Daily Brief Health Care: Innovent Biologics Inc, Monash IVF, UltraGreen.ai, 3SBio Inc, Green Thumb Industries and more

• Following two periods of profitability, Innovent Biologics Inc (1801 HK) will be added to the Hang Seng Index (HSI INDEX) at the close on 5 December.
• Innovent Biologics Inc (1801 HK) is also an add to the Hang Seng China Enterprises Index (HSCEI INDEX) in December, so this inclusion increases the flow and impact.
• Estimated one-way turnover is 2.3% and the estimated round-trip trade is HK$9.2bn (US$1.2bn). Big capping outflows for Alibaba (9988 HK) at the December rebalance.

• The AFR reports that a mystery buyer, believed to be Genesis Capital, will launch a takeover proposal for Monash IVF (MVF AU) at A$0.80, a 31.1% premium to the last close.
• On Friday, the mystery buyer acquired a pre-bid stake of 6.01% of outstanding shares at A$0.80. The timing is opportunistic as the shares are down 51% YTD.
• It is unclear whether Genesis is aiming to launch a scheme or an off-market takeover offer. Nevertheless, the rumoured offer is light. 

• UltraGreen.ai’s IPO valuation of US$1.6 billion is 6x the total 2030 market size for FGS systems. Such valuation is not based on current financial performance but on future growth expectations.
• For UltraGreen.ai to justify its valuation, it would need to capture a dominant/growing share of this expanding market. This creates a high risk of valuation correction if growth is slower-than-expected.
• The entire AI sector has been full of bubble.A market-wide correction could impact UltraGreen.ai’s valuation regardless of its individual performance.US$1.3bn is a comfortable valuation for us to invest in UltraGreen.ai.

• 3SBio Inc (1530 HK) proposed to spin-off and separately list the shares of Mandi, a subsidiary of the company.
• In 2024 and 1H25, Mandi contributed 16% and 17% of total consolidated sales respectively, while its EBITDA contribution was 14.4% (in 2024) and 11.5% (in 1H25).
• As far as 3SBio (ex-Mandi) is concerned, marketing approvals for key pipeline product like SSGJ-608, along with indication expansion, geographical expansion of few drugs will be key in near term.

• Leading U.S. Multi-State Operator with Strong Brand Portfolio: Green Thumb Industries is a vertically integrated cannabis company with a significant presence across 14 U.S. states, operating over 100 retail stores and 20 manufacturing facilities. Its brand portfolio, including Rythm, &Shine, and Dogwalkers, is well-recognized and caters to a wide range of consumers.
• Path to Profitability and Positive Cash Flow: Unlike many peers in the cannabis industry, Green Thumb has demonstrated a consistent ability to generate positive net income and operating cash flow. This financial discipline allows for strategic expansion and investment in its brands and retail footprint.
• Positioned for Future Growth from Regulatory Tailwinds: The ongoing trend of cannabis legalization at the state level and the potential for federal rescheduling present significant growth opportunities. Green Thumb’s established presence in key limited-license states positions it to capitalize on these regulatory shifts.

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