Portfolio unwound; rating placed Under Review

SYNBIOTIC's investment case has changed fundamentally after a wave of insolvencies and liquidations across the portfolio. What began with the Bushdoctor (Austria) insolvency in December 2025 has widened sharply with Hempro International, SOLIDMIND Group and Lean Labs Pharma, alongside the wind-down of the hemp food and feed activities (HANF FARM ceasing operations, Hemp Factory). The common trigger was falling CBD and hemp demand plus regulatory uncertainty, prompting the parent to halt intra-group funding to protect its remaining liquidity. After this clean-up, the operating base is smaller but should also come with a notably reduced fix-cost base (eNuW).

A far narrower core. Going forward, resources concentrate on WEECO Pharma (medical cannabis), alongside MH medical hemp and the Croatian isolate manufacturer Ilesol. Mind you, the latter two remain largely CBD / hemp-extract businesses. Hence, WEECO is in practice the single genuinely de-risked pillar, in our view.

WEECO the key asset. WEECO Pharma (eNuW: ~ 90% of our FY26e sales estimates), a German importer and wholesale platform connecting international medical-cannabis producers, several of them EU-GMP manufacturers, it sits in the structurally growing, regulation-driven end of the market rather than the CBD side that dragged the other units under. Its pharma-oriented, GMP-track profile offers a more defensible margin and a clearer route to scale once the end-market revitalizes (burdened by over-supply following regulatory changes/uncertainty).

Operational base eroded, debt weighs. With most potentially revenue- and cash-generating subsidiaries removed, the group now almost entirely relies on WECCO. While we regard the reset as strategically sensible, i.e. cutting structurally loss-making units lowers recurring cash consumption and sets up a leaner, more focused group, it also raises balance-sheet, liquidity and execution risk, and leaves the equity story dependent on WEECO. Mind you, the German medical cannabis market, especially for value-oriented product groups, is still challenging.

Conclusion: Given the uncertainty around the group structure, the crystallising impairments, remaining liquidity and the path to a sustainable model, we place our rating and price target UNDER REVIEW pending audited accounts and clarity on funding.