Japanese software company Zuken (TYO:6947) has seen its stock rise by nearly a third over the past year, but one firm feels there’s plenty of gas left in the tank. Anand Vasagiri and Beini Zhou of Artisan Partners featured Zuken in the Q4 2024 issue of “Hidden Value Stocks.” Vasagiri and Zhou are co-portfolio managers of the Artisan International Explorer strategy, which invests in non-U.S. small caps.
Background on Zuken
Zuken is a Japan-based company that makes software for industrial design, specifically, in the electronic design automation segment. The company operates through four divisions, which are printed circuit board design, wire harness design, IT solutions, and maintenance and services.
Engineers use Zuken’s software to design printed circuit boards and cable wire harnesses, both of which are widely used in machinery and gadgets in a broad range of end markets, such as automotive, aerospace, industrials and medical.
The company’s IT solutions division includes collaboration software tools that allow engineering teams to access and manage design files from multiple locations simultaneously. According to Vasagiri and Zhou, Zuken’s business model is pretty straightforward, consisting of selling software subscriptions and licenses to enterprises. Along with those licenses, the company charges an annual maintenance fee to generate continuing support revenue.
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