By M. Marin

NASDAQ:SBC

READ THE FULL SBC RESEARCH REPORT

Agreement to Acquire Singapore’s AHH Furthers Emerging International Expansion Strategy

SBC Medical Group Holdings (NASDAQ:SBC), which provides end-to-end solutions that enable aesthetics clinics to launch, expand and/or operate their businesses, has recently taken steps to support its growth strategy, including entering into a definitive agreement to acquire Aesthetic Healthcare Holdings Pte. (AHH), which operates aesthetic clinics in Singapore. This is consistent with SBC’s goal to expand its footprint outside its home market of Japan. SBC provides comprehensive consulting and management services to the medical corporations in its growing network and the clinics they operate. SBC’s major services include consulting and marketing solutions, administrative and procurement services and medical equipment leasing.

The company believes that AHH can accelerate its global expansion strategy and increase its footprint in Asia, a strategy that is in the early stages. Currently, in addition to its operations in Japan and now Singapore, SBC also owns and operates treatment centers in Ho Chi Minh City, Vietnam and in California. Singapore-based AHH is privately-held. It owns and operates several brands that provide aesthetic medical treatments, including family clinics, and quick facial aesthetics outlets. AHH represents SBS’s initial measure to grow through strategic M&A. The company believes Singapore can be a key market from which to launch further expansion in the region. Reflecting its strategic location, economic growth and business climate, Singapore attracts substantial U.S. FDI (foreign direct investment); more than 4,500 U.S. companies are registered in Singapore, according to the U.S. State Department.

Singapore’s economy has expanded significantly over the past two decades. GDP was above US$466 billion in 2022, according to the World Bank, which also notes that the “country provides one of the world’s most business-friendly regulatory environments for local entrepreneurs and is ranked among the world’s most competitive economies.” This likely portends well for increasing demand for aesthetic services, in our view. GDP grew 3.6% in 2022 and 8.9% year-over-year in 2021, according to its Ministry of Trade and Industry (MTI) but declined in 2023, although the longer-term outlook is for strong economic activity.

Other recent initiatives to create synergies within customer loyalty programs, enhance employee benefits programs

In Japan, the company entered into a business alliance with MEDIROM Healthcare Technologies, which operates in the healthcare technology space with more than 300 relaxation studios in Japan. SBC Medical and MEDIROM have a combined 4+ million members in their respective loyalty programs. Through this new alliance, the two companies expect to create opportunities to offer customer rewards for services at either of the company’s venues. The company also recently launched SBC Wellness to enable corporate clients to enhance their employee benefits programs.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.