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Alibaba Group Holding Ltd.’s revenue beat estimates after China’s e-commerce leader rode a post-pandemic recovery and begins to move past a bruising antitrust investigation.

Jack Ma’s flagship e-commerce firm reported revenue of 187.4 billion yuan ($29 billion), compared with the 180.4 billion yuan average of analysts’ estimates. But it swung to a 5.5 billion yuan net loss, after the company swallowed a $2.8 billion fine for monopolistic behavior imposed by Beijing. It forecast revenue of more than 930 billion yuan for the coming year.

Executives have sought to put behind them a crackdown on Ma’s internet empire that’s shaved $260 billion off the Chinese internet behemoth’s market value. The $2.8 billion fine marked the conclusion of a four-month probe, but the threat of future action will likely cast a shadow over Alibaba’s business for some time.

Following the fine, Alibaba joined 33 other tech firms in pledging to abide by monopoly laws and eradicate abuses like forced exclusivity agreements. The government has also pushed for greater control over the invaluable online data amassed by its internet giants that have enabled their meteoric expansion over the past decade. Antitrust watchdogs are screening its previous investments and could force a divestment if deemed in violation of regulations.

What Bloomberg Intelligence Says:

Alibaba’s regulatory overhang may lift with China’s $2.8 billion fine in April potentially marking an end to the worst of the scrutiny that began in late 2020. Meanwhile it could continue to benefit from the accelerated user and merchant adoption of its online grocery shopping, cloud computing and remote-work applications in the aftermath of the pandemic. Longer-term sales and profit growth could be driven by global expansion and the monetization of newer business segments such as logistics, media and entertainment.

-- Vey-Sern Ling and Tiffany Tam, analysts

Alibaba is keen to convey the impression that it’s back to business as normal. Ma was spotted this week at an annual staff and family celebration at its sprawling Hangzhou campus, where kids played in ball pits while company mascots posed for photos with employees in cosplay. But several key issues remain unresolved as China continues to rein in Alibaba and its increasingly powerful rivals from Tencent Holdings Ltd. to Meituan.

Alibaba’s finance affiliate -- Ant Group Co., a major provider of financing for Alibaba’s consumers -- is still wrangling with regulators over a forced restructuring that could curb its lending. Beijing is debating how it will regulate control and ownership of online data, core to Alibaba’s competitive advantage. And finally, the government is said to be considering whether to compel Alibaba to shed media assets that have supported its brand.

Alibaba’s shares fell 3.2% in Hong Kong before the results were released. The stock is down 31% from its October peak, just before regulators jettisoned Ant’s $35 billion initial public offering and launched its probe into the company.


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