By M. Marin
READ THE FULL SBC RESEARCH REPORT
Headwinds also appear to be abating
We met with the management of SBC Medical Group Holdings (NASDAQ:SBC) last week. SBC provides end-to-end solutions that enable aesthetics clinics to launch, expand and/or operate their businesses. We present our takeaways from that meeting in this update. The company believes that several factors contributing to recent industry headwinds are beginning to abate. At the same time, SBC has launched multiple organic strategies to counter the headwinds it has encountered, including intensifying competition in Japan’s aesthetic medicine market as new competitors have entered the market. Among the many initiatives, the company has launched a multi-brand strategy to 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.
New brand, “Hada no Aozora Clinic”, scheduled to launch on October 1, 2025
For example, last week SBC launched a new brand, “Hada no Aozora Clinic”, which is scheduled to open in Tokyo on October 1, 2025. Hada no Aozora clinics will use a hybrid dermatology model integrating insurance-covered general dermatology and private-pay aesthetic treatments. Non-surgical procedures increased from about 1.62 million in 2017 to 3.06 million in 2024, and the share of total aesthetic treatments they attained increased from 83% to 88% over the same period, according to the Japanese Society of Aesthetic Plastic Surgery. The company believes this reflects a growing preference for non-invasive techniques.
The company intends to strengthen its market position both through organic measures and strategic M&A. For example, the company acquired MB career lounge recently, which added JUN Clinics, and AHH (see below) in 4Q25. SBC views the business model of JUN Clinics, which skews toward a flat fee model, positively.
Medical tourism from China & other markets rising
Tokyo news agency Kyodo News notes that Japan’s aesthetic medical techniques are widely known for high quality and notes that “a rising number of wealthy Chinese tourists… visit Japan primarily for medical services,” and that the “current trend reflects a growing health consciousness in China after the coronavirus pandemic…”
Furthermore, according to Kyodo News, “to boost medical tourism, the country [Japan] introduced a medical visa in 2011, now permitting foreign visitors to stay for healthcare for up to one year. The number of such visas issued jumped from 70 to 1,804 annually in the 11 years through 2022, but the actual figure for people visiting the country for medical care is likely to be much higher as many also arrive on tourist or business visas…”
The company’s CEO notes that “given the declining domestic population, the Japanese medical sector has two viable paths for growth: we must either attract more international patients or bring Japanese medical expertise abroad.” SBC is pursuing both strategies and is optimistic about its medical tourism strategy. SBC 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 efforts will not only diversify revenue sources, but also position SBC as a prime destination for medical tourists seeking aesthetic and other services.
Executing international expansion strategy with disciplined financial approach & new execs
The company conducts its M&A strategy maintaining a disciplined financial process. To help the company advance its global expansion strategy, SBC appointed Dr. Ewen Chee, founder of Singapore’s AHH, as President of AHH and Lead Doctor for Asia Strategy at SBC Medical Group. Dr. Chee’s role will be to support physician recruitment and training across the Asia-Pacific region and facilitate SBC’s global strategy. SBC also recently appointed Dr. Steven R. Cohen as Medical Strategy Advisor. Based in California, 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.
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