Alibaba Group Holding Limited (BABA) may not have significant potential for multiple expansion due to various factors, including VIE structure concerns, slow growth, and intense competition. While investing in Cayman ADRs may provide some exposure to China’s growth, it is important to understand the limitations of such investments. Alibaba’s balance sheet remains healthy, but its ROIC and ROIC-WACC spread are below average compared to peers. Peer group analysis indicates that Alibaba is facing challenges from rapidly growing competitors like PDD Holdings Inc. (PDD) and MercadoLibre. Despite buyback announcements and a strong balance sheet, the market appears to be pricing in higher EPS growth than has been historically achieved. The VIE structure, slow growth, and competition pose risks to Alibaba’s investment thesis. Overall, BABA is considered fairly valued, with a P/E ratio justified by its risk profile and growth prospects.