Core Viewpoint - Emerging Growth Research maintains a Buy-Extended rating for SBC Medical Group Holdings, Inc. with a 12-month price target of $9.00, indicating significant upside potential from its recent closing price of $3.57 on November 28, 2025 [1][2]. Financial Performance - Q3:25 revenue was $43.4 million, flat sequentially compared to Q2:25, but down 18% year-over-year due to changes in franchising fee structures. Management expects stabilization to continue through Q1:26 before returning to historical growth rates [6]. - Operating profit increased to $15.9 million in Q3:25, up from $13.8 million in Q3:24 and $14.6 million sequentially in Q2:25, reflecting effective cost management despite revenue pressures [6]. Growth and Expansion - The company added 34 new clinic locations year-over-year, reaching a total of 258 clinics, and annual customer visits grew to 6.5 million with a 72% repeat rate. Average revenue per visit increased to $298 in Q3:25 from $275 in Q1:25 [6]. - Management anticipates revenue will resume its historical compound annual growth rate (CAGR) of +10% to +15% starting in 2026, supported by domestic organic growth and plans to expand from 258 to 1,000 clinics over the next ten years, along with strategic mergers and acquisitions in Japan, Southeast Asia, and the United States [6]. Financial Position - SBC ended Q3:25 with a strong balance sheet, holding $127 million in cash, $83 million in accounts receivable, and $15 million in prepaid expenses, against only $21 million in long-term debt. Net cash represents approximately 40% of the company's current market capitalization [6]. - The firm's discounted cash flow (DCF) analysis indicates a fair value of $8.88 per share, rounded to $9.00, with a sensitivity range of $7.33 to $12.51 per share based on terminal growth and discount rate assumptions [5]. Market Position - SBC operates a franchise-based model that generates gross margins of 70%-75% with strong cash conversion, positioning it as an attractive consolidator in the fragmented global cosmetic treatment industry [4]. - The company became a Russell 3000 constituent in June 2025 and is exploring additional liquidity initiatives, including potential share buybacks and a dividend program [6].

Financial Data and Key Metrics Changes - The company reported a steady increase in the number of franchisee clinics, reaching 258, with a 34-location increase, and the annual customer count expanded to approximately 6.5 million [2] - Financial performance showed signs of recovery, with sales previously affected by restructuring and franchise fees, but now supported by an increase in point-related revenues [3] - Operating income and net income improved due to a decline in racing-related costs, including share-based compensation expenses [3] Business Line Data and Key Metrics Changes - The average revenue per customer visit is recovering due to pricing and promotion initiatives, as well as a multi-brand strategy in the dermatology segment [3] - The company is focusing on enhancing R&D and expanding unique service offerings through the acquisition of Waku, which specializes in regenerative medicine and skincare products [4][5] Market Data and Key Metrics Changes - The company has entered into a partnership with BLEZ ASIA to provide laser treatment in Thailand, aiming to tap into the growing aesthetic medical market [4] - The financial impact of the new BREATH initiative in Thailand is expected to be minimal in the near term, with plans to expand into other Asian countries after proof of concept [10] Company Strategy and Development Direction - The company aims to strengthen its overall competitiveness and achieve sustainable growth through strategic acquisitions and partnerships, particularly in the aesthetic medical field [5][20] - The M&A strategy is divided into domestic and global perspectives, focusing on clinic field acquisitions in Japan and exploring investment opportunities in the US market [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining the positive momentum observed in Q3, with expectations for stable financial performance in Q4 and the following year [11][22] - The company is considering providing financial guidance in the near future to address investor needs for revenue and profit expectations [22][26] Other Important Information - The company is working on improving share liquidity through new share issuance and potential share buybacks, acknowledging that the current share price is too low [6][24] - Dividend payments are being considered as a way to attract new investors, although the company prioritizes capital allocation towards strategic initiatives [25] Q&A Session Summary Question: Why was COVID elevated during Q3 2025, and when do you expect a franchise fee division impact to be fully absorbed going forward? - The increase in costs was attributed to medical equipment lease and the consolidation of AHH acquired in Singapore, with financial performance expected to continue improving [8] Question: Could you elaborate on the balance sheet changes during the quarter? - Changes included borrowing for working capital, adjustments in payment terms for related parties, and a decrease in tax debt due to midterm income tax payments [9] Question: What is the expected impact of the new BREATH initiative in Thailand? - The near-term financial impact will be minimal as the company conducts proof of concept for laser treatments, with plans for future expansion into other Asian markets [10] Question: What is the expectation for organic growth going forward? - The company anticipates maintaining the positive momentum from Q3, with expectations for stable financial performance in the upcoming quarters [11] Question: Can you describe the strategic relationship behind acquiring Waku? - The acquisition aims to realize synergies through enhanced sales of Waku products at SBC clinics and joint development of pharmaceutical and medical devices [12][15] Question: Can you comment on the latest status of US business development efforts? - The company is in the phase of understanding the US market and seeking strong partners to leverage its strengths from Japan, with cautious plans for future clinic development [17][18] Question: What are the expectations for M&A going forward? - The M&A strategy will focus on domestic clinic acquisitions and exploring investment opportunities in the global market, particularly in the US [20] Question: How do you plan to improve the liquidity situation? - Plans include increasing free float through new share issuance and potential share buybacks, acknowledging the current low share price [24] Question: Do you think about the dividend going forward? - Dividend payments are considered to attract new investors, but the company prioritizes capital allocation towards growth opportunities [25] Question: Do you have any plan to disclose financial guidance going forward? - The company is considering providing financial guidance in the near future [26]

Financial Data and Key Metrics Changes - The company reported a steady increase in the number of franchisee clinics, reaching 258 clinics, with an annual customer base expanding to approximately 6.5 million [2][3] - Financial performance showed signs of recovery, with operating income and net income benefiting from a decline in racing-related costs and an increase in point-related revenues [3][4] Business Line Data and Key Metrics Changes - The average revenue per customer visit is recovering due to pricing and promotion strategies, as well as a multi-brand strategy in the dermatology segment [3] - The company is focusing on enhancing R&D capabilities through the acquisition of Waku, which specializes in regenerative medicine and skincare products [4][5] Market Data and Key Metrics Changes - The company has entered into a partnership with BLEZ ASIA to provide laser treatment in Thailand, aiming to tap into the growing aesthetic medical market [4] - The company is exploring proof of concept (POC) initiatives in Thailand, with plans to expand into other Asian markets like Malaysia and Indonesia [11] Company Strategy and Development Direction - The company aims to strengthen its overall competitiveness and achieve sustainable growth through strategic partnerships and acquisitions, particularly in the aesthetic medical and clinical industries [20] - The U.S. market entry strategy involves forming strong partnerships and leveraging learnings from the Japanese market, while being cautious about direct replication of the business model [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining positive momentum in financial performance, expecting stable growth in Q4 and the following year [12][21] - The company is considering providing financial guidance in the near future to address investor needs for revenue and profit expectations [21][25] Other Important Information - The company is working on improving liquidity through measures such as new share issuance and potential share buybacks, acknowledging the current low share price [6][23] - Dividend payments are being considered as a way to attract new investors, although the focus remains on capital allocation for strategic initiatives [24] Q&A Session Summary Question: Why was COVID elevated during Q3 2025, and when do you expect a Franchise Fee Division impact to be fully absorbed going forward? - The increase in costs was attributed to medical equipment lease and the consolidation of AHH acquired in Singapore, with expectations of continued positive trends [9] Question: Could you elaborate on the Balance Sheet changes during the quarter? - Changes included borrowing for working capital, adjustments in payment terms for related parties, and a decrease in tax debt due to midterm income tax payments [10] Question: What is your expectation for organic growth going forward for both breadth and revenue? - The company expects to maintain positive momentum seen in Q3, with stable financial performance anticipated in Q4 and next year [12] Question: Could you describe the strategic relationship behind acquiring Waku? - The acquisition aims to realize synergies through enhanced sales of Waku products at SBC clinics and joint development of pharmaceutical and medical devices [15][16] Question: Can you comment on the latest status of your U.S. business development efforts? - The company is in a phase of understanding the U.S. market and seeking strong partners, with plans for future growth and expansion once comfortable [17][18] Question: What do you mean by more stable financial performance in Q4 and 2026? - Management confirmed expectations for revenue growth but could not provide specific numbers at this time [21] Question: How do you think about improving the liquidity situation? - The company is considering new share issues and share buybacks to increase free float and address low share prices [23] Question: Do you have any plan to disclose financial guidance or performance guidance going forward? - The company is actively considering providing financial guidance in the near future [25]

Financial Data and Key Metrics Changes - The company reported a steady increase in the number of franchisee clinics, reaching 258, with a 34-location increase, and the annual customer count expanded to approximately 6.5 million [2] - Financial performance showed signs of recovery, with sales previously affected by restructuring and franchise fee division, but now supported by an increase in point-related revenues [3][4] - The decline in racing-related costs, including share-based compensation expenses, contributed to improvements in both operating income and net income [3] Business Line Data and Key Metrics Changes - The average revenue per customer visit is showing signs of recovery due to pricing and promotion initiatives, as well as a multi-brand strategy in the dermatology segment [3] - The company is focusing on enhancing R&D and expanding service offerings through the acquisition of Waku, which specializes in regenerative medicine and skincare products [4][5] Market Data and Key Metrics Changes - The company has entered into a partnership with BLEZ ASIA to provide laser treatment in Thailand, aiming to tap into the growing aesthetic medical market [4] - The financial impact of the new BREATH initiative in Thailand is expected to be minimal in the near term as the company conducts proof of concept trials [10] Company Strategy and Development Direction - The company aims to strengthen its competitiveness and achieve sustainable growth through strategic acquisitions and partnerships, particularly in the aesthetic medical field [5][20] - The M&A strategy is divided into domestic and global perspectives, focusing on clinic acquisitions in Japan and exploring investments in the global market, especially in the US [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining the positive momentum observed in Q3 2025, with expectations for stable financial performance in Q4 and 2026 [11][22] - The company is considering providing financial guidance in the near future to address investor needs for revenue and profit expectations [22][26] Other Important Information - The company is working on improving liquidity by increasing free float shares and considering new share issuances and share buybacks [24] - Dividend payments are being considered as a way to attract new investors, although the company prioritizes capital allocation towards strategic initiatives [25] Q&A Session Summary Question: Why was COVID elevated during Q3 2025, and when do you expect a franchise fee division impact to be fully absorbed going forward? - The increase in costs was attributed to medical equipment lease and the consolidation of AHH acquired in Singapore, with financial performance expected to continue improving [8] Question: Could you elaborate on the balance sheet changes during the quarter? - Changes included borrowing for working capital, adjustments in payment terms for related parties, and a decrease in tax debt due to midterm income tax payments [9] Question: What is your expectation for organic growth going forward for both breadth and revenue? - The company expects to maintain the positive momentum seen in Q3, with more stable financial performance anticipated in Q4 and next year [11] Question: Can you describe the strategic relationship behind acquiring Waku? - The acquisition aims to realize synergies through strengthening sales of Waku products at SBC clinics and jointly developing pharmaceutical and medical devices [12][14] Question: Can you comment on the latest status of your US business development efforts? - The company is in the phase of understanding the US market and seeking strong partners to leverage its strengths from Japan [17] Question: What do you mean by more stable financial performance in Q4 and 2026? - Management confirmed expectations for a return to revenue growth but could not provide specific numbers at this time [22] Question: How do you think about improving the liquidity situation? - The company aims to increase free float shares and is considering share buybacks due to the current low share price [24] Question: Do you have any plan to disclose financial guidance or performance guidance going forward? - The company is actively considering providing financial guidance in the near future [26]

Investor Presentation November 2025 3Q2025 Disclaimer This presentation contains forward-looking statements. Forward-looking statements are not historical facts or statements of current conditions but instead represent only the Company's beliefs regarding future events and performance, many of which, by their nature, are inherently uncertain and outside of the Company's control. These forward-looking statements reflect the Company's current views with respect to, among other things, the Company's financial ...

Core Insights - SBC Medical Group has entered the Thai market through a partnership with BLEZ ASIA Co., Ltd, aiming to expand its aesthetic medicine services in Asia, following its previous entry into Singapore [1][4] - The partnership will focus on establishing a new clinic in Bangkok that specializes in dermatological treatments, leveraging SBC's expertise and BLEZ's local presence [1][2] Company Overview - SBC Medical Group operates over 250 clinics globally, with more than 6 million patient visits annually, and aims to provide high-quality aesthetic medical services developed in Japan [2] - BLEZ ASIA, a Japanese-owned company, has over 10 years of experience in Bangkok and operates a diverse portfolio, including pharmacies and clinics, with an annual patient base of approximately 100,000 for pharmacies and 1,200 for clinics [3] Market Potential - Thailand's aesthetic medicine market was valued at approximately USD 372.24 million in 2024 and is projected to grow to USD 1.118 billion by 2033, with a compound annual growth rate (CAGR) of 13.51% from 2025 to 2033 [3] - The limited availability of "Japanese-quality" aesthetic treatments in Thailand presents significant opportunities for reliable medical groups to meet the growing demand for safe and consistent care [3] Strategic Goals - The partnership with BLEZ is part of SBC's broader strategy to establish a foothold among Japanese expatriates in Thailand and expand into the wider Thai market [2][4] - SBC aims to deliver high-level medical services and create a model for integrating Japan's advanced medical services into the local market [5]

Financial Performance - For the three months ended September 30, 2025, the company generated revenues of $43,353,235, a decrease of 18.33% from $53,084,883 in the same period of 2024[227]. - Net income attributable to SBC Medical Group Holdings for the three months ended September 30, 2025, was $12,824,636, compared to $2,832,894 in 2024, reflecting a significant increase of 352.70%[230]. - Revenues, net for the nine months ended September 30, 2025 decreased by 16.74% to $134,040,783 from $160,995,005 in the same period of 2024[254]. - Net income for the three months ended September 30, 2025 was $12,833,326, representing an increase of $9,998,859 or 352.76% from $2,834,467 in the same period of 2024[250]. - Net income for the nine months ended September 30, 2025 was $36,765,128, representing a decrease of $3,376,880 or 8.41% from $40,142,008 in the same period of 2024[270]. Revenue Breakdown - Franchising revenue decreased by 36.71% to $9,929,387 for the three months ended September 30, 2025, from $15,688,528 in 2024, primarily due to a revision of the fee structure[235]. - Procurement revenue fell by 23.70% to $13,406,905 for the three months ended September 30, 2025, from $17,571,299 in 2024, attributed to reduced orders from medical corporations[236]. - Management services revenue decreased by 21.87% to $9,462,183 for the three months ended September 30, 2025, from $12,110,764 in 2024, mainly due to the discontinuation of certain supporting services[237]. - Franchising revenue decreased to $35,656,250, down by $9,768,802 or 21.51% from $45,425,052 for the same period in 2024[256]. - Procurement revenue decreased to $43,496,207, down by $807,684 or 1.82% from $44,303,891 for the same period in 2024[257]. - Management services revenue decreased to $23,328,864, down by $21,142,167 or 47.54% from $44,471,031 in the same period of 2024, primarily due to the merger of Shobikai Sub and the discontinuation of certain services[258]. Cash Flow and Expenses - The company reported cash flows used in operating activities of $(27,295,426) for the nine months ended September 30, 2025, compared to cash flows provided of $27,886,231 in 2024[227]. - Operating expenses decreased to $14,730,247, down by $14,674,240 or 49.90% from $29,404,487 in the same period in 2024[243]. - Gross profit decreased to $30,611,487, down by $12,627,603 or 29.20% from $43,239,090 in the same period of 2024[242]. - Gross profit for the nine months ended September 30, 2025 was $98,355,148, a decrease of $23,822,992 or 19.50% from $122,178,140 in the same period of 2024, mainly due to lower franchising and management services revenue[262]. - Operating expenses decreased to $43,717,642, down by $12,874,450 or 22.75% from $56,592,092 in the same period of 2024, primarily due to reduced stock-based compensation and salaries[263]. Other Income and Tax Rate - Other income increased to $2,526,035 for the three months ended September 30, 2025, compared to $65,922 for the same period in 2024, a rise of 3,731.85%[247]. - The effective tax rate decreased to 30.66% from 78.38% for the three months ended September 30, 2025, a decrease of 47.72 percentage points[249]. - The effective tax rate was 42.10% for the nine months ended September 30, 2025, compared to 40.44% for the same period in 2024[269]. Company Strategy and Future Plans - The company aims to expand its "Shonan Beauty Clinic" brand and strengthen its market position in Japan, Vietnam, and Singapore[228]. - The Company plans to conduct a tender offer for up to 575,000 shares of Waqoo's common stock from November 14, 2025, to December 12, 2025[291]. - The Company intends to make Waqoo its consolidated subsidiary following the completion of the tender offer, aiming to enhance R&D initiatives and integrate advanced technologies[287]. Financial Position and Assets - As of September 30, 2025, the company had retained earnings of $226,248,329[227]. - As of September 30, 2025, the company had $127,431,318 in cash and cash equivalents, compared to $125,044,092 as of December 31, 2024[272]. - The Company holds significant operating and finance leases, with total undiscounted lease payments amounting to $5,155,215[289]. - Future minimum borrowing payments total $21,122,794, with significant repayments due in 2026 and 2027[292]. Market and Currency Exposure - The Company is exposed to foreign currency exchange rate fluctuations, primarily due to operations in Japan and revenues in Japanese yen[294]. - The average exchange rate of Japanese Yen against the U.S. dollar was 147.4096 for the three months ended September 30, 2025, compared to 148.9730 in 2024, impacting net revenues positively[234]. Corporate Structure - The company completed a business combination with Pono Capital Two, Inc. on September 17, 2024, and began trading on Nasdaq under the ticker symbol "SBC"[219]. - The Company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[297].

Core Insights - SBC Medical Group Holdings reported a revenue decrease of 18% year-over-year for Q3 2025, primarily due to restructuring initiatives and a revised fee structure for clinic services [3][5][8] - Despite the revenue decline, the company saw significant improvements in profitability, with net profit rising by 353% year-over-year, driven by lower operating expenses [4][6][8] - The company aims to pursue sustainable growth by focusing on high-quality solutions and expanding its multi-brand initiatives in dermatology [5][12] Q3 2025 Financial Results - Total revenues for Q3 2025 were $43 million, an 18% decrease from the previous year [5][8] - Income from operations increased by 15% year-over-year to $16 million [4][8] - Net income attributable to SBC Medical Group was $13 million, compared to $3 million in Q3 2024 [6][8] - EBITDA for the quarter was $17 million, reflecting a 12% increase, with an EBITDA margin of 38% [7][8][21] - The number of franchise locations increased to 258, up by 34 from the previous year, and the customer count reached 6.5 million, a 14% year-over-year increase [8][9] Year-to-Date 2025 Highlights - For the nine months ended September 30, 2025, total revenues were $134 million, a 17% decrease year-over-year [9] - Net income for the nine-month period was $37 million, down 8% from the previous year [9] - EBITDA for the nine months was $57 million, also a 17% decrease, with an EBITDA margin of 42% [9][21] Future Outlook - The company plans to continue its focus on delivering high-quality solutions and expanding its presence in overseas markets, particularly in dermatology [5][12]

Financial Performance - Total revenues for Q3 2025 were $43 million, representing an 18% year-over-year decrease[4] - Year-to-date total revenues for 2025 were $134 million, a 17% year-over-year decrease[7] - Total revenues for the three months ended September 30, 2025, were $43,353,235, a decrease of 18.3% compared to $53,084,883 for the same period in 2024[23] - Total revenues for the nine months ended September 30, 2025, were $134,040,783, a decrease of 16.8% compared to $160,995,005 for the same period in 2024[28] Net Income - Net income attributable to SBC Medical Group for Q3 2025 was $13 million, a 353% year-over-year increase from $3 million in Q3 2024[9] - Year-to-date net income attributable to SBC Medical Group was $37 million, representing an 8% year-over-year decrease[7] - Net income for the nine months ended September 30, 2025, was $36,765,128, down from $40,142,008 in 2024, representing a decline of 8.5%[25] - The company reported a net income per share of $0.12 for the three months ended September 30, 2025, compared to $0.03 for the same period in 2024[23] EBITDA - EBITDA for Q3 2025 was $17 million, reflecting a 12% year-over-year increase, with an EBITDA margin of 38% compared to 28% in Q3 2024[4] - EBITDA for the nine months ended September 30, 2025, was $56,648,122, representing a decline of 17.3% compared to $68,453,829 in 2024[28] - EBITDA margin for the nine months ended September 30, 2025, was 42%, down from 43% in the same period of 2024[28] Customer Metrics - The customer count reached 6.5 million in the last twelve months, marking a 14% year-over-year increase[4] - The repeat rate for customers visiting franchisee's clinics twice or more was 72%[4] Franchise Growth - The number of franchise locations increased to 258 as of September 30, 2025, up by 34 locations from the previous year[4] Assets and Equity - Total assets as of September 30, 2025, were $321.36 million, an increase from $266.08 million as of December 31, 2024[19] - Total stockholders' equity as of September 30, 2025, was $248,059,201, an increase from $195,022,158 as of December 31, 2024[22] - Total liabilities and stockholders' equity as of September 30, 2025, amounted to $321,363,085, up from $266,083,154 as of December 31, 2024[22] Cash Flow - Cash flows from operating activities for the nine months ended September 30, 2025, were negative at $(27,295,426), contrasting with positive cash flows of $27,886,231 in 2024[25] - Cash and cash equivalents as of the end of the period were $127,431,318, a decrease from $137,393,070 at the end of the previous period[26] - Net cash provided by financing activities for the nine months was $18,470,001, compared to $11,584,038 in the previous period[26] Operating Expenses - Operating expenses for the nine months ended September 30, 2025, totaled $43,717,642, slightly down from $43,784,637 in 2024[23] Other Financial Metrics - Gross profit for the three months ended September 30, 2025, was $30,611,487, compared to $43,239,090 for the same period in 2024, indicating a decrease of 29.2%[23] - The company experienced a foreign currency translation adjustment loss of $6,791,961 for the three months ended September 30, 2025[23] - The company reported a gain on redemption of life insurance policies amounting to $8,746,138 for the nine months ended September 30, 2025[23] - Cash paid for income taxes, net, was $37,555,740 for the nine months, compared to $31,332,123 in the previous period[26] - The company reported borrowings from long-term loans amounting to $14,851,980 during the nine months[26] - The company experienced an effect of exchange rate changes amounting to $7,973,128 during the nine months[26] - Depreciation and amortization expense for the nine months ended September 30, 2025, was $2,010,616, down from $2,867,781 in 2024[28] Future Plans - The company plans to focus on sustainable growth and multi-brand initiatives in the dermatology segment moving forward[6]

Core Insights - The Chelsea Clinic has relocated to a larger, purpose-built facility at Ngee Ann City, enhancing its patient experience and reinforcing Singapore's status as an aesthetic medicine hub [1][2][4] - The new flagship facility integrates the medical clinic, spa, and corporate headquarters, featuring 16 rooms, including 12 clinic rooms and 4 spa rooms, designed for privacy and comfort [2][4] - The clinic has strengthened its Japanese-language support and communication channels to better serve the Japanese expatriate community and international patients [2][4] Company Overview - Founded in 1999 by Dr. Ewen Chee, The Chelsea Clinic is a pioneer in aesthetic medicine in Singapore, known for medically supervised aesthetic procedures [2][8] - The clinic is part of Aesthetic Healthcare Holdings (AHH) and SBC Medical Group, which operates a diverse range of medical and aesthetic services [9][10] - SBC Medical Group was listed on Nasdaq in September 2024 and included in the Russell 3000® Index in June 2025, indicating its growing presence in the medical field [10][11] Facility Features - The new facility includes dedicated consultation rooms for each doctor and expanded waiting lounges, creating a more personalized environment for patients [2][4] - Treatment rooms are named after Japanese cities, reflecting the clinic's connection to Japan and its parent company, SBC Medical [2][4] - The relocation aims to provide a more seamless and elevated patient journey, emphasizing comfort, privacy, and efficiency [4]