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Alibaba Group (BABA) is scheduled to report results of its first fiscal quarter of FY22 before the U.S. market opens on Tuesday, Aug. 3, and will hold a conference call to discuss the financial results at 7:30 a.m. ET the same day. Here is what to watch for.

1. "Historic Milestone"

On May 13, the Chinese e-commerce giant reported mixed results, including better-than-expected fourth quarter revenue and adjusted earnings that missed consensus expectations. Alibaba Chairman and CEO Daniel Zhang noted at the time that the company "achieved a historic milestone of one billion annual active consumers globally in the fiscal year, ended March 2021," with the Alibaba ecosystem generating a "record" $1.2 trillion in GMV during its fiscal year.

Maggie Wu, CFO of Alibaba Group, added:

"We surpassed our annual revenue guidance in fiscal year 2021 by achieving strong organic revenue growth of 32% excluding the consolidation of the newly-acquired Sun Art. This was driven by robust performance of our core commerce businesses as well as continued growth of Alibaba Cloud.

"Our adjusted EBITDA grew 25% year-over-year while we increased investments in new businesses and key strategic growth areas. We expect to generate over RMB930 billion in revenue in fiscal year 2022.

"Given the market potential and our proven profit and cash flow generation capabilities, we plan to use all of our incremental profits and additional capital in fiscal year 2022 to support our merchants and invest into new businesses and key strategic areas that will help us increase consumer wallet share and penetrate into new addressable markets."

The next day, Stifel analyst Scott Devitt lowered the firm's price target and kept a Buy rating on the shares after the company reported "mixed" fiscal Q4 results and gave FY22 revenue guidance he said was in-line with the Street's estimate. He moderated his FY22 profitability estimates to account for higher investment spending, but he maintains his favorable long-term view of Alibaba, Devitt added.

Citi analyst Alicia Yap similarly lowered the firm's price target but kept a Buy rating on the shares, noting that adjusted EBITA for core commerce came in slightly below estimates as investment in community marketplaces and Taobao Deals widened the total loss from new initiatives. While the stepped-up investment should not be a surprise, the market "seems to need more time to digest" management's message, said the analyst at the time.

More recently, Deutsche Bank analyst Vitus Leung lowered the firm's price target on Alibaba to $281 and kept a Buy rating on the shares as he got the impression after catching up with the company that its June quarter earnings would be masked by growing investment spending.

He expects overall revenue growth of 33% year-over-year, noting that he expects Alibaba's revenue growth to continue to beat GMV growth, but also noting that his revenue view is 4% below consensus estimates.

2. DIDI, After-School Tutoring Crackdowns 

On June 30, Chinese ride-sharing giant DiDi Global (DIDI) opened at $16.65 after its initial public offering was priced at $14 per share. Just days later, the Cyberspace Administration of China announced a probe of the company's cyber security.

According to a translation of a post to the CAC site, the regulator stated:

"In order to prevent national data security risks, maintain national security, and protect the public interest, in accordance with the National Security Law of the People's Republic of China and the Cybersecurity Law of the People's Republic of 'Implement a cyber security review. In order to cooperate with the network security review work and prevent risks from expanding, 'Didi Travel' stopped new user registration during the review period."

Subsequently, The Wall Street Journal's Lingling Wei and Keith Zhai reported, citing people familiar with the matter, that China's cybersecurity watchdog suggested the Chinese ride-hailing giant delay its initial public offering and urged it to conduct a thorough self-examination of its network security weeks before DiDi Global went public in the U.S.

Shares of TAL Education Group (TAL) and New Oriental Education & Technology (EDU) are also down about 90% this year as China's crackdown on the tutoring sector has upended their businesses. After Chinese stocks tumbled in reaction to regulators' latest focus on after-school tutoring companies, investors have recognized the increased risk that China-based companies trading in the U.S. have embedded, Reshma Kapadia wrote in this week's edition of Barron's.

Those risks will remain elevated until more clarity on China's regulatory push emerges, the author contends. Anti-monopoly efforts and increased data scrutiny have "painfully illustrated how even fundamentally sound investments can quickly turn into losers when the state steps in," and "forced a reassessment" of the growth prospects of Alibaba and Tencent (TCEHY), the report said.

3. Sign of Thawing?

On July 30, SEC Chair Gary Gensler issued a statement on investor protection related to recent developments in China. He stated in part:

"In light of the recent developments in China and the overall risks with the China-based VIE structure, I have asked staff to seek certain disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective.

"In addition to this specific guidance, we will continue to hold all companies to the securities laws' high standards for complete and accurate disclosure. Further, I also have asked staff to engage in targeted additional reviews of filings for companies with significant China-based operations. I believe these changes will enhance the overall quality of disclosure in registration statements of offshore issuers that have affiliations with China-based operating companies."

Noting that the SEC has outlined additional disclosure requirements for China-based companies seeking to list on the U.S. securities market, a spokesperson for the China Securities Regulatory Commission issued a response on Aug. 1 that stated in part:

"The capital markets in China and the U.S. both have global significance and are increasingly interconnected. As growing numbers of companies, investors, and financial services providers are participating in each other’s markets, strengthening regulatory cooperation is the inevitable path.

"We’ve taken notice of the recent statement made by the SEC, especially the new disclosure requirements for registration filers. It is our belief that Chinese and U.S. regulators shall continue to enhance communication with the principle of mutual respect and cooperation, and properly address the issues related to the supervision of China-based companies listed in the U.S., so as to form stable policy expectations and create benign rules framework for the market.

"China is unswervingly committed to its basic state policy of reform and opening-up. The financial services sector of China will open wider to the outside world and more opening-up measures will be rolled out to serve the high-quality development of China’s capital markets."