Alibaba Group Holding Ltd’s first full quarterly report card to Wall Street investors today will be scrutinised by the hopeful seeking validation for lofty stock price targets and studied by the few sceptics searching for inauspicious signs.

Coming off Alibaba’s record-breaking $25 billion IPO in September, the company’s shares have remained 45 per cent above their debut price. Just about every brokerage has rated the e-commerce giant a buy, taking comfort in the group’s dominant position in a $450 billion Chinese market.

Investors have been all too eager to overlook a structure that critics say allows its management extraordinary decision-making power, potentially to the detriment of shareholders. They have also mostly withheld judgement on how advertising spending and sales commission fees, where Alibaba makes the lion’s share of its money, are being affected in a slowing Chinese economy.

Instead, their focus is on Alibaba’s profit margins, among the fattest in the global e-commerce industry and far outstripping those of loss-making Amazon. Reflecting the positive sentiment, the firm’s forward price-to-earnings ratio is pegged at more than 45.

“The stock is now trading at a pretty high multiple, and in order to justify that, they need to show really strong results out of the gate,” said Wedbush Securities’ Gil Luria.

While major shareholder Yahoo Inc. has included basic figures such as Alibaba’s revenue and earnings per share every quarter, today marks the Chinese company’s first full-fledged results release.

Net profit is expected at $1.17 billion in the quarter ended September, according to a Thomson Reuters SmartEstimate poll of 21 analysts. Fully reported earnings per share are forecast to be at 36 cents, based on a poll of 25 analysts. Wall Street will keep its eye peeled for any sign that runaway growth is waning.

While Alibaba can depend on its still-growing home market for years to come, expanding internationally will be difficult given its marginal presence in foreign markets, which now yield just about 9 per cent of overall sales, analysts say.

At home, JD.com Inc. is chipping away at its market share, using an Amazon-like model where it builds its own warehouses and handles logistics. Alibaba’s marketplace model, relinquishing control over logistics, may hurt it in the long run by putting product quality at risk.

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