SBC Medical Group Holdings (SBC) valuation at a glance
SBC Medical Group Holdings (SBC) trades below the fair value estimate shown here. At $4.12 versus a $4.76 estimate, that is a 16% upside.
- Price
- $4.12
- Fair value estimate
- $4.76
- Upside
- +16%
- Market cap
- $424M
- P/S (TTM)
- 2.4×
CompaniesSBC
SBC
SBC Medical Group Holdings
HealthcareJapanAesthetic medicineRelated-party revenueNet cashFounder controlledNasdaq deficiency
Overview
$4.12-3.7%
Market Cap
$424M
SEC filings
P/E (TTM)
8.6×
SEC filings
Rev Growth YoY
-15.5%
-15.5%SEC filings
Gross Margin
71.8%
SEC filings
FCF Yield
14.3%
Calculated from SEC filings
Upside to FV
+15.5%
internal, recomputed from the filings
Conviction
2/5A management-services company for Japanese aesthetic-medicine clinics priced at 4.27 times EBITDA with net cash equal to 34.6% of its market capitalisation, earning a 37.3% operating margin on revenue that is 91.5% billed to seven medical corporations controlled by the founder's relatives, under an unremediated internal-control weakness over exactly those transactions.
Research Depth
ScreeningDeep ResearchFull Model
Updated 7d ago
Quality Snowflake
Overall 60/100
Value5/5
Future0/2
Past4/4
Health4/4
Dividend0/1
Each axis scores the checks for which data is available (filled = pass, hollow = no data). Computed from the sourced metrics on this page, not a third-party rating.
Thesis
SBC Medical Group Holdings sells management services to the medical corporations that own the Shonan Beauty Clinic chain in Japan. Japanese law bars a for-profit company from owning a medical practice, so it cannot own the clinics; it licenses the brand, buys their advertising and materials, leases them equipment and runs their loyalty programme, and bills them for it. In the twelve months to 30 June 2026 that produced $175.2M of revenue, $65.4M of operating income at a 37.3% margin, and $60.4M of free cash flow after $2.5M of capital spending. The balance sheet holds $184.6M of cash and short-term investments against $37.8M of borrowings, so $146.7M, being 34.6% of the market capitalisation, is net cash, and the enterprise value of $293.1M is 4.27 times trailing EBITDA. Three facts explain the price. The first is concentration: $158.9M of the $173.6M billed in 2025, or 91.5%, went to related parties, and relatives of the chief executive hold two thirds of the votes in the medical corporations that pay it, while three of them alone accounted for 67.7% of revenue. The second is that management concluded its internal controls were not effective at 31 December 2025, for the second year running, and the specific weakness is over the authorisation of related-party transactions and executive pay. The third is that revenue fell 15.5% in 2025 because the company chose to cut its own fees to those customers from 1 April 2025. The June 2026 quarter grew 13.4%, but the continuing business grew 3.0%; the rest is a newly consolidated Tokyo-listed subsidiary and a loyalty-programme change that reduced the points redeemed against revenue. The founder owns 81.7% of the stock and sold 3,565,000 shares at $3.25 in April 2026, and since 10 July 2026 the company has been formally out of compliance with the Nasdaq rule on independent directors.
Bull Case
A third of the price is cashCash and short-term investments of $184.6M against borrowings of $37.8M and finance leases of $0.2M leaves $146.7M of net cash, 34.6% of the market capitalisation. The enterprise value is $293.1M against a market capitalisation of $423.7M, the difference being that net cash less the $16.1M of equity belonging to minority holders.
Four times EBITDA on a 37% operating marginTrailing EBITDA of $68.6M against an enterprise value of $293.1M is 4.27 times, struck on an operating margin of 37.3% and a gross margin of 71.9%. Those are not the margins of a business normally sold at four times.
The cash is real and cheap to makeOperating cash flow of $62.8M less capital spending of $2.5M gives $60.4M of free cash flow, 14.3% of the market capitalisation and 20.6% of enterprise value. Capital spending runs at 76% of a depreciation charge that is itself only $3.2M, because the clinics carry the fixed assets, not the manager of them.
The fee cut is being partly reversedBusiness consignment agreements renewed from 1 June 2026 and call-centre fees revised from 1 July 2026 are expected by the company to add about $15M of management service revenue on an annualised basis, which is 8.6% of the trailing top line. It is the clearest quantified catalyst on the page and it is charged to the same related parties.
The balance sheet is not the constraintCurrent assets of $259.4M against current liabilities of $78.5M is a current ratio of 3.31; borrowings plus finance leases are 0.14 times equity attributable to the parent; and there has never been a dividend, so the cash has simply accumulated.
Profit rose while revenue fellNet income was $51.0M in 2025 against $46.6M in 2024 on revenue that fell 15.5%, because operating expenses fell further than revenue did. A company that can cut its own price and earn more is not obviously a melting asset.
Bear Case
The customers are the founder's familyRelated parties accounted for 91.5% of 2025 revenue and 88.9% of the June 2026 quarter, and three medical corporations alone for 67.7% of the year. The 10-K states that relatives of the chief executive hold two thirds of the votes in the body that decides for those customers, and that the company itself has no voting control over them.
The controls over exactly that are not effectiveManagement concluded that internal control over financial reporting was not effective at 31 December 2025, for the second year running, and the weakness is the timely identification and approval of non-routine related-party transactions and executive compensation. The auditor was not engaged to opine on internal control, so this is management's own conclusion about its own weakest point.
The June quarter's growth is not the business growingRevenue rose 13.4% year on year in the June 2026 quarter, but the continuing business rose 3.0% and four of its five revenue lines shrank. The rest is a newly consolidated Tokyo-listed subsidiary, 9.2% of the quarter, and a 150% jump in management services caused by a loyalty-programme change that reduced the points netted against revenue. The half year grew 1.7%.
The exchange listing is in a cure periodNasdaq notified the company on 10 July 2026 that it no longer complies with the listing rule on independent directors and audit committee composition, after an independent director did not stand for re-election. The cure period runs to 9 July 2027. The company also qualifies as a controlled company and may take the governance exemptions that status allows.
The company finances the customers it billsFinance lease receivables from related parties were $25.4M at 30 June 2026 against $14.4M eighteen months earlier, with no allowance for doubtful accounts recorded, and receivables from related parties were $40.7M, being 23.3% of a full year's revenue. Fee income from a counterparty the company also funds is not the same risk as fee income from an independent one.
The float is thin and the founder is sellingThe chief executive holds 81.7% of the stock, the float is about 18.1M shares of 102.8M, and in April 2026 he sold 3,565,000 shares at $3.25 in a secondary from which the company received nothing and on which it bore $1.4M of costs. A $20M buyback authorised in December 2025 had not bought a single share by 30 June 2026.
One country, one currency, one regulatorCosts and revenue are in yen and the shares are priced in dollars: yen weakness cost $4.7M of reported revenue in the June quarter alone. The 10-K also makes the compliance of the medical corporations with Japanese medical, data and franchise law a direct risk to the company's own revenue, while stating that it cannot control them.
Key Metrics
Market Cap
$424M
SEC filings
Enterprise Value
$293M
Calculated from SEC filings
Revenue (TTM)
$175M
SEC filings
P/E (TTM)
8.6×
SEC filings
Forward P/E
[awaiting: the company gives no guidance beyond one annualised fee figure]
internal, recomputed from the filings
P/S (TTM)
2.4×
SEC filings
P/B
1.6×
SEC filings
EV/EBITDA
4.3×
Calculated from SEC filings
PEG
–
Calculated from SEC filings
Revenue Growth
-15.5%
SEC filings
Gross Margin
71.8%
SEC filings
Operating Margin
37.3%
SEC filings
Net Margin
28.0%
SEC filings
Free Cash Flow
$60M
SEC filings
FCF Yield
14.3%
Calculated from SEC filings
Debt / Equity
0.1×
SEC filings
Current Ratio
3.3×
SEC filings
Short Interest
3.5%
SEC 10-K/A Part III, 30 April 2026
Institutional Own.
4.4%
SEC 10-K/A Part III, 30 April 2026
Insider Own.
81.7%
SEC 10-K/A Part III, 30 April 2026
Shares Out.
102.8M
SEC filings
Float
18.1M
SEC 10-K/A Part III, 30 April 2026
Valuation
Price vs Fair Value
Bear$3.43
Base$4.76
Bull$6.12
Now $4.12
Bear Case
$3.43
3.0x trailing EBITDA of $68.6M plus net cash of $146.7M
Base Case
$4.76
5.0x trailing EBITDA of $68.6M plus net cash of $146.7M
Bull Case
$6.12
6.0x the June 2026 quarter's EBITDA annualised, $80.4M, plus net cash
DCF Summary
DCF awaiting Phase 2+
Discounted cash-flow model is built once research reaches the deep-research stage.
Historical Multiples
Multiple history pending
This section is being deepened.
Peer Comparison
| Ticker | Mkt Cap | P/E | P/S | EV/EBITDA | Rev Growth | Gross Mgn | Net Mgn |
|---|---|---|---|---|---|---|---|
| SBC | $424M | 8.6× | 2.4× | 4.3× | -15.5% | 71.8% | 28.0% |
Financials
| Line item | FY2023 | FY2024 | FY2025 | TTM to Jun-26 |
|---|---|---|---|---|
| Revenue | $193.5M | $205.4M | $173.6M | $175.2M |
| Cost of revenue | $56.2M | $49.4M | $46.3M | $49.3M |
| Gross profit | $137.3M | $156.1M | $127.3M | $125.9M |
| Operating income | $70.7M | $70.3M | $67.5M | $65.4M |
| Net income to the parent | $39.4M | $46.6M | $51.0M | $49.0M |
| Depreciation and amortisation | — | — | $2.7M | $3.2M |
| EBITDA operating income plus depreciation and amortisation | — | — | $70.2M | $68.6M |
| Item | 31 Dec 2025 | 30 Jun 2026 |
|---|---|---|
| Cash and cash equivalents | $163.8M | $184.3M |
| Short-term investments | $0.3M | $0.3M |
| Total current assets | $231.2M | $259.4M |
| Total assets | $380.4M | $406.7M |
| Bank and other borrowings | $42.8M | $37.8M |
| Operating lease liabilities | $8.6M | $10.3M |
| Finance lease liabilities | $0.2M | $0.2M |
| Total current liabilities | $61.1M | $78.5M |
| Total liabilities | $117.1M | $126.7M |
| Equity attributable to the parent | $248.3M | $263.8M |
| Non-controlling interests | $15.0M | $16.1M |
Cash flow pending
Awaiting source-linked statement data.
Figures in US dollars as filed. The trailing twelve months is the year to 31 December 2025 less the half year to 30 June 2025 plus the half year to 30 June 2026. Capital spending is the sum of two lines in the investing section, purchases of property and equipment and prepayments for property and equipment, because the company buys equipment through prepayments and the first line alone understates the trailing figure by $1.4M. SEC 10-Q, quarter ended 30 June 2026 ↗
Catalysts
In force
Contracthigh relevance
Fee revisions worth about $15M a year
Business consignment agreements renewed from 1 June 2026 and call-centre service fees revised from 1 July 2026. The company expects the two together to raise management service revenue by about $15M on an annualised basis at 158.1 yen to the dollar, which is 8.6% of trailing revenue. Every dollar of it is billed to related parties.
By
Regulatoryhigh relevance
Nasdaq independence cure period ends
Nasdaq notified the company on 10 July 2026 that it no longer complies with Listing Rule 5605 on independent directors and audit committee composition, after an independent director did not stand for re-election in May 2026. The board fell to four. The cure period runs to the earlier of the next annual meeting or 9 July 2027.
By
Capital
A $20M buyback that has not bought anything
The board authorised a $20M repurchase programme on 29 December 2025, expiring 31 December 2026. Treasury stock was unchanged at 1,304,308 shares between 31 December 2025 and 30 June 2026, so nothing had been repurchased under it at the half year. An earlier $5M programme was completed in July 2025.
By
Investment
Second tranche into OrangeTwist
The company bought 18.2% of OT Midco Holdings, which operates the OrangeTwist chain in the United States, for $20M on 29 December 2025, and has committed a further $5M payable in December 2026. It is an equity-method holding, not a consolidated business.
Risks
| Risk | Category | Severity | Probability | Impact on Thesis |
|---|---|---|---|---|
| Substantially all revenue is billed to customers the founder's family controls | Governance | High | Certain | Structural |
| Internal control over related-party transactions is not effective, for the second year | Controls | High | Disclosed | High |
| The listing is in a cure period | Regulatory | medium | Live | High |
| The company lends to its own customers and books no allowance | Credit | medium | Live | Medium |
| The June quarter's growth is composition, not trading | Earnings quality | medium | Measured | Medium |
| The yen is the reporting risk | Currency | medium | Continuous | Medium |
| Regulatory compliance sits with entities the company does not control | Regulatory | medium | Continuous | High |
| There has been a restatement before | Reporting | medium | Historic | Medium |
| The founder is a seller | Ownership | Low | Occurred | Medium |
Technical Snapshot
52-Week Range
$2.87$4.12$4.99
RSI (14)
63.3
neutral
50-Day MA
$3.38
+21.9%above
200-Day MA
$3.71
+11.1%above
Avg Vol (30d)
161K
-12%vs average
Support Levels
Resistance Levels
Technical inputs: SEC filings. closing prices, 252 sessions to the last close; average volume over the last 30 sessions
Ownership & Insider Activity
Institutional Holdersvia SEC 10-K/A Part III, 30 April 2026
Institutional holder details unavailable
This research record does not include a holder-level table.
Insider Activity
Dr Yoshiyuki Aikawa beneficially owns 83,839,460 shares, or 81.7% of the class, as of 29 April 2026, of which 5,000,000 are held through a company he wholly owns. All officers and directors as a group hold 81.7%. Aikawa Equity Management holds a further 5.2%. There is one class of stock and no dual-class structure. The 10-K puts his voting power at 85.2% before the April 2026 secondary and states the company is a controlled company under the Nasdaq rules. Exchange data puts the free float at roughly 18.1M shares.
Detailed insider transactions unavailable
This research record does not include a transaction-level table.
Peer Comparison
| Ticker | Mkt Cap | P/E | P/S | EV/EBITDA | Rev Growth | Gross Mgn | Net Mgn |
|---|---|---|---|---|---|---|---|
| SBC | $424M | 8.6× | 2.4× | 4.3× | -15.5% | 71.8% | 28.0% |
Research Notes
2026-09-07Research
Why the 2025 revenue decline is not what a screen shows
Revenue fell 15.5% in 2025 and the network grew by 34 locations over the same year. The fall is a repricing the company chose. From 1 April 2025 a flat monthly fee of three million yen per facility was replaced with a schedule keyed to clinic size, tenure, revenue and patient volume, with fees reduced in a clinic's first year, which management describes as making it easier for its customers to open new clinics. Franchising revenue fell 24.7% and management services 44.2% on that change and on the loss of a staffing licence in a subsidiary merger. Net income rose over the same year, from $46.6M to $51.0M, because operating expenses fell further than revenue did.
2026-09-07Forensic
Capital spending is two lines, not one
The XBRL tag for purchases of property and equipment reports $209,391 for the half year to 30 June 2026. The filed cash flow statement carries a second investing line, prepayments for property and equipment, of $804,423. Free cash flow struck on the tagged line alone would be $1.4M too high over the trailing year. Both lines are transcribed in the numeric gate for this page.
2026-09-07Research
The data feed classifies this company wrongly
The market data feed reports the sector as Industrials and the industry as Consulting Services. It is neither. The first forty-agent research pass reasoned about a consultancy's backlog, project milestones and days sales outstanding, and every conclusion resting on that framing was discarded. A second pass was run against the corrected description and this page is written from the filings.
2026-09-07Data
The technical block is computed, not copied
The raw price-history endpoint returned rate-limit responses for the whole of this research cycle on both of its hosts. The figures below were computed from 252 daily closes fetched through a client that negotiates its own session, and every one of them is derived here rather than read from a provider field: the fifty-two week range is the range of CLOSING prices, not the intraday extremes a data feed reports, and the relative strength index is Wilder's fourteen-period smoothed calculation, which is what a charting package shows.
Sources
SBC Medical Group Holdings valuation questions
Is SBC Medical Group Holdings (SBC) stock undervalued?
Against the fair value estimate shown on this page, SBC Medical Group Holdings trades below: $4.12 today versus a $4.76 estimate, about +16%. The methodology and per-scenario sources are set out in the Valuation section. Treat it as research, not advice, and do your own homework.
What is SBC Medical Group Holdings's fair value?
The fair value estimate shown for SBC is $4.76. Its valuation scenarios span bear $3.43, base $4.76, bull $6.12. See the Valuation section for the basis of each.
What is SBC Medical Group Holdings's market cap?
SBC Medical Group Holdings (SBC) has a market capitalization (its market value, often searched as "net worth") of $424M, and an enterprise value of $293M.
What is the bull and bear case for SBC?
Valuation scenarios: bull $6.12, base $4.76, bear $3.43. Each reflects a distinct set of assumptions; the drivers and sources are detailed in the Valuation section above.