Original-Research: SYNBIOTIC SE (von NuWays AG): BUY

Classification of NuWays AG to SYNBIOTIC SE

Temporary headwinds from regulatory uncertainty; chg. est.

To recap: SYNBIOTIC is a European holding company active in the medical cannabis and industrial hemp markets with twelve holdings. Following the recent organizational restructuring, the group is now positioned along the end-market value chains, ranging from cultivation to processing, product development, and distribution. This structure enables SYNBIOTIC to leverage synergies across its portfolio and maintain control over key value-adding steps within its business model.

Short-term headwinds. While the company recorded a good start to the year, particularly within the Medical Cannabis segment, which strongly benefited from last year’s regulatory changes, demand has recently softened. This can be explained by significantly more cautious order behavior from customers, particularly online pharmacies, as a direct result of the proposed regulatory step back. The proposal would prohibit the distribution of medical cannabis through online channels and restrict the issuance of digital prescriptions via telemedicine, both important drivers of growth so far. In parallel, the anticipated liberalization of industrial hemp, which was expected to unlock additional growth opportunities, has so far not materialized.

As a consequence, SYNBIOTIC reduced its FY25 guidance to € 17m in sales (old: € 30m, eNuW old: € 23m) and now expects an EBITDA loss of € 1.5m (old: € 1.7m profit, eNuW old: € 1.8m profit). This marks a notable downward revision, reflecting both softer market dynamics and the cautious stance of management in light of ongoing political uncertainty.

Looking ahead, we continue to expect SYNBIOTIC to remain on a growth path. Assuming the proposed regulatory changes in the medical cannabis market are implemented, we would anticipate lower new patient growth rates and a moderate deterioration of the existing patient base as online access becomes restricted. Nonetheless, SYNBIOTIC should begin to reap the benefits of its recent product development activities. Notably, the company has developed a cannabis pastille, offering an alternative form of THC administration that improves dosing accuracy and patient convenience. The product is expected to reach the market in early 2026 and could represent a meaningful addition to SYNBIOTIC’s medical portfolio.

At the same time, we view the delays in industrial hemp liberalization as temporary. The expected legislative changes should create a more supportive environment for hemp-based consumer products, thereby enhancing SYNBIOTIC’s growth prospects from 2026 onwards. Overall, we forecast the group’s top line to reach € 25m by 2027e, implying a 16% CAGR (2025–27e), alongside an EBITDA of € 1.2m, as profitability gradually recovers with improved scale and operating leverage.

We confirm our BUY rating with a new € 6.00 PT (old: € 12.40) based on DCF as we take a notably more conservative stand to account to uncertainties going forward.