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

In addition to historical information, this Form 10-Q contains forward-looking
statements. Forward-looking statements are based on our current beliefs and
expectations, 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, the investor 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-Q. We undertake no obligation to publicly update or revise any
forward-looking statement in light of new information, future events, or other
occurrences.

There are several risks and uncertainties, including those relating to our
ability to raise money and grow our business and potential difficulties in
integrating new acquisitions with our current operations, especially as they
pertain to foreign markets and market conditions. These risks and uncertainties
can materially affect the results predicted. The Company's future operating
results over both the short and long term will be subject to annual and
quarterly fluctuations due to several factors, some of which are outside our
control. These factors include but are not limited to fluctuating market demand
for our services, and general economic conditions.

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

OVERVIEW


In October 2004, the former shareholders 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 share exchange. Before
the completion of the share exchange, 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 shareholders
retain the majority voting interest in the combined business 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 equity information 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"), Shanghai Shang Yang Real Estate
Consultation Company, Ltd. ("SHSY"), Suzhou Gao Feng Hui Property Management
Company, Ltd, ("SZGFH"), Suzhou Shang Yang Real Estate Consultation Company
("SZSY"), Suzhou Xin Ji Yang Real Estate Consultation Company, Ltd. ("SZXJY"),
Linyi Shang Yang Real Estate Development Company Ltd ("LYSH"), Shangqiu Shang
Yang Real Estate Consultation Company, Ltd., ("SQSY"), Wuhan Gao Feng Hui
Consultation Company Ltd.(WHGFH), Sanya Shang Yang Real Estate Consultation
Company, Ltd. ("SYSH"), Shanghai Rui Jian Design Company, Ltd., ("SHRJ"), Wuhan
Yuan Yu Long Real Estate Development Company, Ltd. ("WHYYL"), and Shanghai Da Er
Wei Trading Company Limited ("SHDEW") are sometimes hereinafter collectively
referred to as "the Company", "we", "our", or "us".

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The principal activities of the Company are real estate agency sales, real estate marketing services, real estate investments, property leasing services, property management services, and real estate development in the PRC.

RECENT DEVELOPMENTS



Our major business is real estate agency sales, real estate marketing services,
real estate investments, property leasing services, property management
services, and real estate development in the PRC. Additionally, we expand our
business to the field of financial activities such as entity investment, fund
management, financial services and so on.

Since we started our agency sales operations in 2001, we have established a
reputation as a sales and marketing agency for new projects. With our
accumulated expertise and experience, we intend to take a more aggressive role
by participating in property investments. We plan to select property developers
with outstanding qualifications as our strategic partners, and continue to build
strength in design, planning, positioning and marketing services.

In October 2011, we established LYSY and own 34% of the company. During the
first quarter of 2012, we acquired approximately 103,385 square meters for the
purpose of developing villa-style residential housing. The LYSY project has
divided into three phases. Phase 1 has completed construction of 121 units in
May 2015 and sold 119 units out of all 121 units at the end of October 31, 2022.
Phase 2 was divided into north and south area and completed construction of 84
units at the end of 2020. All 84 units have been sold during phase 2 by the end
of October 31, 2022. Phase 3 began construction in first quarter of 2021and
pre-sold 20 units out of 51units as of October 31, 2022. In September 2020, the
Company expanded the Linyi project by purchasing additional 54,312 square meters
in the amount of 228 million RMB for future development.

On March 13, 2014, the Company signed a joint development agreement with Zhongji
Pufa Real Estate Co. ("SHGXL"). According to this agreement, the Company has
obtained a right to develop the Guangxinglu ("GXL") project, located at 182 lane
Guangxinglu, Putuo district, Shanghai, PRC. This project covers a site area of
approximately 2,502 square meters for the development of one apartment building.
In 2016, the government issued a regulation prohibiting the by-unit sale of
commercial-use buildings. The apartment unit sale for the GXL project was put on
hold until the government reviewed our project's status. During that time, we
rented any unsold apartment units while not recognizing the units previously
sold before the regulation. In March 2019, we received government confirmation
that our project cannot be sold on a unit-by-unit basis going forward. The
Company decided to continue operating the project by renting the units. These
unsold units are recognized as investment in properties in Note 8. We also
recognized all the units that were sold before the regulation in our financial
statement for the fiscal year ended December 31, 2019.

SHDEW was established in June 2013 with its business as a skincare and cosmetic
company. SHDEW's online Wechat stores had a membership of over ten million
members as of October 31, 2022. SHDEW develops its own skincare products as well
as improving its online ecommerce platform. SHDEW sells products under its own
brands as well as the products from third parties. The products include
skincare, cosmetics, personal care products such as soaps, shampoos, skin care
devices and children's apparel. SHDEW has an online shopping app, "???," where
consumers can purchase its cosmetics and skincare products as well as products
imported into China.

In October 2018, HATX purchased the property in Huai'an, Qingjiang Pu district
with an area of 78,030 square meters. In December 2018, we established HAZB with
a 78.46% ownership for the purpose of real estate investment and in March 2019,
HAZB purchased 100% of HATX and its land usage rights to the Huai'an property.
The Huai'an project, named Tianxi Times, started its first phase development in
early 2019 with a GFA of 82,218 sqm totaling 679 units, and started its second
phase in 2020 with a GFA of 99,123 sqm totaling 873 units. As of September 30,
2022, the Company sold and 669 units out of 679 units of the first phase and
sold and pre-sold 80 units and 284 units, respectively, out of 873 of the second
phase.

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RECENTLY ADOPTED ACCOUNTING STANDARDS



In February 2016, the FASB issued ASU 2016-02 which establishes new accounting
and disclosure requirements for leases. ASU No. 2016-02 requires recognition in
the statement of operations of a single lease cost, calculated so that the cost
of the lease is allocated over the lease term, generally on a straight-line
basis. ASU 2016-02 requires classification of all cash payments within operating
activities in the statement of cash flows. Disclosures are required to provide
the amount, timing and uncertainty of cash flows arising from leases. The
Company adopted ASU 2016-02 in the first quarter of 2022 using the effective
date approach to recognize and measure leases as of the adoption date. The
Company has elected to utilize the available practical expedient to not separate
lease components from non-lease components as well as the package of practical
expedients that allows the Company not to reassess (1) whether any expired or
existing contracts as of the adoption date are or contain a lease, (2) lease
classification for any expired or existing leases as of the adoption date and
(3) initial direct costs for any existing leases as of the adoption date. At the
date of adoption on January 1, 2022, this guidance had no impact to the
Company's condensed consolidated financial statements.

In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2020-06, Debt-Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own
Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts
in an Entity's Own Equity, which, among other things, provides guidance on how
to account for contracts on an entity's own equity. This ASU eliminates the
beneficial conversion and cash conversion accounting models for convertible
instruments. It also amends the accounting for certain contracts in an entity's
own equity that are currently accounted for as derivatives because of specific
settlement provisions. In addition, this ASU modifies how particular convertible
instruments and certain contracts that may be settled in cash or shares impact
the diluted EPS computation. The amendments in this ASU are effective for the
public companies for fiscal years beginning after December 15, 2021, including
interim periods within those fiscal years. Early adoption is permitted, but no
earlier than fiscal years beginning after December 15, 2020. The Company adopted
this standard on January 1, 2022, which had no material impact to the Company's
condensed consolidated financial statements.

NEW ACCOUNTING PRONOUNCEMENTS


Accounting standards that have been issued or proposed by FASB that do not
require adoption until a future date are not expected to have a material impact
on the financial statements upon adoption. The Company does not discuss new
accounting pronouncements that are not anticipated to have an impact on or are
unrelated to its financial condition, results of operations, cash flows or
disclosures.

APPLICATION OF CRITICAL ACCOUNTING POLICIES



Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements. These financial statements
are prepared in accordance with generally accepted accounting principles in the
United States ("U.S. GAAP"), which requires us to make estimates and assumptions
that affect the reported amounts of our assets and liabilities and revenues and
expenses, to disclose contingent assets and liabilities on the date of the
consolidated financial statements, and to disclose the reported amounts of
revenues and expenses incurred during the financial reporting period. The most
significant estimates and assumptions include revenue recognition, and the
useful lives and impairment of property and equipment, and investment
properties, the valuation of real estate property under development, the
recognition of government subsidies, and the provisions for income taxes. We
continue to evaluate these estimates and assumptions that we believe to be
reasonable under the circumstances. We rely on these evaluations as the basis
for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Since the use of estimates is an
integral component of the financial reporting process, actual results could
differ from those estimates. Some of our accounting policies require higher
degrees of judgment than others in their application. We believe critical
accounting policies as disclosed in this Form 10-Q reflect the more significant
judgments and estimates used in preparation of our consolidated financial
statements. We believe there have been no material changes to our critical
accounting policies and estimates.

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our condensed consolidated financial statements.



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Revenue Recognition

Most of the Company's revenue is derived from real estate sales in the PRC. The
majority of the Company's contracts contain a single performance obligation
involving significant real estate development activities that are performed
together to deliver a real estate property to customers. Revenues arising from
real estate sales are recognized when or as the control of the asset is
transferred to the customer. The control of the asset may transfer over time or
at a point in time. For the sales of individual condominium units in a real
estate development project, the Company has an enforceable right to payment for
performance completed to date, revenue is recognized over time by measuring the
progress towards complete satisfaction of that performance obligation.
Otherwise, revenue is recognized at a point in time when the customer obtains
control of the asset.

All revenues represent gross revenues less sales and business tax.


ASC 606 requires an entity to recognize revenue when it transfers promised goods
or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. ASC
606 creates a five-step model that requires entities to exercise judgment when
considering the terms of the contract(s) which include (i) identifying the
contract(s) with the customer, (ii) identifying the separate performance
obligations in the contract, (iii) determining the transaction price,
(iv) allocating the transaction price to the separate performance obligations,
and (v) recognizing revenue when each performance obligation is satisfied. ASC
606 also specifies the accounting for the incremental costs of obtaining a
contract and the costs directly related to fulfilling a contract. In addition,
ASC 606 requires extensive disclosures.

The Company adopted ASC 606 on January 1, 2018 using the modified retrospective
approach with no restatement of comparative periods and no cumulative-effect
adjustment to retained earnings recognized as of the date of adoption. A
significant portion of the Company's revenue is derived from development and
sales of condominium real estate property in the PRC, with revenue previously
recognized using the percentage of completion method. Under the new standard, to
recognize revenue over time similar to the percentage of completion method,
contractual provisions need to provide the Company with an enforceable right to
payment and the Company has no alternative use of the asset. Historically, all
contracts executed contained an enforceable right to home purchase payments and
the Company had no alternative use of assets, therefore, the adoption of ASC 606
did not have a material impact on the Company's consolidated financial
statements.

Real Estate Property under Development


Real estate property under development, which consists of residential unit sites
and commercial and residential unit sites under development, is stated at the
lower of carrying amounts or fair value less selling costs.

Expenditures for land development, including cost of land use rights, deed tax,
pre-development costs and engineering costs, are capitalized and allocated to
development projects by the specific identification method. Costs are allocated
to specific units within a project based on the ratio of the sales value of
units to the estimated total sales value times the total project costs.

Costs of amenities transferred to buyers are allocated as common costs of the
project that are allocated to specific units as a component of total
construction costs. For amenities retained by the Company, costs in excess of
the related fair value of the amenity are also treated as common costs. Results
of operations of amenities retained by the Company are included in current
operating results.

In accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), real
estate property under development is subject to valuation adjustments when the
carrying amount exceeds fair value. An impairment loss is recognized only if the
carrying amount of the assets is not recoverable and exceeds fair value. The
carrying amount is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to be generated by the assets.

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Income Taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Under the
asset and liability method of ASC 740, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statements carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period the enactment occurs. A valuation allowance
is provided for certain deferred tax assets if it is more likely than not that
the Company will not realize tax assets through future operations. Deferred tax
assets or liabilities were off-set by a 100% valuation allowance; therefore
there has been no recognized benefit as of September 30, 2022 and December

31,
2021.

RESULTS OF OPERATIONS

We provide the following discussion and analyses of our changes in financial
condition and results of operations for the period ended September 30, 2022 with
comparisons to the period ended September 30, 2021.

Revenue

The following table shows the net revenue detail by line of business:



                                           Three Months Ended September 30,                                    Nine Months Ended September 30,
                               2022       % to total      2021       % to total    % change       2022       % to total       2021       % to total    % change
Property management            440,717             2      374,292             6          18       873,352             1     1,002,290             7        (12)
House sales                 21,902,972            98    5,554,527          

 94         294    68,234,397            99    13,293,463            93         413
Net revenues                22,343,689           100    5,928,819           100         277    69,107,749           100    14,295,753           100         383


The net revenue for the third quarter of 2022 was $22,343,689, which increased
277% from $5,928,819 from the third quarter of 2021. The net revenue for the
first three quarters of 2022 was $69,107,749, which represented a increase of
383% from $14,295,753 from the first three quarters of 2021. For the third
quarter of 2022, property management and house sales represented 2% and 98% of
our net revenues, respectively. For the first three quarters of 2022, property
management and house sales represented 1% and 99% of our net revenues,
respectively. The increase in net revenue for the first three quarters of 2022
was mainly due to the recognition of revenue of Huaian Tianxi project at a
certain portion.

Property Management



Property management represented 1% of our revenue for the first three quarter of
2022 and revenue from property management decreased by 12% compared with the
same period in 2021.

House sales

For the first three quarters of 2022, the Company has recognized house sales of
Huaian Tianxi project at a certain portion. House sales represented 99% of our
revenue for the first three quarters of 2022.

Cost of Revenue

The following table shows the cost of revenue detail by line of business:



                                          Three Months Ended September 30,                                    Nine Months Ended September 30,
                              2022       % to total      2021       % to total    % change       2022       % to total       2021       % to total    % change
Property management           383,745             2    4,187,784           

 9         (8)     1,175,877             2     1,228,121            10         (4)
House sales                18,920,023            98    4,056,273            91         366    59,658,118            98    10,677,417            90         458
Cost of revenues           19,303,768           100    4,475,051           100         331    60,833,998           100    11,905,538           100         410


The cost of revenue for the third quarter of 2022 was $19,303,768, which
increased 331% from $4,475,051 during the third quarter of 2021. The cost of
revenues for the first three quarters of 2022 was $60,833,998, which increased
410% from $11,905,538 during the first three quarters of 2021. For the third
quarter of 2022, property management, and house sales represented 2% and 98% of
our cost of

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revenue, respectively. For the first three quarters of 2022, property
management, and house sales represented 2% and 98% of our cost of revenue,
respectively. The increase in the cost of revenue in the third quarter and in
the first three quarters of 2022 was mainly due to the company recognized the
cost of revenue of Huaian Tianxi project at a certain portion.

Property management

The cost of revenue for property management for the first three quarters of 2022 was $11,175,877, a decrease of 4% from $1,228,121 in the same period in 2021.

House sales

For the first three quarters of 2022, the Company has recognized house sales of cost of revenue of Huaian Tianxi project at a certain portion. House sales represented 98% of our revenue for the first three quarters of 2022.

Operating Expenses

The following table shows operating expenses detail by line of business:



                                           Three Months Ended September 30,                                Nine Months Ended September 30,
                               2022      % to total     2021      % to total    % change      2022       % to total      2021       % to total    % change
Property management           345,750            65    165,805            30         108      801,036            53      683,995            28          17
House sales                   187,685            35    387,860            70        (52)      703,341            47    1,781,856            72        (60)
Operating expenses            533,435           100    553,665           100         (4)    1,504,377           100    2,465,851           100        (38)


The operating expenses for the third quarter of 2022 were $533,435, which
decreased 4% from $553,665 for the same period in 2021. The total operating
expenses for the first three quarters of 2022 were $1,504,377, which decreased
38% from $2,465,851 for the same period in 2021. For the third quarter of 2022,
property management and house sales represented 65%, and 35% of the total
operating expenses, respectively. For the first three quarters of 2022, property
management and house sales represented 53%, and 47% of the total operating
expense, respectively. The decrease in the overall operating expense resulted
from the decrease in property management for the third quarter and the first
three quarters of 2022.

Property management


The operating expenses for property management for the first three quarters of
2022 were $801,036, an increase of 17% from $683,995 in the same period in 2021.
The decrease is mainly due to the consulting expenses relating to the business.

House sales


The operating expenses for house sales for the first three quarters of 2022 were
$703,341 which decreased 60% from $1,781,856 in the same period in 2021. The
increase is mainly due to the operations of HATX project.

General and Administrative Expenses

General and administrative expenses in the first three quarters of 2022 were $2,613,218, a decrease of 9% from $2,878,477, in the same period in 2021.

Other income, net


Other loss for the first three quarters of 2022 was $2,984,763, a decrease of
91% from $33,981,064 for the same period in 2021. The decrease in income was
mainly due to the lack of dividend received from SHDEW and the loss of
transactional financial assets.

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Major Related Party Transaction



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 directors

The total amount due to directors for September 30, 2022 was $449,840. The amounts due are as follows:

Amount due to Lin Chi-Jung

The balances due to Lin Chi-Jung consists of temporary advances at the amount of $429,424 and are unsecured, interest-free and have no fixed term of repayment.

Amount due to Lin Hsin Hung

The amount of $20,415 represents the salary payable to Lin Hsin Hung.

Amount due to affiliate

The amount due to SHSJ and JXSY, in the amount of $48,784,962 and $499,317, were intercompany transfers for day to day operation.

LIQUIDITY AND CAPITAL RESOURCES



For the first three quarters of 2022, our principal sources of cash were
revenues from our house sales collection and property management business, as
well as the dividend receipt from the affiliates. Most of our cash resources
were used to fund our property development investment and revenue related
expenses, such as salaries and commissions paid to the sales force, daily
administrative expenses and the maintenance of regional offices.

We ended the period with a cash position of $10,607,248.

The Company's operating activities used cash in the amount of $2,403,359, which was primarily attributable to the recognizing revenue of the real estate project.

The Company's investing activities used cash resources of $28,505,003, which was primarily attributable to the investment in transactional financial assets.

The Company's financing activities provided cash resources of $19,588,608, which was primarily attributable to the restricted cash of our real estate developments.



The potential cash needs for 2022 are for investment in transactional financial
assets, construction for our development projects in the Huai'an project (HATX)
and the Linyi project.

According to the public records, the Market Supervision Administrations of
Baokang County, which is a county located within Xiangyang City, Hubei Province,
China, is conducting an investigation into the business practices of SHDEW and
some of its affiliates. SHDEW is in the business of selling cosmetics and other
consumer goods online. While we own approximately 19.91% of SHDEW, we do not
have any control or influence over its business practices. We are not related to
this investigation, and we are unable to evaluate the merits of any allegations.
At this stage, we are also unable to evaluate the impact on our future cash flow
resulting from this investigation.

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Capital Resources

Considering our cash position, available credit facilities and cash generated
from operating activities, we believe that we have sufficient funds to operate
our existing business for the next twelve months. If our business otherwise
grows more rapidly than we currently predict, we plan to raise funds through the
issuance of additional shares of our equity securities in one or more public or
private offerings. We will also consider raising funds through credit facilities
obtained with lending institutions. There can be no guarantee that we will be
able to obtain such funds through the issuance of debt or equity or obtain funds
that are with terms satisfactory to management and our board of directors.

OFF BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

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