UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB
                     [x] REPORT UNDER SECTION 13 OR 15(d) OF
                         THE SECURITIES EXCHANGE ACT OF

                                      1934

                         For the quarterly period ended
                                 March 31, 2005

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             For the transition period from __________ to __________

                        Commission File Number 000-32585

                   SUNRISE REAL ESTATE DEVELOPMENT GROUP, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


            TEXAS                                           75-2713701
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                      Suite 1502, No.333 ,Zhaojiabang Road
                                  Shanghai, PRC
          (Address of principal executive offices, including zip code.)

86 (21) 64220505
(Registrant's telephone number, including area code)

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 [ ]

Issuers involved in Bankruptcy Proceedings during the past Five Years.
Not Applicable.

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable date: May 15, 2005 - 21,636,614 shares of
Common Stock

Transitional Small Business Issuer Format Yes [ ] No [X]


                                       1
<PAGE>

                                   FORM 10-QSB

                      For the Quarter Ended March 31, 2005

                                      INDEX

                                                                            Page
PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements..................................................3
Item 2.  Management's Discussion and Analysis.................................17
Item 3.  Controls and Procedures..............................................23

PART II. OTHER INFORMATION
Item 1.  Legal Proceedings....................................................24
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds..........24
Item 3.  Defaults Upon Senior Securities......................................24
Item 4.  Submission of Matters to a Vote of Security Holders..................24
Item 5.  Other Information....................................................24
Item 6.  Exhibits.............................................................24


SIGNATURES....................................................................26











                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS











                                       3
<PAGE>

                   Sunrise Real Estate Development Group, Inc.

                           Consolidated Balance Sheets

(Expressed in US Dollars)
                                                     March 31,    December 31,
                                                       2005           2004
                                                   ------------   ------------
                                                           (Unaudited)
                                                   ---------------------------
ASSETS

Current assets
  Cash and cash equivalents                        $  1,327,119   $    969,913
  Accounts receivable                                 1,051,917      2,280,172
  Promissory deposits (Note 3)                        2,784,994      2,784,994
  Other receivables and deposits (Note 4)               307,312        362,586
                                                   ------------   ------------

  Total current assets                                5,471,342      6,397,665

Plant and equipment - net (Note 5)                      582,927        596,685
Deposits for acquisitions of properties (Note 6)      1,480,036      1,480,036
Goodwill                                                183,029        183,029
                                                   ------------   ------------

Total assets                                       $  7,717,334   $  8,657,415
                                                   ============   ============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Bank loan (Note 7)                               $    266,362   $    276,084
  Promissory note payable (Note 8)                    1,000,000      1,000,000
  Accounts payable                                       31,589        193,762
  Venture deposits (Note 9)                             972,633        972,633
  Amount due to director (Note 10)                       59,180         59,167
  Other payables and accrued expenses (Note 11)         452,041      1,620,980
  Other tax payable (Note 12)                            10,831        114,747
  Income tax payable                                     97,541         56,575
                                                   ------------   ------------

  Total current liabilities                           2,890,177      4,293,948
                                                   ------------   ------------

Commitments and contingencies (Note 13)                    --             --

Long-term bank loan (Note 7)                          1,149,478      1,203,952

Minority interest                                        26,789          3,948

Stockholders' equity
  Common stock, par value $0.01 per share;
    200,000,000 shares authorized; 21,636,614
    shares issued and outstanding                       216,366        216,366
  Additional paid-in capital                          2,233,844      2,233,844
  Statutory reserve (Note 14)                           175,004        175,004
  Retained earnings                                   1,025,676        530,353
                                                   ------------   ------------

  Total stockholders' equity                          3,650,890      3,155,567
                                                   ------------   ------------

Total liabilities and stockholders' equity         $  7,717,334   $  8,657,415
                                                   ============   ============

See accompanying notes to unaudited consolidated condensed financial statements.


                                       4
<PAGE>

                   Sunrise Real Estate Development Group, Inc.

                      Consolidated Statements of Operations

(Expressed in US Dollars)



                                                      Three Months Ended
                                                           March 31,
                                                     2005            2004
                                                 ------------    ------------
                                                          (Unaudited)
                                                 ----------------------------


Net revenue                                      $  1,864,589    $  1,214,474

Cost of revenue                                      (398,589)       (490,149)
                                                 ------------    ------------

Gross profit                                        1,466,000         724,325

Operating expenses                                   (314,443)       (231,630)

General and administrative expenses                  (557,937)       (325,362)
                                                 ------------    ------------

Operating profit                                      593,620         167,333

Interest income                                         1,365           2,695

Other income, net                                         173           4,567

Finance expenses                                      (33,663)           --
                                                 ------------    ------------

Profit before income tax and minority interest        561,495         174,595

Income tax                                            (55,413)        (14,478)
                                                 ------------    ------------

Profit before minority interest                       506,082         160,117

Minority interest                                     (10,759)           --
                                                 ------------    ------------

Net profit                                       $    495,323    $    160,117
                                                 ============    ============

Earnings per share - basic and diluted           $       0.02    $       0.01
                                                 ============    ============

Weighted average common shares outstanding
    - basic and diluted                            21,636,614      15,000,000
                                                 ============    ============




See accompanying notes to unaudited consolidated condensed financial statements.


                                       5
<PAGE>
<TABLE>
<CAPTION>

                   Sunrise Real Estate Development Group, Inc.

                      Consolidated Statements of Cash Flows
                Increase/(Decrease) in Cash and Cash Equivalents

(Expressed in US Dollars)
                                                           Three Months Ended
                                                                March 31,
                                                           2005           2004
                                                       -----------    -----------
                                                               (Unaudited)
                                                       --------------------------
<S>                                                    <C>            <C>
Cash flows from operating activities
  Net income                                           $   495,323    $   160,117
      Adjustments to reconcile net income to
         net cash provided by operating activities
      Depreciation of plant and equipment                   31,185         10,612
      Minority interest                                     10,759           --
      Change in:
        Accounts receivable                              1,228,255        211,527
        Other receivables and deposits                      55,274     (1,519,021)
        Accounts payable                                  (162,173)      (108,894)
        Other payables and accrued expenses             (1,168,939)       526,051
        Other tax payable                                 (103,916)        (4,769)
        Income tax payable                                  40,966        (99,097)
                                                       -----------    -----------

Net cash provided by operating activities                  426,734        823,474
                                                       -----------    -----------

Cash flows from investing activities
   Acquisition of plant and equipment                      (17,427)       (58,811)
                                                       -----------    -----------

Net cash used in investing activities                      (17,427)       (58,811)
                                                       -----------    -----------

Cash flows from financing activities
   Bank loan repayment                                     (64,196)          --
   Capital contribution from minority interest              12,082           --
   Recapitalization of LRY                                    --        1,000,000
   Dividends paid                                             --         (543,708)
   Advances from director                                       13           --
                                                       -----------    -----------

Net cash (used in)/provided by financing activities        (52,101)       456,292
                                                       -----------    -----------

Net increase/(decrease) in cash and cash equivalents       357,206       (425,993)

Cash and cash equivalents at beginning of year             969,913      1,279,759
                                                       -----------    -----------

Cash and cash equivalents at end of year               $ 1,327,119    $   853,766
                                                       ===========    ===========

Supplemental disclosure of cash flow information
     Cash paid during the year:
     Income tax paid                                        14,447        113,575

     Interest paid                                          21,334           --
</TABLE>


See accompanying notes to unaudited consolidated condensed financial statements.


                                       6
<PAGE>

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Sunrise Real Estate Development  Group, Inc.  ("CY-SRRE") was established in the
Cayman  Islands on April 30, 2004 as a limited  liability  company.  CY-SRRE was
wholly owned by Ace Develop  Properties  Limited ("Ace  Develop"),  of which Lin
Chi-Jung, an individual, is the principal and controlling shareholder.  Shanghai
Xin Ji Yang Real Estate  Consultation  Company Limited ("SHXJY") was established
in the  People's  Republic  of China (the "PRC") on August 14, 2001 as a limited
liability company.  SHXJY was originally owned by a Taiwanese company,  of which
the principal and controlling shareholder was Lin Chi-Jung. On June 8, 2004, all
the fully paid up capital of SHXJY was transferred to CY-SRRE.  On June 25, 2004
SHXJY and two individuals  established a subsidiary,  namely, Suzhou Xin Ji Yang
Real Estate  Consultation  Company Limited ("SZXJY") in the PRC. SHXJY holds 90%
of equity interest in SZXJY. On December 24, 2004,  SHXJY acquired 85% of equity
interest  in  Beijing  Xin Ji Yang  Real  Estate  Consultation  Company  Limited
("BJXJY"), a PRC company incorporated on April 16, 2003 with limited liability.

LIN RAY YANG  Enterprise  Ltd.  ("LRY") was  established  in the British  Virgin
Islands on November 13, 2003 as a limited  liability  company.  LRY was owned by
Ace  Develop,  Planet  Technology  Corporation  ("Planet  Tech")  and  Systems &
Technology  Corporation ("Systems Tech"). On February 5, 2004, LRY established a
wholly owned subsidiary,  Shanghai Shang Yang Real Estate  Consultation  Company
Limited  ("SHSY")  in the  People's  Republic  of China (the "PRC") as a limited
liability company.  On January 10, 2005, LRY and a PRC third party established a
subsidiary,  namely,  Suzhou Gao Feng Hui Property  Management  Company  Limited
("SZGFH") in the PRC. LRY holds 80% of equity interest in SZGFH.

SHXJY, SZXJY, BJXJY, SHSY and SZGFH commenced  operations in November 2001, June
2004, January 2004,  February 2004 and January 2005 respectively.  Each of SXJY,
SZXJY,  BJXJY,  SHSY and SZGFH has been granted a twenty years operation  period
which can be extended with  approvals from relevant PRC  authorities.  On August
31, 2004, Sunrise Real Estate Development Group, Inc. ("SRRE"),  CY-SRRE and Lin
Chi-Jung,  an individual  and agent for the  beneficial  shareholder of CY-SRRE,
i.e. Ace Develop,  entered into an exchange  agreement that SRRE issue 5,000,000
shares  of common  stock to the  beneficial  shareholder  or its  designees,  in
exchange for all  outstanding  capital  stock of CY-SRRE.  The  transaction  was
closed on October 5, 2004. Lin Chi-Jung is Chairman of the Board of Directors of
SRRE, the President of CY-SRRE and the principal and controlling  shareholder of
Ace Develop.

On August 31, 2004,  SRRE,  LRY and Lin Chi-Jung,  an  individual  and agent for
beneficial  shareholders of LRY, i.e. Ace Develop, Planet Tech and Systems Tech,
entered into an exchange  agreement that SRRE issue 10,000,000  shares of common
stock to the beneficial  shareholders,  or their designees,  in exchange for all
outstanding capital stock of LRY. The transaction was closed on October 5, 2004.
Lin Chi-Jung is Chairman of the Board of Directors of SRRE, the President of LRY


                                       7
<PAGE>

NOTE 1 - ORGANIZATION AND DESCRIPTIONOF BUSINESS - Continued

and the  principal and  controlling  shareholder  of Ace Develop.  Regarding the
10,000,000 shares of common stock of SRRE issued in this transaction,  8,500,000
shares were issued to Ace Develop, 750,000 shares were issued to Planet Tech and
750,000 shares were issued to Systems Tech.

As a result of the  acquisition,  the former  owners of  CY-SRRE  and LRY hold a
majority  interest  in  the  combined  entity.   Generally  accepted  accounting
principles  require in certain  circumstances  that a company whose stockholders
retain the majority  voting  interest in the combined  business to be treated as
the acquirer for financial reporting purposes.  Accordingly, the acquisition has
been accounted for as a "reverse  acquisition"  arrangement  whereby CY-SRRE and
LRY are deemed to have purchased  SRRE.  However,  SRRE remains the legal entity
and the Registrant for Securities and Exchange  Commission  reporting  purposes.
The  historical  financial  statements  prior to  October  5,  2004 are those of
CY-SRRE and LRY and their  subsidiaries.  All shares and per share data prior to
the  acquisition  have  been  restated  to  reflect  the  stock  issuance  as  a
recapitalization of CY-SRRE and LRY.

SRRE was initially  incorporated in Texas on October 10, 1996, under the name of
Parallax  Entertainment,  Inc.  ("Parallax").  On December  12,  2003,  Parallax
changed its name to Sunrise Real Estate Development Group, Inc.

SRRE and its subsidiaries,  namely,  CY-SRRE, LRY, SHXJY, SZXJY, BJXJY, SHSY and
SZGFH are collectively referred to as "the Company" hereafter.

The principal  activities of the Company are the provision of property brokerage
services, real estate marketing services, property leasing services and property
management services in Mainland China.

NOTE 2 - Basis of Presentation and SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated condensed financial data as of March 31,
2005 and  December  31, 2004 and for the three  months  ended March 31, 2005 and
2004 have been prepared by the Company  pursuant to the rules and regulations of
the  Securities  and  Exchange  Commission.  Certain  information  and  footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant to such rules and regulations.  However,  the Company believes that the
disclosures are adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the financial statements
and the  notes  thereto  included  in the  Company's  audited  annual  financial
statements for the year ended December 31, 2004.


                                       8
<PAGE>

NOTE 2 - Basis of Presentation and SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
Continued

The  preparation  of financial  statements in conformity  with general  accepted
accounting  principles  requires  management to make  estimates  that affect the
reported  amounts  of  assets,  liabilities,   revenues  and  expenses  and  the
disclosure of contingent  assets and  liabilities.  Actual  results could differ
from these estimates.

In the  opinion of  Management,  all  adjustments  (which  include  only  normal
recurring  adjustments) necessary to present fairly the financial position as of
March 31, 2005 and December 31, 2004,  results of operations  and cash flows for
the three months ended March 31, 2005 and 2004,  have been made.  The results of
operations  for  the  three  months  ended  March  31,  2005  and  2004  are not
necessarily indicative of the operating results for the full year.

Basis of Accounting and Principles of Consolidation

The consolidated  financial statements are prepared in accordance with generally
accepted  accounting  principals in the United States of America and present the
financial statements of SRRE and its subsidiaries,  CY-SRRE,  LRY, SHXJY, SZXJY,
BJXJY,  SHSY and SZGFH.  All  inter-company  transactions and balances have been
eliminated.

Foreign Currency Translation and Transactions

The  functional  currency  of  SRRE,  CY-SRRE  and LRY is US$ and the  financial
records  are  maintained  and the  financial  statements  prepared  in US$.  The
functional currency of SHXJY, SZXJY, BJXJY, SHSY and SZGFH is Renminbi (RMB) and
the financial  records are maintained and the financial  statements  prepared in
RMB.

Foreign  currency  transactions  during  the  period  are  translated  into each
company's  denominated  currency at the exchange rates ruling at the transaction
dates.  Gain and loss resulting from foreign currency  transactions are included
in the consolidated statement of operations.  Assets and liabilities denominated
in  foreign  currencies  at the  balance  sheet  date are  translated  into each
company's  denominated  currency  at period end  exchange  rates.  All  exchange
differences are dealt with in the consolidated statements of operations.

For the purpose of preparing the Company's  consolidated  financial  statements,
the financial  statements in RMB have been translated into United States Dollars
at US$1.00 = RMB8.28,  translation  adjustments would be included as a component
of stockholders' equity.

Exchange rate between US$ and RMB is fairly  stable during the years  presented.
The rates ruling as of March 31, 2005 and  December  31, 2004 are US$1:  RMB8.28
and US$1:  RMB8.28,  respectively.  Due to the stability of the exchange  rates,
there were no net adjustments in stockholders' equity.


                                       9
<PAGE>

NOTE 2 - Basis of Presentation and SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
Continued

Plant, Equipment and Depreciation

Plant and  equipment  are stated at cost.  Depreciation  is  computed  using the
straight-line  method  to  allocate  the  cost of  depreciable  assets  over the
estimated useful lives of the assets as follows:

                                                                Estimated Useful
                                                                 Life(in years)
                                                                ----------------

Furniture and fixtures                                                5-10
Computer and office equipment                                          5
Motor vehicles                                                         5

Maintenance, repairs and minor renewals are charged directly to the statement of
operations as incurred.  Additions and betterments are capitalized.  When assets
are  disposed  of, the related  cost and  accumulated  depreciation  thereon are
removed  from the  accounts  and any  resulting  gain or loss is included in the
statement of operations.

Use of Estimates

The preparation of financial  statements in accordance  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  reported  amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial  statements and the reported
amounts of revenue and expenses  during the  reporting  period.  Actual  results
could differ from those estimates.

Advertising Costs

All  advertising  costs  incurred in the promotion of the Company's  real estate
projects are expensed as incurred.

Revenue Recognition

Agency  commission  revenue from property  brokerage  and marketing  services is
recognised  when the property  developer and the buyer complete a property sales
transactions, which is normally at the time when the property developer receives
from the buyer a portion of the sales  proceeds in accordance  with the terms of
the relevant property sales agreement.

Revenue from  marketing  consultancy  services is  recognized  when services are
provided to clients.

Net Earnings per Common Share

The Company  computes net earnings  per share in  accordance  with SFAS No. 128,
"Earnings per Share".  Under the  provisions of SFAS No. 128, basic net earnings
per  share  is  computed  by  dividing  the net  earnings  available  to  common
shareholders  for the period by the weighted  average number of shares of common
stock outstanding during the period. The calculation of diluted net earnings per
share gives effect to common stock equivalents,  however, potential common stock
in the diluted EPS computation are excluded in net loss periods, as their effect
is anti-dilutive.


                                       10
<PAGE>

NOTE 2 - Basis of Presentation and SUMMARY OF SIGNIFICANT  ACCOUNTING POLICIES -
Continued

Income Taxes

The  Company  accounts  for  income  taxes  in  accordance  with  SFAS  No.  109
"Accounting for Income Taxes".  Under SFAS No. 109,  deferred tax liabilities or
assets at the end of each period are  determined  using the tax rate expected to
be in effect when taxes are actually paid or recovered. Valuation allowances are
established  when necessary to reduce deferred tax assets to the amount expected
to be realized.

Guarantees

The Company accounts for its liability for its obligations  under a guarantee in
accordance with FASB Interpretation No. 45, (FIN45)  Guarantor's  Accounting and
Disclosure   Requirements  for  Guarantees,   Including  Direct   Guarantees  of
Indebtedness of Others.  FIN 45 requires that  guarantors  recognize a liability
for certain  guarantees  at the fair value of the  guaranteed  obligation at the
inception of the  guarantee,  even if the  likelihood of  performance  under the
guarantee is remote. The initial  recognition and measurement  provisions of FIN
45 are applicable on a prospective  basis to guarantees issued or modified after
December  31,  2002.  See  Note  16 for  disclosures  related  to the  Company's
guarantees in accordance with FIN 45.


NOTE 3 - PROMISSORY DEPOSITS

The balance includes a promissory deposit of US$2,416,480  related to a property
underwriting agreement (the "Property  Underwriting  Agreement") entered into by
the Company  with a property  developer  in Suzhou,  the PRC.  According  to the
Property Underwriting Agreement, the Company acts as its sole distribution agent
for a commercial  building  under  development  in Suzhou (the "Suzhou  Property
Underwriting  Project");  and has placed the foregoing promissory deposit to the
property  developer  until all the properties  are sold within the  underwriting
period from September 26, 2004 to November 25, 2005.


NOTE 4 - OTHER RECEIVABLES AND DEPOSITS

                                      March 31,     December 31,
                                        2005            2004
                                    ------------    ------------
                                            (Unaudited)
                                    ------------    ------------

Other receivables                   $    244,389    $    291,199
Advances to staff                         13,610          21,699
Rental deposits                           49,313          49,688
                                    ------------    ------------

                                    $    307,312    $    362,586
                                    ============    ============


                                       11
<PAGE>

NOTE 5 - PLANT AND EQUIPMENT, NET

                                      March 31,     December 31,
                                        2005            2004
                                    ------------    ------------
                                            (Unaudited)
                                    ------------    ------------

Furniture and fixtures              $     50,924    $     50,924
Computer and office equipment            161,110         143,683
Motor vehicles                           519,645         519,645
                                    ------------    ------------

                                         731,679         714,252
Less: Accumulated depreciation          (148,752)       (117,567)
                                    ------------    ------------

                                    $    582,927    $    596,685
                                    ============    ============


NOTE 6 - DEPOSITS FOR ACQUISITIONS OF PROPERTIES

On November 18, 2004, the Company entered into sales and purchase  agreements to
acquire two floors of the Suzhou Property Underwriting Project mentioned in Note
3 above at a total  consideration  of $2.96 million for long-term  retention.  A
5-year  mortgage  loan (Note 7) of $1.48 million was borrowed from a bank to pay
for the  deposits in  December  2004.  The  remaining  balance of the  retention
deposit of $1.48 million will be payable in November  2005.  In accordance  with
the sales and purchase  agreements,  the properties  under  development  will be
completed on or before March 31, 2006.

NOTE 7 - BANK LOAN

The bank loan is a 5-year  loan bears  interest  at a rate of 0.4875% per month,
and the  maturity  date of the loan is  December  13,  2009.  The  bank  loan is
guaranteed  by the  developer  as  mentioned  in Note 3 above;  and will then be
secured by the properties once the title of the properties is transferred to the
Company.


NOTE 8 - PROMISSORY NOTE PAYABLE

The  amount is  unsecured  and bears  interest  at a rate of 5% per  annum.  The
promissory note will be repayable on December 31, 2005.




                                       12
<PAGE>

NOTE 9 - VENTURE DEPOSITS

The Company has entered into co-operation agreements with two venturers,  one of
them is an  independent  third  party;  the  other  one is one of the  Company's
directors,   Chang   Shu-Ching,   to  jointly  carry  out  the  Suzhou  Property
Underwriting  Project  mentioned in Note 3 above.  According to the co-operation
agreements,  the Company, Chang Shu-Ching and the other venturer are entitled to
share 65%,  10% and 25% of the net results of the Suzhou  Property  Underwriting
Project,  respectively.  Venture  deposits have been received from the venturers
and  will  not  be  repayable  until  the  completion  of  the  Suzhou  Property
Underwriting Project in November 2005.


NOTE 10 - RELATED PARTY

A related  party is an entity that can control or  significantly  influence  the
management  or  operating  policies  of another  entity to the extent one of the
entities may be prevented from pursuing its own  interests.  A related party may
also be any party the entity deals with that can exercise that control.

Amount due to director
----------------------
The Company,  from time to time,  receives from and repays to the director.  The
amount due to director does not bear any interest,  unsecured, and does not have
clearly defined terms of repayment.

NOTE 11 - OTHER PAYABLES AND ACCRUED EXPENSES

                                     March 31,    December 31,
                                       2005           2004
                                   ------------   ------------
                                           (Unaudited)
                                   ---------------------------

Accrued staff commission & bonus   $    220,008   $  1,167,283
Other payables                          165,770        261,418
Accrued commission                       66,263        192,279

                                   ------------   ------------

                                   $    452,041   $  1,620,980
                                   ============   ============

NOTE 12 - OTHER TAX PAYABLE

Other tax payable  represents  business  tax which is charged at a rate of 5% on
the revenue from services.


                                       13
<PAGE>

NOTE 13 - COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment
--------------------------

During the three  months  ended  March 31, 2005 and 2004,  the Company  incurred
lease expenses  amounting to $91,392 and $50,956  respectively.  As of March 31,
2005, the Company had  commitments  under  operating  leases,  requiring  annual
minimum rentals as follows:

                                                  March 31,    December 31,
                                                    2005           2004
                                                ------------   ------------
                                                        (Unaudited)
                                                ---------------------------

Within one year                                 $    221,815   $    230,703
Two to five years                               $     13,691   $     55,572
                                                ------------   ------------
                                                $    235,506   $    286,275
                                                ============   ============

Property Underwriting Commitment
--------------------------------

As of March 31, 2005, the Company had commitment under the Property Underwriting
Agreement mentioned in Note 3 above as follows:

                                                  March 31,    December 31,
                                                    2005           2004
                                                ------------   ------------
                                                        (Unaudited)
                                                ---------------------------

Property underwriting commitment                $ 42,424,044    $47,457,254
                                                ============   ============

The  management  of the Company  believes that all the  properties  will be sold
within the underwriting period.

Capital Commitments
-------------------

As of March 31, 2005, the Company had capital commitments for the acquisition of
properties as follows:

                                                  March 31,    December 31,
                                                    2005           2004
                                                ------------   ------------
                                                        (Unaudited)
                                                ---------------------------

Commitments for the acquisition of properties   $  1,480,036     $1,480,036
                                                ============   ============


                                       14
<PAGE>

NOTE 14 - STATUTORY RESERVE

According to the relevant  enterprises  regulations in the PRC, a PRC company is
required to transfer a least 10% of its profit  after  taxation,  as  determined
under  accounting  principles  generally  accepted in the PRC, to the  statutory
reserve until the balance reaches 50% of its registered  capital.  The statutory
reserve  can be used to make  good  losses or to  increase  the  capital  of the
relevant company.


NOTE 15 - CONCENTRATION OF CUSTOMERS

During the three months ended March 31, 2005 and 2004,  the following  customers
accounted for more than 10% of total net revenue:

                     Percentage of Net Sales                  Percentage of
                       Three Months Ended                 Accounts Receivable
                            March 31,                        as at March 31,
                     2005              2004              2005              2004
                    ------            ------            ------            ------
                                             (Unaudited)
                    ------------------------------------------------------------

Customer A           56%                *                31%                *
Customer B            *                22%                *                 *
Customer C            *                17%                *                 *
Customer D            *                15%                *                66%
Customer E            *                15%                *                 *

o     less than 10%


NOTE 16 - GUARANTEES

In order to distribute  all the properties of the Suzhou  Property  Underwriting
Project mentioned in Note 3 above, during the quarter,  the Company entered into
property  leasing  agreements with certain buyers of the properties to guarantee
their investment  returns at 8.5% and 8.8% per annum for a period of 5 years and
8 years  respectively.  The  guarantee  period will be started 45 days after the
titles of the  relevant  properties  are passed to the  buyers.  As of March 31,
2005, the management of the Company  considers that no provision  should be made
for the Company's obligations under the foregoing guarantees.




                                       15
<PAGE>

NOTE 17 - PRO-FORMA INFORMATION

The following  table reflects the results of operations on a pro-forma  basis as
if the  acquisition  of BJXJY had occurred at the  beginning  of the  respective
period shown.

                                                             Three Months
                                                                Ended
                                                               March 31,
                                                                 2004
                                                             ------------
                                                             (Unaudited)
                                                             ------------

Net sales                                                    $  1,214,474
                                                             ------------

Net profit                                                   $    131,033
                                                             ------------

Profit per share - basis and diluted                         $       0.01
                                                             ------------

The  pro-forma  financial  information  is  not  necessarily  indicative  of the
operating  results that would have occurred had the acquisition been consummated
as of the dates  indicated,  nor are they  necessarily  indicative of the future
operating results.











                                       16
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's    Discussion   and   Analysis   contains   statements   that   are
forward-looking.   These  statements  are  based  on  current  expectations  and
assumptions  that are subject to risks and  uncertainties.  Actual results could
differ  materially  because of factors discussed in "Risk Factors" and elsewhere
in this report.

OVERVIEW

The following Management's  Discussion and Analysis ("MD&A") is intended to help
the reader  understand  Sunrise  Real Estate  Development  Group,  Inc.  MD&A is
provided  as a  supplement  to,  and  should be read in  conjunction  with,  our
financial statements and the accompanying notes.

Since the former  stockholders of Sunrise Real Estate  Development  Group,  Inc.
(Cayman Islands) ("CY-SRRE") and LIN RAY YANG Enterprise Ltd. ("LRY") acquired a
majority of our voting interests in the merger, the transaction was treated as a
reverse acquisition, with CY-SRRE and LRY treated as the acquirer for accounting
purposes.  Accordingly,  the pre-merger  financial statements of CY-SRRE and LRY
are our  historical  financial  statements.  Before the completion of the merger
exercise, SRRE had no continuing operations and its historical results would not
be meaningful if combined with the historical results of CY-SRRE,  LRY and their
subsidiaries.

As a result of the  acquisition,  the former  owners of  CY-SRRE  and LRY hold a
majority  interest  in  the  combined  entity.   Generally  accepted  accounting
principles  require in certain  circumstances  that a company whose stockholders
retain the majority  voting  interest in the combined  business to be treated as
the acquirer for financial reporting purposes.  Accordingly, the acquisition has
been accounted for as a "reverse  acquisition"  arrangement  whereby CY-SRRE and
LRY are deemed to have purchased  SRRE.  However,  SRRE remains the legal entity
and the Registrant for Securities and Exchange  Commission  reporting  purposes.
The  historical  financial  statements  prior to  October  5,  2004 are those of
CY-SRRE and LRY and their  subsidiaries.  All shares and per share data prior to
the  acquisition  have  been  restated  to  reflect  the  stock  issuance  as  a
recapitalization of CY-SRRE and LRY.

SRRE and its  subsidiaries,  namely,  CY-SRRE,  LRY,  Shanghai  Xin Ji Yang Real
Estate  Consultation  Company Limited ("SHXJY"),  Suzhou Xin Ji Yang Real Estate
Consultation  Company  Limited  ("SZXJY"),  Beijing  Xin  Ji  Yang  Real  Estate
Consultation   Company  Limited   ("BJXJY"),   Shanghai  Shangyang  Real  Estate
Consultation   Company  Limited  ("SHSY")  and  Suzhou  Gao  Feng  Hui  Property
Management  Company  Limited  ("SZGFH")  are  collectively  referred  to as "the
Company" hereafter. The principal activities of the Company are the provision of
property brokerage services,  real estate marketing  services,  property leasing
services and property management services in Mainland China.


                                       17
<PAGE>

RECENT DEVELOPMENTS

Before 2004, our major business is agency business,  whereby our only subsidiary
then, SHXJY was contracted by property developers to market and sell their newly
developed  property  units;  in return we earn a commission  fee calculated as a
percentage of the selling price.  Our business  operation in SHXJY  continues to
demonstrate growth in revenue.

In 2004,  through  another  subsidiary,  SHSY,  we  venture  into a higher  risk
business  model  whereby our  commission  was not  calculated as a percentage of
selling price  anymore;  instead,  our  commission  revenue is equivalent to the
price difference between the final selling price and underwriting price. In this
higher risk model named  "Underwriting  Model", we negotiated with the developer
for an  underwriting  price  as low as  possible,  with  the  condition  that we
guarantee to acquire all unsold units within certain period.  In return, we were
given  the  flexibility  to price  the  final  selling  price and earn the price
difference between the final selling price and the underwriting  price. The risk
of this kind of arrangement is that, if there is any unsold unit upon the expiry
period,  we  may  have  to  absorb  the  unsold  units  from  developers  at the
underwriting  price and hold them as our inventory  stock or investment.  As per
the terms of underwriting agreement, there are 2 expiry periods: the first is in
the mid of 2005 whereby we committed to sell 60% of the  contracted  value;  the
second is by the end 2005,  whereby we  committed  to the  remaining  40% of the
contracted value.

While we expect revenue to stem from these two subsidiaries  businesses,  we can
provide no assurance that this will result in any increase in profitability.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10- QSB

In addition to historical information, this Form 10-QSB contains forward-looking
statements.  Forward-looking  statements are  expressions of our current beliefs
and expectations, based on information currently available to us; estimates, and
projections about our industry,  and certain assumptions made by our management.
These statements are not historical  facts. We use words such as  "anticipates,"
"expects,"  "intends," "plans,"  "believes,"  "seeks,"  "estimates," and similar
expressions to identify our  forward-looking  statements,  which include,  among
other  things,  our  anticipated  revenue and cost of our agency and  investment
business.

Because  we are  unable to control  or  predict  many of the  factors  that will
determine  our  future  performance  and  financial  results,  including  future
economic, competitive, and market conditions, our forward-looking statements are
not guarantees of future performance.  They are subject to risks, uncertainties,
and  errors in  assumptions  that  could  cause  our  actual  results  to differ
materially from those reflected in our  forward-looking  statements.  We believe
that the assumptions  underlying our forward-looking  statements are reasonable.
However,   you  should  not  place  undue  reliance  on  these   forward-looking
statements.  They only reflect our view and  expectations as of the date of this
Form  10-QSB.  We  undertake  no  obligation  to  publicly  update or revise any
forward-looking  statement  in  light  of new  information,  future  events,  or
otherwise.


                                       18
<PAGE>

RECENTLY ISSUED ACCOUNTING STANDARDS

In December  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation  46R  (FIN  46R),  a  revision  to  Interpretation  46 (FIN  46),
Consolidation  of Variable  Interest  Entities.  FIN 46R  clarifies  some of the
provisions of FIN 46 and exempts certain entities from its requirements. FIN 46R
is effective at the end of the first interim period ending after March 15, 2004.
Entities that have adopted FIN 46 prior to this  effective  date can continue to
apply  the  provisions  of FIN 46 until the  effective  date of FIN 46R or elect
early  adoption  of FIN 46R.  The  adoption of FIN 46 and FIN 46R did not have a
material impact on our financial statements.

In December  2004,  the  Financial  Accounting  Standards  Board (FASB) issued a
revision of FASB  Statement  No. 123,  (FASB 123R)  Accounting  for  Stock-Based
Compensation. This Statement supersedes APB Opinion No. 25, Accounting for Stock
Issued  to  Employees,  and  its  related  implementation  guidance.  FASB  123R
establishes  standards for the  accounting for  transactions  in which an entity
exchanges  its  equity  instruments  for goods or  services.  It also  addresses
transactions  in which an entity  incurs  liabilities  in exchange  for goods or
services that are based on the fair value of the entity,  equity  instruments or
that may be settled  by the  issuance  of those  equity  instruments.  FASB 123R
focuses  primarily on accounting  for  transactions  in which an entity  obtains
employee services in share-based payment transactions. FASB 123R does not change
the accounting guidance for share-based payment  transactions with parties other
than  employees  provided  in FASB 123 as  originally  issued and EITF Issue No.
96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods or Services. FASB 123R does
not address the accounting for employee share ownership plans, which are subject
to AICPA  Statement of Position  93-6,  Employers  Accounting for Employee Stock
Ownership  Plans.  We do not  believe  the  adoption  of FASB  123R  will have a
material impact on our financial statements.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.   Critical   accounting   policies  for  us  include  revenue
recognition, impairment of goodwill, and accounting for income taxes.

Goodwill
--------

SFAS 142, Goodwill and Other Intangible Assets, requires that goodwill be tested
for impairment on an annual basis  (December 31 for us) and between annual tests
if an event  occurs or  circumstances  change  that would more  likely  than not


                                       19
<PAGE>

reduce the fair value of a reporting unit below its carrying value. These events
or  circumstances  could include a significant  change in the business  climate,
legal  factors,   operating  performance   indicators,   competition,   sale  or
disposition of a significant portion of the Company. Application of the goodwill
impairment test requires judgment, including the determination of the fair value
of the Company.  The fair value of Company is estimated  using a discounted cash
flow methodology.  This requires  significant  judgments including estimation of
future cash flows, which is dependent on internal  forecasts,  estimation of the
long-term rate of growth for our business, the useful life over which cash flows
will occur, and  determination of our weighted average cost of capital.  Changes
in these estimates and assumptions  could materially affect the determination of
fair value and/or goodwill impairment for the Company.

Income Taxes
------------

SFAS 109,  Accounting  for Income Taxes,  establishes  financial  accounting and
reporting standards for the effect of income taxes. The objectives of accounting
for income taxes are to recognize the amount of taxes payable or refundable  for
the current  year and  deferred  tax  liabilities  and assets for the future tax
consequences  of events  that  have been  recognized  in an  entity's  financial
statements  or tax  returns.  Judgment is required in  assessing  the future tax
consequences of events that have been recognized in our financial  statements or
tax returns.  Variations in the actual outcome of these future tax  consequences
could materially impact our financial position or our results of operations.

Revenue Recognition
-------------------

Agency  commission  revenue  from  property  brokerage  is  recognised  when the
property developer and the buyer complete a property sales  transactions,  which
is normally at the time when the property  developer  receives  from the buyer a
portion  of the sales  proceeds  in  accordance  with the terms of the  relevant
property sales agreement.

Revenue from  marketing  consultancy  services is  recognized  when services are
provided to clients.

RESULTS OF OPERATIONS

We provide the discussion and analysis of our changes in financial condition and
results of operations for the First Quarter,  2005, with comparison to the First
Quarter, 2004.

Revenue
-------

Total  sales  increased  53.5% from  $1,214,474  in the First  Quarter,  2004 to
$1,864,589 in the First Quarter,  2005.  Agency sales  represented  43.8% of net
revenues in the First Quarter, 2005, and underwriting sales represented 56.2% of
the total. All revenues in the First Quarter, 2004 were from agency sales.

Our net revenues  after sales tax are mainly agency  commission fee derived from
SHXJY.  Net  revenue was  $817,048  in the First  Quarter,  2005  compared  with


                                       20
<PAGE>

$1,214,474 in the First Quarter,  2004. In the First  Quarter,  2004 we recorded
revenues  from  contracts  procured in the Second and Third  Quarters of 2003 on
buildings in Shanghai,  Nanchang and Nanjing.  These buildings were close to the
sold out at the end of 2004. We estimate  that the agency sales  revenues on the
new  buildings  will be  achieved in the Second and Third  Quarters of 2005.  We
expect that total agency sales revenues in 2005 will be higher than 2004.

In the First Quarter,  2005,  another  operating  subsidiary,  SHSY  contributed
$1,047,541  to net revenues.  There were no revenues from this  operation in the
First Quarter,  2004. In February 2004,  SHSY entered an agreement to underwrite
an office building in Suzhou,  known as Suzhou  Sovereign  Building.  We already
started  selling in December 2004, and contributed  revenues of $122,380.  As of
April 23,  2005,  we have sold a total of 79 units with a total  sales  price of
$17,121,400. We earned a commission of $1,047,541 in the First Quarter, 2005 for
the sale of 31 units.  As of April 30, 2005,  we have sold 40% of the  building.
Property  Sales  Underwriting  is  comparatively  a higher risk  business  model
compared to our pure commission  based agency  business,  whereby our commission
was not  calculated  as a percentage  of selling  price  anymore;  instead,  our
commission  revenue is  equivalent  to the price  difference  between  the final
selling  price and  underwriting  price.  In this  relatively  high risk  model,
namely,  "Underwriting  Model", we negotiated with developer for an underwriting
price as low as possible,  with the  condition  that we guarantee to acquire all
unsold units within certain period.  In return, we were given the flexibility to
price the final  selling price and earn the price  difference  between the final
selling price and the  underwriting  price. The risk of this kind of arrangement
is that,  if there is any  unsold  unit upon the expiry  period,  we may have to
absorb the unsold property units from developers at the  underwriting  price and
hold it as our stock or investment.

Cost of Revenue
---------------

Cost of sales  revenues  decreased to $398,589 in the First  Quarter,  2005 when
compared with $490,149 in the First Quarter, 2004. The primary difference is the
timing of advertising expenses.

1.   Advertising costs
     -----------------

For most of the projects handled by the Company,  advertising costs are borne by
corresponding  property  developers.  For some of the projects,  we committed to
bear all advertising costs on our own in exchange for a higher agency commission
rate. During the First Quarter of 2004, $193,076 was spent; whereas, $62,339 was
spent  in the  First  Quarter,  2005.  All  advertising  costs  incurred  in the
promotion of the Company's  property projects are expensed as incurred.  We plan
to  spend  more on  advertising  in the  Second  Quarter,  2005 to  support  the
underwriting sales activity. Due to the cyclical nature of our business, we have
no guarantee to match the advertising costs to the related revenue.  Advertising
costs are  usually  incurred  according  to the  timeline  specified  in project
budgeting.  It is budgeted  according  to a  percentage  of our  expected  sales
amount.  Due to the nature of property  marketing  and sales cycle,  advertising
costs are usually  incurred two to three months prior to the formal sales launch


                                       21
<PAGE>

activities;  in some  cases,  advertising  costs and  activities  may take place
before  period-end,   while  sales  launch  activities  were  take  place  after
period-end.  As  advertising  costs  are  expended  off as  incurred,  there  is
possibility  that  advertising  costs incurred in current period are not exactly
matching with the related revenue earned.

2.   Operating Expenses
     ------------------

Operating expenses  increased 35.8% to $314,443 in the First Quarter,  2005 from
$231,630 in First  Quarter,  2004.  These are  primarily due to the increases in
sales office and branch office expenses, including set up expenses for new sales
offices.


3.   General and Administrative Expenses
     -----------------------------------

The Company's general & administrative expenses increased by 71.4% to $557,937
in the First Quarter, 2005 to $325,362 in the First Quarter, 2004. The increase
in general and administrative expenses was mainly due to:

     i.   SHSY, the  underwriting  sales company was  established on February 5,
          2004. Its corporate  overhead  expenses were incurred from April 2004;
          whereas it has been fully  operating in the First  Quarter,  2005. The
          corporate  overhead  expenses for the First Quarter 2005  increased by
          $77,158 over that of the First Quarter, 2004.

     ii.  The increase in professional fees for the maintenance of the Company's
          listing status,  e.g. audit,  legal and other  professional  fees. The
          professional fees for the First Quarter 2005 increased by $60,862 when
          compared to the First Quarter, 2004.

4.   Finance Expenses
     ----------------

Total finance  expenses in the First Quarter,  2005 were $33,663;  there were no
finance expenses in First Quarter,  2004.  Interest expenses incurred to support
our underwriting sales effort were $21,334.  Additionally,  interest expenses of
$12,329 was related to the $1 million promissory note.



LIQUIDITY AND CAPITAL RESOURCES

The company meets its working capital and capital investment requirements mainly
by using operating cash flows, to a limited extent, bank loans.

Our accounts receivable balance at March 31, 2005 was $1,051,917.

We  ended  the  period  with a cash  position  of  $1,327,119.  We had  positive
operating cash flow of $426,734,  primarily  attributable to decreased  accounts
receivable.


                                       22
<PAGE>

We anticipate that our available funds and cash flows generated from
operations will be sufficient to meet our anticipated needs for working capital
expenditures and business expansion through 2005. We may need to raise
additional funds in the future, however, in order to fund acquisitions, develop
new projects, or if our business otherwise grows more rapidly than we currently
predict. If we do need to raise additional funds, we expect to raise those funds
through new issuance of shares of our equity securities in one or more public
offerings or private placements, or through credit facilities obtained by
lending institutions.

ITEM 3.  CONTROLS AND PROCEDURES

Based on the most recent  evaluation,  which was  completed as of the end of the
period  covered  by this Form  10-QSB,  the Chief  Executive  Officer  and Chief
Financial  Officer have  concluded  that the Company's  disclosure  controls and
procedures were effective at March 31, 2005, to ensure that information required
to be  disclosed  in  reports  that the  Company  files  or  submits  under  the
Securities Exchange Act of 1934 is recorded, processed, summarized, and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and  forms.  There  were no  changes in the  Company's  internal  controls  over
financial  reporting  during  the  quarter  ended  March  31,  2005,  that  have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Company's internal controls over financial reporting.











                                       23
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings of a material nature.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

(a) Exhibits: Exhibit Number and Brief Description.

2.1  Exchange  Agreement  dated as of August 31,  2004 by and among Lin Ray Yang
     Enterprise Ltd., Lin, Chi-Jung, as agent for the beneficial shareholders of
     such  company,  and  the  registrant,  incorporated  by  reference  to  the
     Registrant's  Current  Report  on Form 8-K  filed  with the  Commission  on
     September 8, 2004.

2.2  Exchange  Agreement  dated as of August 31, 2004 by and among  Sunrise Real
     Estate Development Group, Inc., a Cayman Islands company, Lin, Chi-Jung, as
     agent for the beneficial  shareholder of such company,  and the registrant,
     incorporated  by reference to the  Registrant's  Current Report on Form 8-K
     filed with the Commission on September 8, 2004.

3.1  Articles  of  Incorporation  incorporated  by  reference  to Exhibit 3.1 of
     Form-10QSB filed with the Commission on April 23, 2001.


                                       24
<PAGE>

3.1a Amendments to the Articles of  Incorporation  incorporated  by reference to
     Exhibits 3.1a and 3.1b to  Form-10-KSB  for the fiscal year ended  December
     31,2003 filed with the Commission on April 14, 2004.

3.1b Bylaws of the Company incorporated by reference to Exhibit 3.2 of Form-10SB
     filed with the Commission on April 23, 2001.

31.1 Section 302 Certification by the Corporation's Chief Executive Officer.

31.2 Section 302 Certification by the Corporation's Chief Financial Officer.

32.1 Section 1350 Certification by the Corporation's Chief Executive Officer and
     Corporation's Chief Financial Officer.

--------------------------------------------------------------------------------











                                       25
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the Company caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

                   SUNRISE REAL ESTATE DEVELOPMENT GROUP, INC.





Date: May 15, 2005                     By: /s/ Lin, Chi-Jung
                                          --------------------------------------
                                          Lin, Chi-Jung, Chief Executive Officer


Date: May 15, 2005                     By: /s/ Art Honanyan
                                          --------------------------------------
                                          Art Honanyan, Chief Financial Officer