After $260 Billion Slide, Alibaba Aims to Show the Worst Is Over

Has the storm passed for Alibaba Group Holding Ltd.?

That will be the question for executives and investors as the Chinese e-commerce giant reports earnings on Thursday in the wake of a government crackdown on co-founder Jack Ma’s empire. Profit and revenue for the quarter are sure to be less consequential than any concrete evidence about whether the regulatory issues are resolved.

Alibaba has agreed to a record $2.8 billion penalty from Beijing and vowed to change certain practices deemed anti-competitive, including a requirement that merchant sell exclusively on its platforms or not at all. Executives also thanked regulators and pledged to support merchants -- all in a bid to put the regulator troubles behind it.

On Monday, Alibaba held its annual staff and family event at its sprawling Hangzhou campus, where kids played in ball pits and drew doodles while the company’s animal mascots posed for photos with employees in cosplay outfits. Chief Executive Officer Daniel Zhang hosted a wedding ceremony for dozens of young couples, according to a corporate video. “No matter when you have good times or challenges, let’s have passion and love, and make our lives and work better,” he told them. Ma was spotted in a blue t-shirt at the festivities, according to photos online, making a rare appearance following a period of enforced hibernation during the worst of Alibaba’s troubles.

But several key issues remain unresolved. Alibaba’s finance affiliate, Ant Group Co., is still wrangling with regulators over its future. Beijing is debating how it will regulate the use of data, which is core to Alibaba’s competitive advantage. And finally, the government is considering whether to compel Alibaba to shed media assets, which have supported its brand -- and Ma’s. The firm has lost roughly $260 billion in value since rising to a record in late October. Its Hong Kong shares rose as much as 4.4% Wednesday, paring losses since the fine was announced to about 1%.

For the record, the financial results are expected to be strong. Revenue for the March quarter is projected to rise 58% to 180.4 billion yuan ($28 billion) -- recovering from a Covid low -- although net income will take a hit from the fine. Here are the key things investors will quiz management about.