Potential Opportunities In Cosmetic Healthcare Highlighted Through SBC Medical’s Story

November 27, 2024 at 12:00 PM EST

--News Direct--

By Gerelyn Terzo, Benzinga

Cosmetic healthcare is no longer reserved for Hollywood elites. Rising demand has increased access to aesthetic surgery, as technological advancements have paved the way for innovative financing options and less invasive procedures – placing it within the grasp of a wider swath of the population. Meanwhile, the market opportunity is growing and expected to increase, placing the advantage in the hands of companies that have already gained the trust of their consumers – brands like Japan’s SBC Medical Group Holdings (NASDAQ: SBC).

According to Research and Markets, the global market for cosmetic surgery will grow by double digits in 2024 to reach a size of $53 billion. Furthermore, it will continue to grow at a compound annual growth rate (CAGR) of 8.4% over 2024-2028 to culminate in a market size of $73.22 billion.

In a recent report, McKinsey & Company predicted that the medical aesthetics sector, particularly in the United States and Canada, is here for the long haul and has demonstrated strong resilience in the face of changing economic cycles. The North American market growth is being fueled by demand for injectable procedures like Botox. According to the report, consumers continue to spend on cosmetic procedures, a heightened focus on cost-effective products and treatments notwithstanding.

Demand is two-pronged, comprising a growing segment of the population who are most interested in the cosmetic benefits of self-care as well as those facing medical issues such as skin conditions in search of relief. Either way, the cosmetic healthcare industry seems poised for growth, and companies like SBC Medical Group are working hard to position themselves to continue to benefit from these macro trends.

As a provider of comprehensive consulting and management services to medical corporations and their clinics, SBC Medical boasts the largest network of franchised clinics in Japan and a leading position in the aesthetic medical industry. The company’s revenue is growing as the number of clinics under its umbrella continues to expand.

SBC Medical Group: A Case Study In Expansion In Aesthetics

SBC Medical Group enjoys a dominant industry position in its home market of Japan, where it estimates it enjoys a 31% share of the market across hundreds of clinics. However, the company’s management team remains ambitious and has set its sights on expansion as SBC continues to take ground in cities like Irvine, CA and Ho Chi Minh City, Vietnam. Most recently, the company announced it has entered into a definitive agreement to acquire Aesthetic Healthcare Holdings Pte. Ltd. ("AHH"), a privately-held Singapore-based company that owns and operates several brands that provide aesthetic medical treatments, in an all-cash transaction. The acquisition by SBC of AHH marks the first step in the company’s strategy to grow its business through acquisitions, which includes plans to expand its business internationally with a primary focus on the U.S. and Asia markets. The company believes Singapore represents the ideal hub for the further development of its brand in the region.

Furthermore, while the cosmetic surgery market is growing around the world, SBC Medical has managed to exceed the average growth rate. The company reports that its five-year revenue CAGR between 2018 and 2023 hovered at 24%, far outpacing the industry’s growth rate.

SBC Medical attributes its growth largely to clinics that, under its leadership, are expanding their sales and customer base in Japan and beyond. The company benefits from a diversified revenue model in which it collects sales through different types of services, including management, procurement, rental and royalty income.

While the market opportunity may already seem attractive, there may still be a growth story yet to unfold in the cosmetic healthcare market. For example, aesthetic medicine penetration among women up to their 30s in age is still increasing, fueled largely by demand for medical needs involving dermatology treatments.

With total market penetration hovering at a modest 10%, as per estimates compiled by SBC, there is still plenty of room for further growth as the industry finds ways to reach middle-aged female and male patients whose ages range from 40 to 60. Cosmetic surgery among men has been growing as many search for cures like hair loss treatments and laser hair removal. To capture a potential windfall, SBC Medical is developing dermatology-focused services under its SBC brand and expanding laser hair removal to dermatology clinics via its Rise Clinics.

While competition may be growing as more companies look to jump on the bandwagon, SBC Medical Group reports that it enjoys key advantages, not least its early-mover industry position. To maintain its lead, SBC is hyper-focused on growth, including expansions into adjacent medical fields such as treatments for fertility and hair loss, while it also looks to strike key business-to-business partnerships through which it can leverage complementary strengths. With an income statement comprising double-digit revenue growth, gross profit margin and operating profit margin, SBC Medical Group’s approach may already be paying off.

Interested investors who are looking to add exposure to this market opportunity to their portfolios can learn more about SBC Medical’s stock on the company’s website sbc-holdings.com/en

Featured photo by Adeolu Eletu on Unsplash.

This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.

Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.