SBC Medical Group Holdings Inc (NASDAQ: SBC)

SBC Medical Group Holdings Incorporated is a management company headquartered in Irvine California and Tokyo Japan that owns operates and provides management services to cosmetic treatment centers mainly in Japan The company also owns and operates one treatment center in Ho Chi Minh City Vietnam and provides management services to one treatment center in Irvine California The business originated with the establishment of L’Ange Cosmetique Co Ltd in 2003 and SBCMG formerly Aikawa Medical in 2017 for the purpose of providing management services to medical corporations and their clinics Over time the company expanded its franchise network under the Shonan Beauty Clinic brand to include 164 franchisee treatment centers in Japan The core activities involve delivering comprehensive support services such as advertising and marketing staff recruitment and training booking reservations construction and design medical equipment and supplies procurement licensure of intellectual property and technology IT software solutions for remote consultations and payment tools for franchisee clinics The company generates revenue primarily through its relationships with medical corporations that own the franchisee clinics and through the resale of medical supplies cosmetic products and equipment to those clinics

SBC Medical Group Holdings Incorporated generates revenue from several streams The largest portion comes from royalty income which is derived from licensing the Shonan Beauty Clinic brand and related trademarks to the medical corporations Procurement services revenue is earned by purchasing advertising services medical materials and equipment on behalf of the medical corporations and reselling them at a markup Management services revenue includes fees for loyalty program management labor supporting services function supporting services and management consulting services provided to the medical corporations Rental services revenue is obtained from operating leases and sales type leases of property and equipment Other revenues include accommodation services medicine dispensed sales brokerage services construction services pilot training services interest income and miscellaneous items In the six months ended June 30 2024 royalty income contributed 29 736 524 procurement services contributed 26 732 592 management services contributed 32 360 267 rental services contributed 7 071 114 and other revenues contributed 12 009 625 For the full year 2023 royalty income was 42 103 380 procurement services was 53 186 662 management services was 72 282 549 rental services was 7 336 768 and other revenues were 18 633 064 The company also receives fees under franchise agreements calculated as a percentage of clinic sales or as fixed monthly amounts per medical facility under service contracts with certain medical corporations

SBC Medical Group Holdings Incorporated holds a strong position within the cosmetic medical service management market particularly in Japan where it operates the largest network of franchisee clinics under the Shonan Beauty Clinic brand The company competes with other providers of aesthetic medical services and equipment such as Aesthetic Medispa Alma Lasers B Braun SE Cynosure Aesthetics Evolus Inc Galderma S A Genesis Biosystems Inc Inmode Ltd IRIDEX Corporation Lumenis Be Ltd Revance Therapeutics Inc Sientra Inc Sinclair Pharma Limited Stryker Corporation and Surgery Partners Its competitive advantages include a well established brand with over twenty years of history a comprehensive suite of management services that covers marketing staffing construction equipment procurement technology licensing and payment processing a high repeat customer rate exceeding ninety percent among franchisee clinics and the use of advanced simulation technologies such as virtual reality AI and 5G 6G to improve procedural accuracy and enable remote consultations The company’s ability to offer a one stop solution for franchisee clinics allows it to maintain stable revenue streams and to benefit from the growth of its franchise network Additionally the company’s focus on technology development and intellectual property licensing creates barriers to entry for competitors

The customer base of SBC Medical Group Holdings Incorporated consists primarily of individuals seeking cosmetic medical services such as surgery dermatology dentistry and related treatments The majority of these customers are individuals aged between twenty and forty representing approximately eighty five percent of the clinic customer base in 2023 Customers above forty account for the remaining fifteen percent The company’s directly owned and franchisee clinics serve these end users while its primary contractual customers are the medical corporations that own the franchisee clinics Specifically the company receives revenue from Medical Corporation Shobikai Medical Corporation Kowakai Medical Corporation Nasukai Medical Corporation Aikeikai Medical Corporation Jukeikai and Medical Corporation Ritz Cosmetic Surgery under franchise and service agreements Additionally the company has service contracts with Medical Corporation Association Furinkai and Medical Corporation Association Junikai for management consulting and operational support The Irvine California clinic and the Ho Chi Minh City Vietnam clinic also generate revenue from local individual patients who receive cosmetic treatments at those locations