On September 18, 2024, SBC Medical Group Holdings (SBC) was listed on the Nasdaq market in the United States. The stock listing, the 11th for a Japanese company, was widely reported. While the company name might not be familiar, many may recognize it as the entity providing management support to Shonan Beauty Clinic. Yet, even knowing the business operator, a question lingers: "Why is SBC listing in America now?" CEO Yoshiyuki Aikawa himself answered this simple question for us.

"From the beginning, while operating clinics, I had the desire to aim for a stock market listing," says CEO Aikawa.

In countries like Singapore, China, and the United States, it is not uncommon for medical corporations to actively pursue M&A using funds raised through stock listings, bringing hospitals, equipment manufacturers, and pharmaceutical companies under their umbrella. However, in Japan, where the non-profit nature of hospital management is a premise, stock listings by medical corporations are generally prohibited.

"Attracted by the potential of aesthetic medicine to positively influence people's minds through medical care," CEO Aikawa opened Shonan Beauty Clinic in Fujisawa City, Kanagawa Prefecture, in 2000. Even with several well-known cosmetic surgery clinics already in existence, CEO Aikawa steadily advanced step by step with his own funds.

He tackled price transparency, which was not common in the aesthetic medicine industry at the time, continuously improved services from a customer perspective, and engaged in aggressive and strategic marketing. Currently, he has achieved top market share in the aesthetic medicine industry. Furthermore, this has been accomplished with 23 years of debt-free, excellent management.

"We have not only strived to provide excellent medical services but have also grown the group through various M&A activities. In July 2023, we acquired Rize and Gorila Clinic, whom we had always watched as rivals. However, I also realized that we were reaching the limits of what could be achieved with M&A using only self-funding."

This acquisition appears to have been a once-in-a-lifetime gamble for CEO Aikawa. Indeed, a single misstep could have risked losing management control of Shonan Beauty Clinic and incurring debt exceeding 10 billion yen. The person involved states, "We have reached the limits with self-funding." A different approach was necessary.

"For about ten years, I had considered going public in markets like Singapore and Hong Kong to secure funding. However, the answer was closer than I thought. It was a management seminar I had been attending. Coincidentally, two of my fellow attendees had both listed on Nasdaq. After gathering information from them, we decided that attempting a listing in America seemed promising. Following their advice, we proceeded with the Nasdaq listing."

What drives CEO Aikawa towards "growth" to such an extent?

"My dream is to become the medical group with the most patients in Japan. Currently, in addition to aesthetic medicine, we also operate departments for gynecology, ophthalmology, internal medicine, dermatology, and pediatrics. Our ultimate goal for the group is to own a general hospital. However, in Japan today, due to bed capacity restrictions, very few new hospitals can be built. This leaves M&A as the only option. Yet, acquiring even older hospitals with land and buildings requires tens of billions of yen. This enters a realm that simply cannot be sustained by borrowing and self-funding alone."

Incidentally, the entity with the largest number of patients in Japan currently is the Japanese Red Cross Society. CEO Aikawa clearly states, "I want to surpass the Red Cross and become number one by 2035."

Japan's medical expenses, which continue to rise, amount to 47 trillion yen annually. CEO Aikawa analyzes that maintaining the national health insurance system may become difficult in the future. Consequently, hospitals in regional areas will gradually face financial difficulties, leading to job losses for medical professionals. He envisions a plan to help rebuild these facilities by combining them with SBC's strength in private-pay medical services, thereby protecting both regional healthcare and employment.

"We receive many inquiries about acquiring hospitals, and we have indeed experienced rebuilding a hospital in Ryogoku, Tokyo. Just as Hoshino Resorts revitalizes regional accommodations, I aspire to become a similar presence in the medical industry."

Furthermore, SBC has set a goal of establishing its own medical university for the entire group. In 2023, CEO Aikawa himself became the chairman of the board after acquiring the medical university Gotokuji University, which has a nursing department, through M&A. In April 2024, it was renamed SBC Tokyo Medical University, aiming for development as a medical university. CEO Aikawa passionately speaks of his ideal to transform education itself to realize his vision of an ideal medical group.

While the SBC Group Holdings is strongly associated with Shonan Beauty Clinic, CEO Aikawa's own focus is shifting towards the expansion of general medical services rather than aesthetics. Moreover, his ambition to become number one in Japan within the next decade, by 2035, is astonishing. What is the next step after the Nasdaq listing?

"This is my first time as the president of a publicly traded company. Although we have listed our shares, I realize from the investors' reactions that we have not yet adequately explained ourselves to them. We must focus on investor relations activities and increase our recognition by expanding our clinics in the United States. As a first-year listed company, I approach this with a mindset of learning."

He draws inspiration from the overseas expansion of Uniqlo. Although their initial entries into New York and London were met with great fanfare, they were not immediately successful. However, through persistent challenges, they evolved into a global enterprise. CEO Aikawa intends to approach SBC's expansion into America with a similar spirit of challenge, emulating Tadashi Yanai's drive.

While prepared for the intense competition in the American market, CEO Aikawa learned during his market research that Japanese tattoo artists are highly regarded for their technical skill. He believes that Japan's advanced medical techniques will also be a strong selling point in aesthetic medicine.

"In America, too, the price of aesthetic medicine is 'ask.' You don't know until you go and inquire. It makes one suspicious, wondering if they change prices depending on the person, but that's the norm. However, this is quite cumbersome. I believe that if prices were more transparent, the aesthetic medicine market in America could expand further, and I want to take on this challenge."

With the growing awareness of well-being in both Japan and America, aesthetic medicine, aimed at enhancing one's quality of life, has the potential to attract even more attention. In Japan, the demand is particularly increasing among men, according to CEO Aikawa. SBC's research indicates that nearly 40% of men visiting clinics do so for anti-aging purposes.

"There's a growing number of men, in particular, who want to address sagging under their eyes. The importance of balancing both external appearance and inner well-being remains unchanged, I believe. When one's appearance changes, it can lead to a more positive outlook, enhance self-esteem, and build confidence. I experienced this firsthand two years ago when I suddenly developed facial paralysis and felt reluctant to appear in public."

One's own complexes, though perhaps minor to others, can be profoundly significant to the individual. Their presence or absence clearly alters one's behavior. CEO Aikawa, who finds hope daily in the expanding possibilities of medical advancements, declares, "I love medicine."

He passionately speaks of his desire to operate a general hospital that can offer various medical treatments, such as regenerative medicine for knee cartilage using orthopedic techniques, enabling patients to resume activities like tennis, or increasing the possibility for older women to have children through egg freezing. This is the vision he aims to realize.

To achieve this, it is necessary to enhance brand recognition through clinic expansion in America and to repeatedly conduct large-scale IPOs to be recognized by American investors as an investment target. Building on the Nasdaq listing, how will CEO Aikawa grow the group?

CEO Aikawa's goal is to become the medical group with the most patients in Japan. During our interview, he mentioned "the world's number one comprehensive medical group" multiple times. It remains to be seen how significant an entity SBC will become. SBC's challenge is one to watch.