By M. Marin

NASDAQ:SBC

READ THE FULL SBC RESEARCH REPORT

Initiatives to focus on core business, expand footprint and grow portfolio of solutions

SBC Medical Group Holdings (NASDAQ:SBC), provides end-to-end solutions enabling aesthetics clinics to launch, expand and/or operate their businesses. Recent steps the company has taken to support its growth strategy include divesting non-core subsidiaries, entering into an agreement to acquire Aesthetic Healthcare Holdings Pte. (AHH) aesthetic clinics in Singapore, introducing SBC Wellness to enable corporate clients to augment their employee benefits programs, and acquiring bitcoin, among others.

These are consistent with SBC’s goal to expand and diversify its revenue streams. For example, SBC Wellness strengthens the company’s B2B offerings, while expanding its footprint outside its home market of Japan is a core long-term objective. Other recent initiatives to create synergies within the company include the recent purchase of about ¥1 billion of bitcoin is designed to support SBC’s goal to have a strong and flexible base of cash and equivalents. At the end of 3Q24, the company had cash and equivalents of US$137.4 million and long-term debt of less than US$15 million.

Crypto initiative comes as focus on cryptocurrencies is growing, with Trump administration hosting first Crypto Summit this month

With growing focus on and interest in cryptocurrencies, including bitcoin in its cash and equivalent base is designed to augment the company’s financial flexibility. The crypto initiative comes as focus on and interest in cryptocurrencies is growing. For example, the Trump administration has announced that it will host the first Crypto Summit on March 7, 2025. Participants will include business leaders and investors from the crypto industry and members of the President’s Working Group on Digital Assets, according to The Hill.

Separately, the divestiture of former subsidiaries Kijimadaira and SNA respectively provide ski resort operations and flight training operations, which are not related to the core business of providing services and solutions to aesthetics clinics, likely are designed to enable the management team to focus on expanding and strengthening its core business, which includes expanding its footprint. In addition to its operations in Japan, SBC also owns and operates treatment centers in Ho Chi Minh City, Vietnam and in California and has an agreement to acquire Singapore-based AHH. AHH 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 expects to be strategic in its market selection process as it expands both domestically and internationally, with the intention to launch new clinics in both new and existing markets to reinforce its market position. 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 substantial FDI, more than 4,500 U.S. companies are registered in Singapore, according to the U.S. State Department.

In general, SBC’s goal is to leverage the expertise it has developed through more than 20 years of operating history in order to expand geographically and into adjacent areas within certain fields. 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.

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