U. S.
Securities and Exchange Commission


Washington,
D. C. 20549





FORM
10-Q





[X]
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended June 30, 2008[
      ]
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For the transition period from _____ to
_____





Commission
File No. 0-51012





XINYINHAI
TECHNOLOGY, LTD.


(Name of
Small Business Issuer in its Charter)





Utah
            87-0427336(State
      or Other Jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer I.D. No.)








No.
16 Dalian Road, Centralized Park Haping Road, Harbin Development Zone, China
150060


(Address
of Principal Executive Offices)





86-451-868-11118


Issuer's
Telephone Number:





Indicate  by
check mark  whether the  Registrant  (1) has filed
all reports required to be filed by Sections 13 or 15(d) of
the  Securities Exchange Act of
1934  during  the  preceding  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.





YesX                  No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check One)




Large
accelerated filer__ Accelerated
filer__  Non-accelerated filer__ Small
reporting company_X_


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)  Yes  __  No
_X_





APPLICABLE
ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding
of each of the Registrant's classes of common stock, as of the latest
practicable date:


August
12, 2008


Common
Voting Stock: 19,484,029








Xinyinhai
Technology, Ltd.


Condensed
Consolidated Balance Sheet


As
of June 30, 2008 and December 31, 2007


(Stated
in US Dollars)





June
      30,
            
            
            December
      31,2008
            
            
            2007(Unaudited)
            
            
            (Audited)ASSETSCurrent assetsCash and cash
      equivalents
            
            $
            126,785
            
            
            $
            1,308,877Restricted cash
      (Note 6)
            
            
            -
            
            
            
            363,492Trade receivable
      (Net of allowance for doubtful accounts of $7,423 for 2008 and $6,682 for
      2007)
            
            
            3,960,991
            
            
            
            1,329,732Inventories (Note
      7)
            
            
            2,198,926
            
            
            
            1,149,271Other receivable,
      deposits and prepayments
            
            
            545,510
            
            
            
            166,430Prepaid expenses
      (Note 8)
            
            
            61,508
            
            
            
            412,737Total current
      assets
            
            
            6,893,720
            
            
            
            4,730,539Property, plant and equipment,
      net (Note 9)
            
            
            7,198,755
            
            
            
            5,349,795Land use right
            
            
            1,005,862
            
            
            
            70,710Deposits for acquisition of
      property and equipment
            
            
            -
            
            
            
            1,843,800TOTAL
      ASSETS
            
            $
            15,098,337
            
            
            $
            11,994,844LIABILITIES
      AND STOCKHOLDERS’ EQUITYLIABILITIESCurrent
    liabilitiesTrade
      payable
            
            $
            1,353,719
            
            
            $
            777,806Bills
      payable (Note 6)
            
            
            -
            
            
            
            363,492Customer
      deposits
            
            
            252,834
            
            
            
            286,935Other payable and accrued
      liabilities (Note 10)
            
            
            997,264
            
            
            
            920,448Income tax
      payable
            
            
            312,034
            
            
            
            -Value added tax
      payable
            
            
            6,189
            
            
            
            137,334Total current
      liabilities
            
            
            2,922,040
            
            
            
            2,486,015TOTAL
      LIABILITIES
            
            
            2,922,040
            
            
            
            2,486,015COMMITMENTS
      AND CONTINGENCIESMINORITY
      INTEREST (NOTE 3)
            
            
            1,237,220
            
            
            
            919,640STOCKHOLDERS’
      EQUITYCommon stock
            
            
            19,184
            
            
            
            24,417Additional paid-in
      capital
            
            
            3,104,843
            
            
            
            3,799,610Retained
    earnings
            
            
            5,249,187
            
            
            
            3,504,343Statutory
    reserves
            
            
            1,282,657
            
            
            
            918,636Accumulated other comprehensive
      income
            
            
            1,283,206
            
            
            
            342,183TOTAL
      STOCKHOLDERS’ EQUITY
            
            
            10,939,077
            
            
            
            8,589,189TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            15,098,337
            
            
            $
            11,994,844





See the
accompanying notes to condensed consolidated financial
statements








Xinyinhai
Technology, Ltd.


Condensed
Consolidated Statements of Income and Comprehensive Income


For
the three and six months ended June 30, 2008 and 2007


(Stated
in US Dollars)








Three
      months ended June 30, (Unaudited)
            
            
            Six
      months ended June 30, (Unaudited)2008
            
            
            2007
            
            
            2008
            
            
            2007Revenues
      (Note 3)
            
            $
            4,142,698
            
            
            $
            2,878,962
            
            
            $
            7,522,593
            
            
            $
            5,019,079Cost
      of revenues
            
            
            (2,487,518
            )
            
            
            (1,624,896
            )
            
            
            (4,503,855
            )
            
            
            (2,874,944
            )Gross
      profit
            
            
            1,655,180
            
            
            
            1,254,066
            
            
            
            3,018,738
            
            
            
            2,144,135Operating
      expensesSelling and distribution
      expenses
            
            
            107,288
            
            
            
            130,408
            
            
            
            174,515
            
            
            
            226,813General and administrative
      expenses
            
            
            315,594
            
            
            
            199,375
            
            
            
            597,336
            
            
            
            796,488Total expenses
            
            
            422,882
            
            
            
            329,783
            
            
            
            771,851
            
            
            
            1,023,301Income
      from operations
            
            
            1,232,298
            
            
            
            924,283
            
            
            
            2,246,887
            
            
            
            1,120,834Other
      income (Note 8)
            
            
            376,250
            
            
            
            -
            
            
            
            376,250
            
            
            
            -Interest
      income
            
            
            294
            
            
            
            4,280
            
            
            
            1,424
            
            
            
            9,298Income
      before income taxes and minority interest
            
            
            1,608,842
            
            
            
            928,563
            
            
            
            2,624,561
            
            
            
            1,130,132Income
      taxes (Note 4)
            
            
            (167,938
            )
            
            
            -
            
            
            
            (303,351
            )
            
            
            -Income
      before minority interest
            
            
            1,440,904
            
            
            
            928,563
            
            
            
            2,321,210
            
            
            
            1,130,132Minority
      interest
            
            
            (117,556
            )
            
            
            (113,745
            )
            
            
            (212,345
            )
            
            
            (168,853
            )Net
      income
            
            $
            1,323,348
            
            
            $
            814,818
            
            
            $
            2,108,865
            
            
            $
            961,279Other
      comprehensive incomeForeign currency translation
      adjustments
            
            
            229,700
            
            
            
            89,399
            
            
            
            941,023
            
            
            
            130,937Comprehensive
      income
            
            $
            1,553,048
            
            
            $
            904,217
            
            
            $
            3,049,888
            
            
            $
            1,092,216Earnings
      per share - basic and diluted (Note 5)
            
            $
            0.07
            
            
            $
            0.03
            
            
            $
            0.10
            
            
            $
            0.04Weighted
      average number of common stock outstanding
            
            
            19,359,853
            
            
            
            24,317,899
            
            
            
            21,131,609
            
            
            
            24,317,899





See the
accompanying notes to condensed consolidated financial statements









Xinyinhai
Technology, Ltd.


Condensed
Consolidated Statements of Cash Flows


For
the three and six months ended June 30, 2008 and 2007


(Stated
in US Dollars)





Six
      months ended June 30,
              (Unaudited)2008
            
            
            2007Cash
      flows from operating activitiesNet income
            
            $
            2,108,865
            
            
            $
            961,279Adjustments to reconcile net
      income to net cash provided by operating activities:Depreciation and
      amortization
            
            
            160,959
            
            
            
            676,111Other income
            
            
            (376,250
            )
            
            
            -Minority
    interest
            
            
            212,345
            
            
            
            168,853Changes in operating assets and
      liabilitiesRestricted cash
            
            
            391,478
            
            
            
            -Trade
receivable
            
            
            (2,418,655
            )
            
            
            (564,361
            )Inventories
            
            
            (899,980
            )
            
            
            (180,954
            )Other receivable, deposits and
      prepayments
            
            
            1,634,674
            
            
            
            (550,466
            )Trade payable
            
            
            478,357
            
            
            
            (135,583
            )Bills payable
            
            
            (391,478
            )
            
            
            -Customer
    deposits
            
            
            (63,229
            )
            
            
            (191,647
            )Other payable and accrued
      liabilities
            
            
            (24,638
            )
            
            
            (40,008
            )Income tax
    payable
            
            
            303,351
            
            
            
            -Value added tax
      payable
            
            
            (141,891
            )
            
            
            (109,252
            )Net
      cash flows provided by operating activities
            
            
            973,908
            
            
            
            33,972Cash
      flows from investing activitiesPayments to acquire property,
      plant and equipment, and land use right
            
            
            (2,271,937
            )
            
            
            (41,076
            )Net
      cash flows used in investing activities
            
            
            (2,271,937
            )
            
            
            (41,076
            )Effect
      of foreign currency translation on cash and cash
    equivalents
            
            
            115,937
            
            
            
            39,793Net
      (decrease)/increase in cash and cash equivalents
            
            
            (1,182,092
            )
            
            
            32,689Cash
      and cash equivalents - beginning of period
            
            
            1,308,877
            
            
            
            1,553,139Cash
      and cash equivalents - end of period
            
            $
            126,785
            
            
            $
            1,585,828Supplemental
      disclosures for cash flow informationInterest paid
            
            $
            -
            
            
            $
            -Income taxes
    paid
            
            $
            -
            
            
            $
            -




See the
accompanying notes to condensed consolidated financial statements







Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)








1.         Corporation
information





(a)
            Xinyinhai
      Technology, Ltd. (“Xinyinhai” or the “Company”) was incorporated in Utah
      on October 18, 1985.  It currently has two subsidiaries, Winner
      Sea Group Limited (“Winner Sea”) and Harbin Golden Sea Technology Printing
      Co., Ltd. (“Harbin Golden Sea”).





Winner Sea
is a business company organized under the laws of the British Virgin Islands on
January 12, 2006.  It has conducted no business and is a holding
company whose only asset is 90% equity interest in
Harbin Golden Sea.  Ms. Xie Guihong, a director of the
Company, owns the remaining 10% equity interest in
Harbin Golden Sea.





Harbin Golden Sea is
a company located in Harbin City, Heilongjiang Province, the People’s Republic
of China (“PRC”). Founded in 1998, Harbin Golden Sea has
developed into a leading participant in the PRC’s financial note printing
industry.  It is one of the companies to which the PRC government has
issued the Special Industry Operating Permit and the Government Securities and
Documents Duplicating Permit, which are the licenses required in order to be
engaged in printing bank vouchers in the PRC.





The
Company ended its development stage after the share exchange transaction as
detailed in note 1(b) to the financial statements.





(b)
            On
      June 29, 2006, the Company executed a share exchange agreement (the “Share
      Exchange”) with the stockholders of Winner Sea whereby the
      stockholders of Winner Sea exchanged all their Winner Sea
      shares for 18,000,000 shares of the Company’s common stock, representing
      98.3% of the then outstanding stock of the
  Company.





The
purchase method under reverse takeover accounting has been applied for the Share
Exchange.  These consolidated financial statements issued under the
name of the legal parent, Xinyinhai, are a continuation of the financial
statements of Winner Sea, which include Winner Sea’s majority owned
subsidiary Harbin Golden Sea.








2.         Description
of business





The
Company, through Harbin Golden Sea, is a leading participant in PRC’s financial
notes printing industry.  It provides printing services whose quality
equals the highest standards worldwide and imports state-of-the-art printing
equipment from overseas that is installed on its advanced software systems, such
as anti-falsification software.





The
Company also earns approximately 33% of its revenue for the current reporting
period from its position as a distributor of plasma arc cutting machinery and
consumable parts.  The plasma arc cutting systems are designed to
provide metal workers with clean cuts for metal work that permits little
tolerance for error, and are well-known worldwide.





The
Company acquired an office building in 2007 that was planned to be used as a
tourist destination, to take advantage of the rapid growth of the tourism
industry in Harbin.  The Company is currently considering selling
it.





Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)








3.         Summary
of significant accounting policies





Basis of presentation and
consolidation





The
accompanying condensed consolidated financial statements of the Company have
been prepared in accordance with generally accepted accounting principles in the
United States of America.





In the
opinion of the management of the Company, all adjustments, which are of a normal
recurring nature, necessary for a fair statement of the results for the three
and six month periods have been made.  Results for the interim period
presented are not necessarily indicative of the results that might be expected
for the entire fiscal year.  These condensed financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto included in the Company’s Form 10KSB as filed with the Securities
and Exchange Commission on April 14, 2008.





The
consolidated financial statements include the accounts of the Company and its
subsidiaries.  All significant inter-company accounts and transactions
have been eliminated in consolidation.





Use of
estimates





In
preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the
consolidated financial statements, as well as the reported amounts of revenues
and expenses during the reporting periods.  These accounts and
estimates include, but are not limited to, the valuation of accounts receivable,
inventories and the estimation on useful lives of property, plant and
equipment.  Actual results could differ from those
estimates.





Trade
receivable





The
Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated risks by performing credit checks and
actively pursuing past due accounts.  An allowance for doubtful
accounts is established and recorded based on managements’ assessment of the
credit history with the customers and current relationships with
them.





The
Company’s management determined that no further provision for uncollectible
accounts was required for the three and six months ended June 30,
2008.





Inventories





Inventories
are stated at the lower of cost or market.  Cost is determined on a
weighted average basis and includes all expenditures incurred in bringing the
goods to the point of sale and putting them in a saleable
condition.  In assessing the ultimate realization of inventories, the
management makes judgments as to future demand requirements compared to current
or committed inventory levels.





Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)





3.         Summary
of significant accounting policies (Cont’d)





Property, plant and
equipment





Property,
plant and equipment are stated at cost less accumulated
depreciation.  Cost represents the purchase price of the asset and
other costs incurred to bring the asset into its existing use.





Depreciation
is provided to write off the cost of the assets to the estimated residual value
on a straight-line basis over their estimated useful lives as
follows:





Depreciable
      lifeBuilding
            20
      yearsPlant
      and machinery
            10
      yearsFurniture,
      fixtures and equipment
            5
      yearsMotor
      vehicles
            10
      years





Maintenance
or repairs are charged to expense as incurred.  Upon sale or
disposition, the applicable amounts of asset cost and accumulated depreciation
are removed from the accounts and the net amount less proceeds from disposal is
charged or credited to income.





Land use
right





Land use
right is stated at cost less accumulated amortization.  Amortization
is provided using the straight-line method over the remaining terms of the lease
of 40 years.





Minority
interests





Minority
interests result from the consolidation of 90% owned subsidiary, Harbin Golden
Sea, where the Company has control over its operations.





Stock-based
compensation





The
Company adopted the SFAS No. 123R, "Share-Based Payment" using the modified
prospective method.  Under SFAS 123R, equity instruments issued to
service providers for their services are measured at the grant-date fair value
and recognized in the statement of income and comprehensive income over the
vesting period.





Revenue
recognition





The
Company derives revenues from the sales of printed products and re-sale of
purchased third parties equipment.  The Company recognizes its
revenues net of related business taxes and value added taxes and when persuasive
evidence of an arrangement exists, transfer of title has occurred or services
have been rendered, the selling price is fixed or determinable and
collectibility is reasonably assured.





(a)
            The
      Company recognizes revenue from the sale of printed forms upon delivery to
      the customers and the transfer of title and risk of
      loss.  Because the majority of products are customized to meet
      customer specifications, product returns are not
    significant.








Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)








3.         Summary
of significant accounting policies (Cont’d)





Revenue recognition
(cont’d)





(b)
            Re-sale
      of purchased third parties equipment, plasma arc cutting machines, does
      not require significant modification or customization.  Revenue
      from sale of the equipment and associated spare parts is recognized at the
      time of delivery of products to customers and when the title and ownership
      are passed to the customers.







Basic and diluted earnings
per share




The
Company reports basic earnings per share in accordance with SFAS No. 128,
“Earnings Per Share”.  Basic earnings per share is computed using the
weighted average number of shares outstanding during the periods
presented.  The weighted average number of shares of the Company
represents the common stock outstanding during the periods.





Recently issued accounting
standards





In May
2008, the FASB issued SFAS No. 162 “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS 162 identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles (GAAP) in the
United States (the GAAP hierarchy). The guidance will become effective 60 days
following the SEC’s approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”. The Company is
currently evaluating the impact of adopting SFAS 162 on its financial
statements.








Xinyinhai
      Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)





4.         Income
taxes





The
Company is subject to the United States of America tax law at tax rate of
34%.  It has no taxable income for income tax purposes for the three
and six months ended June 30, 2008 and 2007.  The Company has not
provided deferred taxes on undistributed earnings of its non-U.S. subsidiaries
as of June 30, 2008 and December 31, 2007, as it is the Company’s current policy
to reinvest these earnings in non-U.S. operations.





Winner
Sea is not subject to income tax.





Income
taxes are calculated at 12.5% on the estimated assessable profits of Harbin
Golden Sea. The subsidiary enjoys a 50% tax reduction that was approved by the
Taxation Bureau of Harbin City.





On
January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (“FIN 48”).  Pursuant to FIN 48, the
Company identified and evaluated any potential uncertain tax
positions.  The Company has concluded that there are no uncertain tax
positions requiring recognition in the financial statements.








5.         Earnings
per share - basic and diluted





The basic
and diluted earnings per share is calculated using the net income and the
weighted average number of common stock outstanding during the reporting
periods.





The basic
and diluted earnings per share are the same as the warrants granted to external
financial advisors were anti-dilutive.








6.         Restricted
cash and bills payable





When the
Company intends or is requested to settle its suppliers by issuance of bills, it
is required to place deposits with banks equal to 100% of the bills amount at
the time of issuance.  These deposits will be used to settle the bills
at maturity.





The bills
payable outstanding as of December 31, 2007 had been settled during the current
reporting period.





7.           Inventories


June
      30,
            
            December
      31,2008
            
            2007(Unaudited)
            
            (Audited)Raw
      materials
            $1,565,103
            
            $781,582Work
      in progress
            174,818
            
            216,170Finished
      goods
            459,005
            
            151,519$2,198,926
            
            $1,149,271








Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)





8.           Prepaid
expenses


June
      30,
            
            
            December
      31,2008
            
            
            2007(Unaudited)
            
            
            (Audited)Prepaid
      consultancy fees
            
            $
            149,500
            
            
            $
            2,256,500Accumulated
      amortization
            
            
            (87,992
            )
            
            
            (854,138
            )61,508
            
            
            
            1,402,362Termination
      of consulting agreements
            
            
            -
            
            
            
            (989,625
            )$
            61,508
            
            
            $
            412,737





(a)
            The
      Company and certain consultants agreed to terminate the consulting
      agreements whereby the consultants would return an aggregate of 3,233,870
      shares of the Company’s common stock previously granted to them to the
      Company.  These shares of common stock had been returned to the
      Company for cancellation in February 2008.  The cancellation was
      reflected in the financial statements for the year ended December 31, 2007
      as the termination was in negotiation and concluded before December 31,
      2007.





(b)
            The
      Company and certain consultants agreed to cancel the consulting agreements
      whereby the consultants would return an aggregate of 2,000,000 shares of
      the Company’s common stock previously granted to them to the
      Company.  These shares of common stock had been returned to the
      Company for cancellation in April 2008.  Since the services
      related to certain of these common stocks were performed and recognized as
      expenses in previous periods, the Company recognized an income of $376,250
      during the current period upon return of these common stock from the
      consultants.





9.         Property,
plant and equipment, net


June
      30,
            
            
            December
      31,2008
            
            
            2007(Unaudited)
            
            
            (Audited)Buildings
            
            $
            5,985,508
            
            
            $
            4,183,196Plant
      and machinery
            
            
            2,136,713
            
            
            
            1,900,902Motor
      vehicles
            
            
            499,050
            
            
            
            450,479Furniture,
      fixtures and equipment
            
            
            92,298
            
            
            
            59,5468,713,569
            
            
            
            6,594,123Accumulated
      depreciation
            
            
            (1,514,814
            )
            
            
            (1,244,328
            )Property,
      plant and equipment, net
            
            $
            7,198,755
            
            
            $
            5,349,795





As of
June 30, 2008, included in buildings is the office building of $3,700,390
acquired in 2007 that was planned to be used as a tourist destination, to take
advantage of the rapid growth of the tourism industry in Harbin.  The
Company is currently considering selling the property.







Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)





10.       Other
payables and accrued liabilities


June
      30,
            
            
            December
      31,2008
            
            
            2007(Unaudited)
            
            
            (Unaudited)Payable
      for acquisition of building and land use right
            
            $
            868,105
            
            
            $
            783,615Other
      payables
            
            
            2,160
            
            
            
            42,357Accrued
      liabilities, statutory staff welfare and salaries
            
            
            126,999
            
            
            
            94,476$
            997,264
            
            
            $
            920,448





11.       Defined
contribution plan





The
Company has a defined contribution plan for all its qualified employees in the
PRC.  The Company and its employees are each required to make
contributions to the plan at the rates specified in the plan.  The
only obligation of the Company with respect to retirement scheme is to make the
required contributions under the plan.  No forfeited contribution is
available to reduce the contribution payable in future years.  The
defined contribution plan contributions were charged to the statement of income
and comprehensive income.  The Company contributed $4,279 and $4,842
for the six months ended June 30, 2008 and 2007 respectively.





12.       Segment
information





The
Company currently operates in two reportable segments, Sales of printed products
and Re-sale of purchased equipment.  The accounting policies of the
segments are the same as described in the summary of significant accounting
policies.  The Company evaluates segment performance based on income
from operations.  As a result, the components of operating income for
one segment may not be comparable to another segment.  The following
is a summary of the Company’s segment information:





Printing
      Products
            
            
            Equipment
      Trading
            
            
            TotalSix
      months ended June 30,
              (Unaudited)
            
            
            Six
      months ended June 30,
              (Unaudited)
            
            
            Six
      months ended June 30,
              (Unaudited)2008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            2008
            
            
            2007Revenues
            
            $
            5,064,902
            
            
            $
            3,929,608
            
            
            $
            2,457,691
            
            
            $
            1,089,471
            
            
            $
            7,522,593
            
            
            $
            5,019,079Segment
      profit
            
            $
            2,409,333
            
            
            $
            1,593,755
            
            
            $
            452,642
            
            
            $
            94,778
            
            
            $
            2,861,975
            
            
            $
            1,688,533





Three
      months ended June 30,
              (Unaudited)
            
            
            Three
      months ended June 30,
              (Unaudited)
            
            
            Three
      months ended June 30,
              (Unaudited)2008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            2008
            
            
            2007Revenues
            
            $
            2,664,339
            
            
            $
            2,177,191
            
            
            $
            1,478,359
            
            
            $
            701,771
            
            
            $
            4,142,698
            
            
            $
            2,878,962Segment
      profit
            
            $
            1,329,065
            
            
            $
            999,511
            
            
            $
            396,158
            
            
            $
            137,944
            
            
            $
            1,725,223
            
            
            $
            1,137,455





June
      30,
            
            
            December
      31,
            
            
            June
      30,
            
            
            December
      31,
            
            
            June
      30,
            
            
            December
      31,2008
            
            
            2007
            
            
            2008
            
            
            2007
            
            
            2008
            
            
            2007(Unaudited)
            
            
            (Audited)
            
            
            (Unaudited)
            
            
            (Audited)
            
            
            (Unaudited)
            
            
            (Audited)Segment
      assets
            
            $
            10,195,148
            
            
            $
            7,761,404
            
            
            $
            1,021,760
            
            
            $
            301,484
            
            
            $
            11,216,908
            
            
            $
            8,062,888








Xinyinhai
Technology, Ltd.


Notes
to Condensed Consolidated Financial Statements


For
the three and six months ended June 30, 2008 and 2007 (Unaudited)


(Stated
in US Dollars)




12.       Segment
information (Cont’d)





A
reconciliation is provided for unallocated amounts relating to corporate
operations which are not included in the segment information :-





Three
      months ended June 30,
            
            
            Six
      months ended June 30,(Unaudited)
            
            
            (Unaudited)2008
            
            
            2007
            
            
            2008
            
            
            2007Total
      consolidated revenue
            
            $
            4,142,698
            
            
            $
            2,878,962
            
            
            $
            7,522,593
            
            
            $
            5,019,079Total
      income for reportable segments
            
            $
            1,725,223
            
            
            $
            1,137,455
            
            
            $
            2,861,975
            
            
            $
            1,688,533Unallocated
      amounts relatingto
      operations:Amortization of prepaid
      expensesand professional
      fee
            
            
            (116,381
            )
            
            
            (208,892
            )
            
            
            (237,414
            )
            
            
            (558,401
            )Income
      before income taxesand
      minority interest
            
            $
            1,608,842
            
            
            $
            928,563
            
            
            $
            2,624,561
            
            
            $
            1,130,132





June
      30,
            
            
            December
      31,2008
            
            
            2007Assets
            
            (Unaudited)
            
            
            (Audited)Total
      assets for reportable segments
            
            $
            11,216,908
            
            
            $
            8,062,888Unallocated
      amounts relating to operations:Prepaid
expenses
            
            
            61,508
            
            
            
            412,737Building and land use
      right
            
            
            3,780,720
            
            
            
            3,483,465Other
receivable
            
            
            35,963
            
            
            
            32,462Cash and cash
      equivalents
            
            
            3,238
            
            
            
            3,292Total
            
            $
            15,098,337
            
            
            $
            11,994,844





All of
the Company’s long-lived assets and customers are located in the
PRC.  Accordingly, no geographic information is
presented.














ITEM
      2.
            MANAGEMENT
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





Results of Operations




Our revenue in the first six months of
2008 increased by 50% over the revenue realized in the first six months of
2007.  The increase was attributable to both our printing business
(29% increase) and our equipment distribution business (126%
increase).  The increase in printing revenue resulted from our
development of new customers and from our investment in added capacity during
2007, which enabled us to market our services more aggressively.




During
the three months ended June 30, 2008, revenue from our printing business
increased by 22%, from $2,177,191 to $2,664,339.  However, the primary
contributor to the overall 44% quarter-to-quarter increase was our equipment
distribution business, whose revenues increased by 111%, from $701,771 to
$1,478,359.  The increase in distribution revenue was primarily the
result of our establishing additional selling agents throughout China, which has
opened a much larger market for the plasma arc cutting machines that we
sell.  For the recent quarter, equipment distribution contributed 36%
of our revenue.  For the six months ended June 30, 2008, plasma arc
cutting equipment distribution contributed 33% of our revenue.




Continued revenue growth in our
printing services business will require further capital
investment.  During the first quarter of the current year we completed
the purchase of a 10,284m2facility, where we are currently developing expanded production
facilities in order to meet the production requirements of our growing
sales.  In addition, as China’s banking industry rapidly modernizes,
our customers demand additional product offerings similar to those available to
the banking industry in Europe and the U.S.  Our ability to meet that
demand will determine the long term growth of our
business.  Immediately, the development of these new products will
require substantial capital investment.  For that purpose, we are
currently exploring financing possibilities, but have not yet received a
commitment for the funds.




The 40% gross margin realized by our
subsidiary, Harbin Golden Sea on sales in the first six months of 2008 and in
the three months ended June 30, 2008, was lower than the 43% gross margin
realized in the first six months of 2007 (44% for the three months ended June
30, 2007).  The reason for the fall-off was the sharp increase in
revenue from equipment sales in 2008, since our gross margin on equipment sales
is far lower than our gross margin on printing.  Our expectation for
the future is that our gross margin from printing services will average
approximately 40%, albeit within a range of 33% to 50%, depending on the
components of the business.  If we obtain the funding necessary to
expand our printing capacity, we expect the printing portion of its business to
grow faster than the equipment sales business.  If that occurs,
overall gross margin should increase towards the higher margins that printing
has historically produced.







Operating expenses as a percentage of
revenue decreased from 20% in the first six months of 2007 (11% in the second
quarter) to 10% in the first six months of 2008 and in the quarter ended June
30, 2008.  The primary reason for the decrease was the issuance of
shares to consultants in the 4th quarter
of 2006.  We utilized our equity in this manner in order to acquire
the services of certain leaders in the printing industry.  However the
issuance added a prepaid asset of $2,219,000 to our balance sheet, which we were
required to amortize as expense over the duration of the consulting
agreements.  This was the primary reason that we incurred depreciation
and amortization charges of $676,111 in the first six months of
2007.  Our depreciation and amortization charge for the first six
months of 2008, however, was only $160,959, as several of the consulting
contracts expired in 2007 and, as to the remainder of the contracts, the Company
and the consultants reached agreement at the end of 2007 to cancel future
services.




Our
efforts to improve the efficiency of our marketing operations continued to yield
benefits.  During the first six months of 2008, despite the 50%
increase in revenue, our selling expenses ($174,515 – 2.3% of revenue) decreased
by 23% from the selling expenses recorded in the first six months of 2007
($226,813 – 4.5% of revenue).  The disparity between our fixed costs
and our revenue reflected our ability to increase our production without a
proportionate increase in our administrative overhead.  Similarly we
expect that if we obtain the funds needed to increase our printing production
capacity, the resulting increase in our revenue will not require a corresponding
increase in administrative expense, with the exception that new investment in
equipment will cause an increase in depreciation expense.




In 2006
our operating subsidiary qualified for a two year exemption from Chinese income
taxes.  Commencing in 2008, we will be eligible for three years of
taxation at 50% of the 25% statutory rate.  As a result of this
government allowance, we incurred no income tax in the first six months of 2007,
but were taxed at a 12.5% rate in the first six months of 2008, causing an
expense of $303,351. The tax burden for the quarter ended June 30,
2008 was $167,938.




The
operations of our subsidiary, Harbin Golden Sea, produced $2,123,450
in income during the six months of 2008, and $1,175,560 during the quarter ended
June 30, 2008.  However, because we own only 90% of
Harbin Golden Sea, we deducted a “minority interest” of $212,345 for
the six months and $117,556 for the three months ended June 30, 2008 before
recognizing net income on our Statement of Income and Comprehensive
Income.  After that deduction and taking into account the income and
expenses incurred by the parent corporation, our net income for the first six
months of 2008 was $2,108,856, representing $.10 per share.  In the
first six months of 2007 we realized $961,279 in net income, or $.04 per
share.  Net income for the quarter ended June 30, 2008 was $1,323,348
($.07 per share), compared to $814,818 ($03 per share) in the second quarter of
2007.




Our business operates primarily in
Chinese Renminbi, but we report our results in our SEC filings in U.S.
Dollars.  The conversion of our accounts from RMB to Dollars results
in translation adjustments, which are reported as a middle step between net
income and comprehensive income.  The net income is added to the
retained earnings on our balance sheet; while the translation adjustment is
added to a line item on our balance sheet labeled “accumulated other
comprehensive income,” since it is more reflective of changes in the relative
values of U.S. and Chinese currencies than of the success of our
business.  In the first six months of 2008, the effect of converting
our financial results to Dollars was to add $941,023 to our comprehensive
income.












Liquidity and Capital
Resources




Since our subsidiary,
Harbin Golden Sea, was organized in 1998, the growth of its operations
has been funded by contributions to capital by our Chairman, Mrs.
Tian.  With the $2.4 million that she invested,
Harbin Golden Sea built its facilities and funded its operations,
resulting in profitable operations for the past several years.  As a
result, at June 30, 2008 we had working capital totaling $3,971,680 (an increase
of $1,727,156 since the end of 2007) and no debt.




Despite net income of $2,108,865 during
the first six months of 2008, only $973,908 in cash was provided by our
operations. The disparity between our net income and cash flow from operations
was primarily attributable to the $2,418,655 increase in our trade
receivables resulting from the increase in sales during the six months
ended June 30, 2008.  In addition, we increased our inventories by
$899,980 during the recent six month period in anticipation of continued growth
in sales.




Our cash
position fell by $1,182,092 during the six months ended June 30,
2008.  We applied the greater portion of our cash reserves to our two
recent real estate acquisitions:  a new production facility that we
contracted to purchase for $1,843,800, and a 12 story office building in Harbin
that we purchased for $3,483,465, of which we paid $2,699,850 during
2007.  We are currently considering whether to develop the Harbin
office building as a tourist destination or to sell it.  If we decide
to sell it, the proceeds will be applied to further developing our production
capacity.




Harbin Golden Sea’s
business plan calls for significant investment in the growth of
Harbin Golden Sea during 2008.  We plan to purchase new
equipment for our new production facility.  We also plan to invest in
the development of additional product lines, although the amount that we apply
to that purpose will depend on our success in obtaining investment
capital.  To date, however, we have not received any commitment of
funds.




Our capital is sufficient to fund our
operations at their current level for the foreseeable
future.  Significant growth, however, will require that we obtain
additional capital or incur debt.







Off-Balance
Sheet Arrangements





We do not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition or results of operations.





Risk
Factors That May Affect Future Results





You should carefully consider the risks
described below before buying our common stock.  If any of the risks
described below actually occurs, that event could cause the trading price of our
common stock to decline, and you could lose all or part of your
investment.





I.  Risks
attendant to our business





We may not be able to adequately
protect our intellectual property, which could cause us to be less
competitive.





We are continuously designing and
developing new technology. We rely on a combination of copyright and trade
secret laws and restrictions on disclosure to protect our intellectual property
rights. Unauthorized use of our technology could damage our ability to compete
effectively.  In China, monitoring unauthorized use of our products is
difficult and costly.  In addition, intellectual property law in China
is less developed than in the United States and historically China has not
protected intellectual property to the same extent as it is protected in other
jurisdictions, such as the United States. Any resort to litigation to enforce
our intellectual property rights could result in substantial costs and diversion
of our resources, and might be unsuccessful.





Currency fluctuations may adversely
affect our business.




We generate revenues and (with one
exception) incur expenses and liabilities in Chinese RMB. However we report our
financial results in the United States in U.S. Dollars.  As a result,
we are subject to the effects of exchange rate fluctuations between these
currencies.  Recently, there have been suggestions made to the Chinese
government that it should adjust the exchange rate and end the linkage that in
recent years has held the RMB-U.S. dollar exchange rate constant. If the RMB
exchange rate is adjusted or is allowed to float freely against the U.S. dollar,
our revenues, which are denominated in RMB, may fluctuate significantly in U.S.
dollar terms. We have not entered into agreements or purchased instruments to
hedge our exchange rate risks.





Our business and growth will suffer if
we are unable to hire and retain key personnel that are in high
demand.




Our future success depends on our
ability to attract and retain highly skilled engineers, draftsmen, and
technicians, as well as sales personnel experienced in international
sales.  Qualified individuals are in high demand in China, and there
are insufficient experienced personnel to fill the demand.  Therefore
we may not be able to successfully attract or retain the personnel we need to
succeed.





We may have difficulty establishing
adequate management and financial controls in China.




The People’s Republic of China has only
recently begun to adopt the management and financial reporting concepts and
practices that investors in the United States are familiar with.  We
may have difficulty in hiring and retaining employees in China who have the
experience necessary to implement the kind of management and financial controls
that are expected of a United States public company.  If we cannot
establish such controls, we may experience difficulty in collecting financial
data and preparing financial statements, books of account and corporate records
and instituting business practices that meet U.S. standards.














Capital outflow policies in China
may hamper our ability to pay dividends to shareholders in the United
States.




The
People’s Republic of China has adopted currency and capital transfer
regulations. These regulations require that we comply with complex regulations
for the movement of capital. Although Chinese governmental policies were
introduced in 1996 to allow the convertibility of RMB into foreign currency for
current account items, conversion of RMB into foreign exchange for capital
items, such as foreign direct investment, loans or securities, requires the
approval of the State Administration of Foreign Exchange. We may be unable to
obtain all of the required conversion approvals for our operations, and Chinese
regulatory authorities may impose greater restrictions on the convertibility of
the RMB in the future. Because most of our future revenues will be in RMB, any
inability to obtain the requisite approvals or any future restrictions on
currency exchanges will limit our ability to fund our business activities
outside China or to pay dividends to our shareholders.





We have limited business insurance
coverage.




The insurance industry in China is
still at an early stage of development. Insurance companies in China offer
limited business insurance products, and do not, to our knowledge, offer
business liability insurance. As a result, we do not have any business liability
insurance coverage for our operations. Moreover, while business disruption
insurance is available, we have determined that the risks of disruption and cost
of the insurance are such that we do not require it at this time. Any business
disruption, litigation or natural disaster might result in substantial costs and
diversion of resources.





Our bank deposits are not
insured.




There is no insurance program in the
PRC that protects bank deposits, in the way that bank deposits in the U.S. are
given limited protection by the FDIC.  If the bank in which we
maintain our cash assets were to fail, it is likely that we would lose most or
all of our deposits.




II.  Risks
attendant to our management





The
absence of independent directors on our board of directors may limit the quality
of management decision making.




Each of
the three members of our Board of Directors is also an employee of Harbin Golden
Sea.  There is no audit committee of the board and no compensation
committee.  This situation means that the Board will determine the
direction of our company without the benefit of an objective perspective and
without the contribution of insights from outside observers.  This may
limit the quality of the decisions that are made.  In addition, the
absence of independent directors in the determination of compensation may result
in the payment of inappropriate levels of compensation.





Our business development would be
hindered if we lost the services of our Chairman.




Tian Ling is the Chief Executive
Officer of Xinyinhai Technology, Ltd. and of its operating subsidiary, Harbin
Golden Sea Technology Printing Co., Ltd.  Mrs. Tian is responsible for
strategizing not only our business plan but also the means of financing
it.  If Mrs. Tian were to leave Xinyinhai or become unable to fulfill
her responsibilities, our business would be imperiled.  At the very
least, there would be a delay in the development of Xinyinhai until a suitable
replacement for Mrs. Tian could be retained.








Xinyinhai is not likely to hold annual
shareholder meetings in the next few years.




Management does not expect to hold
annual meetings of shareholders in the next few years, due to the expense
involved.  The current members of the Board of Directors were
appointed to that position by the previous directors.  If other
directors are added to the Board in the future, it is likely that the current
directors will appoint them.  As a result, the shareholders of
Xinyinhai will have no effective means of exercising control over the operations
of Xinyinhai.





Your ability to bring an action
against us or against our directors, or to enforce a judgment against us or
them, will be limited because we conduct all of our operations in China and
because our management resides outside of the United States.




We conduct all of our operations in
China through our wholly-owned subsidiary. All of our directors and officers
reside in China and all of the assets of those Chinese residents are located
outside of the United States. As a result, it may be difficult or impossible for
you to bring an action against us or against these individuals in the United
States in the event that you believe that your rights have been infringed under
the securities laws or otherwise. Even if you are successful in bringing an
action of this kind, the laws of the United States and of China may render you
unable to enforce a judgment against our assets or the assets of our
directors.





ITEM
      3
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.





ITEM
4.         CONTROLS AND
PROCEDURES





Evaluation of Disclosure Controls
and Procedures.  Tian Ling, our Chief Executive Officer, and Du
Song, our Chief Financial Officer, carried out an evaluation of the
effectiveness of the Company’s disclosure controls and procedures as of June 30,
2008.  Pursuant to Rule13a-15(e) promulgated by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, “disclosure
controls and procedures” means controls and other procedures that are designed
to insure that information required to be disclosed by the Company in the
reports that it files with the Securities and Exchange Commission is recorded,
processed, summarized and reported within the time limits specified in the
Commission’s rules.  “Disclosure controls and procedures” include,
without limitation, controls and procedures designed to insure that information
the Company is required to disclose in the reports it files with the Commission
is accumulated and communicated to our Chief Executive Officer and Chief
Financial Officer as appropriate to allow timely decisions regarding required
disclosure.  Based on his evaluation, Mrs. Tian and Ms. Du concluded
that the Company’s system of disclosure controls and procedures was effective as
of June 30, 2008 for the purposes described in this paragraph.





Changes in Internal
Controls.  There was no change in internal controls over
financial reporting (as defined in Rule 13a-15(f) promulgated under the
Securities Exchange Act or 1934) identified in connection with the evaluation
described in the preceding paragraph that occurred during the Company’s second
fiscal quarter that has materially affected or is reasonably likely to
materially affect the Company’s internal control over financial
reporting.








PART
II   -   OTHER INFORMATION





Item
      6.
            Exhibits31.1
            Rule
      13a-14(a) Certification – Chief Executive Officer31.2
            Rule
      13a-14(a) Certification – Chief Financial Officer32
            Rule
      13a-14(b) Certification





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
thereunto duly authorized.





XINYINHAI
      TECHNOLOGY, LTD.Date:
      August 12, 2008
            By:
            /s/ Tian
      LingTian
      Ling, Chief Executive OfficerBy:
            /s/ Du SongDu
      Song, Chief Financial Officer, Chief Accounting
  Officer





*       *       *       *       *