By M. Marin
NASDAQ:SBC
READ THE FULL SBC RESEARCH REPORT
Company positive about impact of recent measures, including strategic M&A
SBC Medical Group Holdings (NASDAQ:SBC), which provides end-to-end solutions enabling aesthetics clinics to launch, expand and/or operate their businesses, is expected to report 2Q25 results within the next few weeks. We believe management’s remarks from our recent virtual meeting for their presentation at the OTC Life Sciences Investor Forum provides insight into ongoing trends. The company is diversifying to support a broader range of franchisee services, which SBC expects will strengthen its position and market share within the aesthetic and specialized medical care areas.
The company intends to strengthen its market position both through organic measures and strategic M&A. Earlier this month, the company acquired MB career lounge, which provides management support services for medical institutions and specializes in consulting, training, and human resources solutions in Japan. Moreover, SBC has outlined multiple organic strategies to counter intensifying competition in Japan's aesthetic medicine market as new competitors have entered the market. SBC intends to maintain strong growth by implementing strategic pricing models and expanding its footprint in order to continue to increase its customer base. The company has also revised its franchise fee structure beginning in April 2025 to make it easier financially for franchisees to join its network as they ramp services and customer bases, with a tiered fee system aligned with scale.
The Japanese market continues to grow and management believes penetration of aesthetic services remains low at about 10%, indicating substantial opportunities for growth. The primary demographic traditionally has been women in their late teens to 30s. The company anticipates growing demand from older women seeking anti-aging treatment, as well as from men who are increasingly seeking aesthetic procedures. To benefit, SBC intends to maintain its multi-brand strategy to retain the flexibility to respond to the diverse needs of a growing customer base that is expanding to various population demographics.
SBC plans to maintain its footprint growth strategy. The number of customers served in 1Q25 reached 6.1 million, up 14% year-over-year. Total revenue per customer, however, was impacted by the strategic price initiatives amid an intensified competitive backdrop. SBC expects the aesthetic dermatology market to continue expanding in 2025. In Japan, demand for aesthetic medical treatments has grown in recent years, partially reflecting the impact of social media, with celebrities and influencers publicizing their own cosmetic procedures. Moreover, demographic trends, including changes in the average age of the population, as well as lifestyle and other changes, are also factors driving demand for aesthetic medical services. Younger and middle-aged people appear to be more interested in elective cosmetic procedures. Strong market dynamics have attracted new entrants, and the growth in the number of clinics operating in the market has outpaced overall revenue expansion, making conditions more competitive. SBC expects the aesthetic dermatology market and competition to continue expanding in 2025.
New service offerings; Expanding social media outreach to medical tourists China
Other medical services that the company is focused on include orthopedics, ophthalmology, infertility, and health treatment, in addition to aesthetic medicine. SBC believes this will create a holistic offering that appeals to a broad range of patient needs.
At the same time, the company is enhancing its multilingual support to be responsive to visitors from China and other countries seeking treatment, and also using social media as an outreach tool to accelerate customer acquisition efficiently. The company is also enhancing its presence on social media, particularly in China, which management noted has led to an increase in visits and revenue from foreign medical tourists. In addition, the company is strengthening its language support infrastructure by hiring more interpreters to provide positive experiences for international customers. The company expects that efforts will not only diversify revenue sources but also position SBC as a prime destination for medical tourists seeking aesthetic and other services.
Multi-brand strategy
The company also believes its multi-brand strategy will address the increasingly diverse needs of its growing customer base. By customizing services across multiple brands, the company expects to segment the market and garner more market share overall. In April 2025, SBC launched a new brand for the SBC NEO Skin Clinic designed to make aesthetic treatment more accessible and affordable. Management has indicated that the concept is performing well thus far.
Revised pricing structures, new CMO
The company appointed a new Chief Marketing Officer (CMO), effective July 1, 2025, and implemented a pricing restructuring in March 2025. Previously, the company conducted promotional campaigns and offered discount vouchers, which frequently made final pricing unclear, according to management. In fact, SBC believes that in some cases, these pricing modifications made it seem that the company’s services were more expensive than competitors’ offerings. To address this, the company streamlined its pricing structure by revising both standard rates and promotional strategies. SBC expects improving cost efficiency, including reduced marketing and promotional expenses, will help offset lower pricing.
Growing international footprint, further expansion expected with new advisor onboard
Other recent steps the company has taken to support its growth strategy include international expansion. Currently, in addition to its operations in Japan, SBC also owns and operates treatment centers in Ho Chi Minh City, Vietnam, in California, and Singapore. SBC is encouraged by its results in its international operations. Earlier this month, SBC appointed Dr. Steven R. Cohen as Medical Strategy Advisor to help the company advance its global expansion strategy. Based in California, where SBC already has an operating presence, he has more than 30 years of clinical experience, has published many scientific papers and textbooks, and is also a Clinical Professor at the University of California, San Diego. SBC intends to expand further in existing and potentially additional markets.
Share repurchase program implemented
SBC also recently authorized a share repurchase program of up to US$5 million. The company expects to issue shares as future stock-based compensation in proportion to the number of shares it repurchases and is also considering dividend payments to enhance total shareholder returns.
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