income statement for quarter ended September 30, 2003 were $8,025 as compared to $6,554 for the period ended September 30, 2002, an increase of $1,471 or 22%.



Net Income (Loss).  The Company recorded a net loss of $267,252 as compared to a net loss of $210,314 for the same quarter last year. The net loss situation is due largely to the share of an equity loss in affiliate of $247,528 for the quarter ended September 30, 2003 as compared to $209,044 for the quarter ended September 30, 2002, as mentioned above.



For nine months ended September 30, 2003 and September 30,2002



Revenues. Revenues for the nine months ended September 30, 2003 were $271,353 as compared to revenues of $376,488 for the same period last year, a decrease of $105,135 or 28%. The decrease in revenue was mainly due to the outbreak of the SARS epidemic affecting the first six months of the year. As the SARS epidemic was brought under control, revenues from the hotel management business have recovered since the third quarter of 2003.



For the nine months ended September 30, 2003 and 2002, the Company received $217,898 and $163,275 which amounts accounted for 80% and 43%, respectively, of the Companys revenues and which amounts were derived from two properties managed by the Company that are owned by the Companys real estate joint venture partner.



Management Fees (Consulting Fee) Management fees for the nine months ended September 30, 2003 were $23,077 as compared to $55,912 for the nine months ended September 30, 2002, a decrease of $32,835 or 59%. The decrease was due to the termination of a consultancy agreement in December 2002.



Other Selling, G&A expenses. Other selling, G&A expenses for the nine months ended September 30, 2003 were $249,375 as compared to $124,401, an increase of $124,974 or 100%. The increase is due to the implementation of procedures to satisfy the Companys reporting requirements pursuant to the Securities Exchange Act of 1934, as well as additional operating expenses for an office in Shenzhen, PRC established by the Company in March 2003 for purposes of business development and property management in China.



Income (Loss) from Operations.The Company recorded a loss of $145,475 for the nine months ended September 30, 2003 as compared to an income of $98,793. The loss from operations is due largely to a decrease in revenues as a result of the outbreak of SARS and an increase in expenses as stated above.



Equity in loss of affiliate.  The Company recorded an equity loss in affiliate of $805,311 for the nine months ended September 30, 2003 as compared to $209,044 for the nine months ended September 30, 2002. The equity loss for the nine months ended September 30, 2002 was due to pre-opening expenses incurred by the Hotel operations.  The equity loss for the nine months ended September 30, 2003 was largely attributed to share of financial expenses of $363,901, depreciation expenses on the Hotel building of $221,654, loss in operations of $805,310 offset by revenue from the sale of properties of $1,411,736.  Loss in operations was due to higher interest charges incurred on additional borrowings by the affiliate during the quarter ended September 30, 2003 for new investments as described in the Recent Developments section above.



11



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Income tax.  Income tax expenses the Company charged to the consolidated income statement for the nine months ended September 30, 2003 were $15,933 as compared to $17,501 for the nine months ended September 30, 2002, a decrease of $1,568 or 9%.



Net Income (Loss).  The Company recorded a net loss of $966,680 for the nine months ended September 30, 2003 as compared to a net loss of $127,518 for the same period last year. The net loss situation is due to the decline in revenues from the property management business and recording of an increased equity loss in affiliate by $596,267 for the nine months ended September 30, 2003, as mentioned above.



Consolidated Financial Condition



Liquidity and Capital Resources  September 30, 2003



Operating.  For the nine months period ended September 30, 2003, the Groups operations utilized cash resources of $253,317 as compared to providing cash of $87,355 for the period ended September 30, 2002, an increase of $340,672.  The significant increase in cash utilization for the period was first due to a net loss of $966,680 incurred for the nine months ended September 30, 2003, compared to $127,518 for that of 2002.



As of September 30, 2003, total current assets were $310,597 and consisted primarily of $31,329 in cash and $252,449 in accounts receivable, total current liabilities were $3,444,568 leaving a working capital deficit of $3,133,971. The deficit was mainly attributable to a short term obligation of $3,350,000 in relation to the issuance of a convertible note to a major shareholder.



Investing and financing.  During the nine months period ended September 30, 2003, addition to property, plant and equipment amounted to $8,745.  In addition, the Company paid $3,386,551 to fulfill the capital commitment to an affiliate.  The commitment has been financed by the issuance of a $3.35 million convertible promissory note to a major shareholder.  The Note will automatically convert into 7,000,000 shares of the Companys common stock on February 23, 2004 unless paid in full prior to the said date.  As of September 30, 2003, the Company received all of the proceeds from the convertible promissory note, and all of said proceeds were used to fulfill the capital commitment to the affiliate.



Item 3.  Controls and Procedures.



The Companys senior management team, led by Chief Executive Officer Godfrey Hui Chin Tong and Chief Financial Officer Peter Mak, after evaluating the effectiveness of the Companys disclosure controls and procedures as of the end of the period covered by this quarterly report, has concluded that said disclosure controls and procedures are adequate to ensure that the information required to be disclosed by the Company in the reports that it files or submits pursuant to the requirements of the Securities Exchange Act of 1934 is (a) recorded, processed, summarized and reported within the prescribed time periods, and (b) accumulated and communicated to the Companys senior management team as appropriate to allow timely decisions regarding required disclosures.





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Index



PART II - OTHER INFORMATION



Item 6.  Exhibits and Reports on Form 8-K.



(a)

See Exhibit Index.



(b)

Reports on Form 8-K: On August 20, 2003, the Company filed a Current Report on Form 8-K dated January 6, 2002, for the purpose of providing audited financial statements for its real estate joint venture as required by Item 310(c)(1) of Regulation S-B.



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Index



SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.





TEDA TRAVEL INCORPORATED



Dated: November 14, 2003

By:/s/ GODFREYHUICHINTONG

Godfrey Hui Chin Tong

Chief Executive Officer



Dated: November 14, 2003

By:/s/ PETERMAK

Peter Mak

Chief Financial Officer









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Index



EXHIBIT INDEX



|Exhibit No. |  | Description                                                                                                                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                                                                                                   
|2.1         |  | Stock Purchase Agreement and Share Exchange dated as of May 1, 2002, by and among
Gaige Financial Group, Inc. and Teda Hotels Management Company Limited. (1)                                                                     
|2.2         |  | Amendment to Stock Purchase Agreement and Share Exchange dated as of August 15, 2002
by and among Gaige Financial Group, Inc. and Teda Hotels Management Company Limited. (2)                                                     
|3.1         |  | Articles of Incorporation (3)                                                                                                                                                                                                     
|3.2         |  | Amendment to Articles of Incorporation filed July 19, 2002(4)                                                                                                                                                                     
|3.3         |  | Bylaws (3)                                                                                                                                                                                                                        
|4.1         |  | Specimen Certificate of Common Stock (3)                                                                                                                                                                                          
|4.2         |  | 2% Convertible Promissory Note to Magnolia Group Holdings Limited dated February 21, 2003 (5)                                                                                                                                     
|4.3         |  | Amendment to Convertible Promissory Note to Magnolia Group Holdings Limited dated July 3, 2003*                                                                                                                                   
|10.1        |  | Joint Venture Contract for Tianjin Yide Real Estate Company Limited dated October 28, 1999,
with Amendment dated January 6, 2002 and Share Transfer Agreement dated January 6, 2002
(EACH AS TRANSLATED FROM ORIGINAL CHINESE) (5)
|10.2        |  | Management Agreement for Yangling Horizon Hotel dated September 2, 2000
(AS TRANSLATED FROM ORIGINAL CHINESE) (5)                                                                                                                 
|10.3        |  | Management Agreement for Shenzhen Kindlion Hotel dated October 18, 2000
(AS TRANSLATED FROM ORIGINAL CHINESE) (5)                                                                                                                 
|10.4        |  | Management Agreement for Tianjin International Club and Hotel dated June 29, 2001
(AS TRANSLATED FROM ORIGINAL CHINESE) (5)                                                                                                       
|10.5        |  | Management Agreement for Teda International Club Tianjin dated April 29, 2002
(AS TRANSLATED FROM ORIGINAL CHINESE) (5)                                                                                                           
|21.1        |  | Subsidiaries of the Registrant (4)                                                                                                                                                                                                
|31.1        |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                                                                                               
|31.2        |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                                                                                               
|32.1        |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                                                                                                                               
|32.2        |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*                                                                                                                               



*

Filed herewith.



(1)

Incorporated by reference to the Registrants Current Report on Form 8-K dated May 1, 2002.



(2)

Incorporated by reference to the Registrants Current Report on Form 8-K dated August 15, 2002.



(3)

Incorporated by reference to the Registrants Registration Statement on Form 10-SB filed January 24, 2000.



(4)

Incorporated by reference to the Registrants Annual Report on Form 10-KSB filed April 15, 2003.



(5)

Incorporated by reference to the Registrants Quarterly Report on Form 10-QSB filed May 20, 2003.



(6)

Incorporated by reference to the Registrants Quarterly Report on Form 10-QSB filed August 19, 2003.