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By Gerelyn Terzo, Benzinga
In what social media has declared the “undetectable era” of cosmetic surgery, beauty treatments have never been so appealing. As celebrities such as Christina Aguilera remain transparent about their cosmetic treatments while continuing to turn back the clock on their natural appearance, some experts say any stigma that was once associated with plastic surgery has disappeared.
One leader from Asia now making its mark in the industry globally is SBC Medical Group Holdings (NASDAQ: SBC), a Tokyo-based medical company providing franchise services to aesthetic medical clinics and improving the lives of people around the world. In a recently aired webcast, SBC Medical CEO Yoshiyuki Aikawa shared his vision for the future of his growing company while also highlighting investment opportunities now that the stock is trading on the Nasdaq. He also explained that while the company has come so far, there is still more work to be done.
Wall Street also seems to have paid attention. In a report released on Oct. 23, Zacks Small-Cap Research placed a $15.40 price target on SBC shares, suggesting the stock has room to almost double in price from its price of $7.23 at the time of the report’s publication. Zacks analyst M. Marin shared her insight on SBC’s franchise model as the company continues to expand its global footprint both organically and through M&A. Investors who are inclined to share in this bullish outlook can keep track of the company’s latest developments here.
SBC Medical’s Growth Strategy
While SBC Medical only recently became a publicly traded company, it’s been around for over two decades, getting its start as Shonan Beauty Clinic (SBC) in Japan’s Fujisawa city. Fast-forward, and SBC has evolved into a medical provider powerhouse, boasting the biggest network of franchised clinics in Japan and leading the country’s aesthetic medical industry as the Asia population boom continues to unfold.
SBC Medical reports that it oversees 220 clinics, including Shoan Beauty clinics, and is growing, reaching close to 4 million customers each year – 70% of whom are repeat patients. Additionally, SBC Medical is in the early stages of international expansion, with clinics located in Los Angeles, CA. and Ho Chi Minh City, Vietnam. With its sights set on further expansion into adjacent fields, including B2B partnerships, SBC Medical, in many ways, is just getting started.
“If we become No. 1 in Asia, I believe we will become No. 1 in the world,” said Mr. Aikawa.
Chief among the services SBC Medical provides to aesthetic clinics are marketing services, but SBC also supports them in other ways such as recruitment, training, evaluations, medical equipment and expertise. Mr. Aikawa expects these facilities will serve as a springboard to debut additional clinics in these jurisdictions.
SBC Medical’s management team represents nearly 25 years of experience in this industry, setting itself apart from the pack with features like a fully digitized integrated system and simplifying things for medical professionals. Its approach seems to be working, as SBC Medical reports that it holds the largest piece of the market share pie in Japan’s medical aesthetic sector, controlling close to one-third of the nation’s growing aesthetic medical segment and further solidifying its leadership position as a franchisor.
SBC Medical’s Balance Sheet
Mr. Aikawa, who has long been impressed by the effectiveness of aesthetic medicine, pointed to SBC Medical’s solid fundamentals on the balance sheet – the company is generating rising revenue that reached $194 million as of FY2023, coupled with an attractive profit margin. Its diversified portfolio also extends to other self-pay medical treatment areas such as fertility, orthopedic, regenerative medicine and laser eyecare, all of which appeal to many investors. Here’s a snapshot of the company’s financial strength:
Revenue YoY Grow: A five-year compound annual growth rate (CAGR) of 24%
Gross Profit Margin: 71%-plus
Operating Profit Margin: 26%-plus
Mr. Aikawa – a visionary whose passion for this business has proven unwavering – has made it his mission for SBC Medical to win. He prioritizes cash on the balance sheet that can be used for growth activities such as M&A. This stable balance sheet would also provide assurance for the sensitive needs of the medical practices that SBC supports.
He also has strong hopes for the company’s convenient, trustworthy and efficient online clinical services, including services like AI med provided by the group company, the performance of which has been growing annually.
Japan’s Aesthetic Medical Market Growth Potential
Japan is a major focus area for SBC Medical, considering only 10% of the country’s population currently seeks aesthetic medical treatments, a low base with enormous potential. Mr. Aikawa expects that segment to at least double to 20% to be closer in line with South Korea’s population turning to cosmetic surgery, owing in part to the advertising campaigns of the Shonan Beauty Clinic.
Market penetration among Japan’s core customer group – women up to their 30s – is growing. However, the sweet spot for SBC Medical here is both middle-aged male and female markets, as SBC Medical pursues affordable price points that will make monthly clinic visits possible.
“I feel like we are only halfway through achieving that goal, so we should work even harder,” said Mr. Aikawa, pointing out that the number of customers aged 40 is increasing.
As SBC Medical continues to expand its clinical base and improve the lives of people around the world, interested investors have an opportunity to participate in its growth story. Zacks’ analyst research suggests SBC Medical has the wind at its back, particularly owing to an increasingly popular aesthetics medicine market in Japan.
Investors can learn more about SBC Medical’s stock and fundamentals here.
Featured photo by Alexas_Fotos on Pixabay.
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