In April, 1935, the Third State Watch Factory was formed in Penza, a city 625 kilometres southeast of Moscow. This factory was reconstructed from the remnants of the Frunze Bicycle Plant using newly-acquired tooling from LIP. LIP engineers and technicians were also responsible for supervising the installation of all equipment and for training Russian engineers. (See also: ZIF)

The factory was renamed Penza Watch Factory in the year 1940. This factory focused primarily on small-sized ladies movements, and throughout the 1950s a number of different brands were produced, including Aurora, Junost, Kometa, Lux, Lyra, Mechta, Sura, Vesna, and Zvezda. 

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The Junost brand (Юность, meaning "youth") was a line of children's watches produced in the late 1950s and early 1960s. These watches are notable for their small size, designed specifically for a child's wrist. The Junost brand was retired around 1964, when all watches produced at Penza Watch Factory were consolidated under a single trademark: Zaria.