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WhiteHawk Ltd


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Our Investment Summary

Date of Initial Coverage


Initial Entry Price


Returns from Initial Entry


Investment Memo:

WhiteHawk Ltd (ASX:WHK)


Opened: 25-Feb-2022

Shares Held at Open: 4,385,547

What does WHK do?

WhiteHawk (ASX:WHK) is an ASX-listed, USA based cybersecurity company, providing cyber risk products, services and solutions.

What is the macro theme?

Global cybersecurity threats are growing and businesses and governments are ramping up spending on their cybersecurity defences. Increasingly state sanctioned, or state-tolerated actors are involved in major attacks, meaning cybersecurity has never been more important.

Why did we invest in WHK?

Strong management team

With deep connection to US government organisations, proven ability to sign big contracts with big organisations

Large contract sizes

WHK is slow to progress deals, but when they happen they are generally for large $ contracts, with big organisations that are sticky customers.

Partner deals to deliver revenue

Key partner deals signed with more in the pipeline, yet to deliver revenue

Tiny market cap

Around $25M with US$2.3M revenue in 2021 and a growing presence in a high-growth industry, the share price could re-rate if WHK announces sizeable contracts with major partners

What do we expect WHK to deliver?

Objective #1: More contracts, partnerships and proofs of concept

WHK management has proven they can sign contracts and partnerships with top tier large organisations, but the deals are slow to be delivered. We want to see the effort of the last few years in building the pipeline come to fruition in 2022, with WHK delivering the following:

  • 3x new contracts with large organisations (governments or global enterprise)
  • 3x new partnerships
  • 15+ new Proofs of Concept

Objective #2: First revenue from channel partnerships

WHK has already signed some interesting partnerships deals (Dun & Bradstreet, Amazon web services) which have great potential, we want to see the first revenue coming in from these partnerships.

Objective #3: Proofs of Concept (POC) increase to full, multi-year contracts

WHK is signing proofs of concept (small paid contracts to try the product, that lead to bigger contracts if successful) - we want to see WHK successfully convert several POCs to large contracts.

Objective #4: Double revenue in the next annual report

Objectives 1, 2 and 3 will lead to the ultimate goal of growing revenue, for a strong share price performance we want to see WHK double its revenue this US financial year - targeting a topline revenue of US$4.6M (which is double the recently released US FY21 financials at US$2.3M).

What could go wrong?

Sales Risk

Deals continue take a long time and investors lose interest, alternatively loss of key contracts

Market Risk

Covid resurgence delays government spending once again

Competition Risk

The cybersecurity industry is a competitive space. Other companies may step in and take key clients

What is our investment plan?

We have been holding WHK for a few years now, we announced it to our portfolio in May 2019. We really back the management team to deliver and are happy holders into 2022 despite recent share price weakness.

We will likely look to further increase our position in WHK over the next few months if prices remain around current levels.

We will hold a position in WHK for at least another 3 years. If the share price reaches near previous highs we will look to take some profit and reduce total position by up to ~25%

Disclosure: Disclosure: The authors of this memo and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 4,385,547 WHK shares at the time of writing. S3 Consortium Pty Ltd has been engaged by WHK to share our commentary on the progress of our investment in WHK over time.

Investment Milestones for WHK

Initial Investment: @ 9.7c
Top Slice
Free Carry
Increase Investment: @ 11.4c
Free Carry
Increase Investment: @ 13.31c
🔲 Free Carry
Increase Investment: @ 16.77c
🔲 Free Carry
Increase Investment: @ 10c
🔲 Free Carry
🔲 Take Profit
Price increases 300% from initial entry
Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
12 Month Capital Gain Discount
🔲 Hold remaining Position for next 2+ years

Our Past Commentary on WhiteHawk Ltd

Date Title
13-May-2023 $ 0.035 What happened at RIU Sydney?
31-Jan-2023 $ WHK Quarterly: We are pleasantly surprised - here’s why
09-Dec-2022 $ WHK to Thrive as Cybersecurity Takes Centre Stage
26-Feb-2022 $ 0.110 The War Begins, Cybersecurity, Food Security, Energy Independence and Precious Metals
25-Feb-2022 $ US braces for Russian Cyber Attacks in Response to Sanctions
21-Feb-2022 $ 0.000 Why we invest in Oil & Gas and Precious Metals
30-Oct-2021 $ 0.160 The fallout from the VUL short attack explained
04-Sep-2021 $ 0.205 Annual Reports, Uranium and a Welcome to New Subscribers
28-Aug-2021 $ 0.180 Recap of the KNI IPO and share price run
21-Aug-2021 $ 0.190 Market fluctuations and portfolio news and quick takes
20-Aug-2021 $ 0.175 WHK comes out of hibernation with US$1.185M contract with the US Federal Government
19-Aug-2021 $ WHK returns with US$1.185M cybersecurity contract with US federal government department.
11-May-2021 $ 0.165 We added to our WHK position on-market last week
27-Apr-2021 $ 0.230 Our Portfolio Performance from January 1st to March 31st 2021
22-Jan-2021 $ 0.385 Two Tech Stocks for 2021
07-Jan-2021 $ 0.300 Our Stock Picks for 2021
21-Dec-2020 $ 0.280 Last 48 Hours Reveals Cyberattack on US Government Way More Serious Than Anyone Thought
30-Oct-2020 $ 0.205 Immediate Upside? WHK Reveals Future Revenue Growth
12-Oct-2020 $ Delivering cybersecurity solutions
07-Oct-2020 $ 0.140 WHK Secures A$2.1M US Government Contract Extension
28-Jul-2020 $ 0.125 WhiteHawk Wins US Federal Government Cybersecurity Contract Worth up to US$5.9M
22-Jun-2020 $ 0.069 A Wave of Cyber Attacks has Whitehawk (ASX: WHK) Primed to Run
01-May-2020 $ Cybersecurity as a Service
30-Apr-2020 $ 0.055 WHK Expands its Cyber Risk Program, Delivers Huge Lift in Revenues
15-Apr-2020 $ 0.066 WHK Confirm US$400k SaaS Sales via New Sales Channel
14-Aug-2019 $ 0.105 Contract Renewals Confirm WhiteHawk Cybersecurity Expertise
31-Jul-2019 $ 0.100 WHK Keeps Stacking up Major Revenue Generating Deals
18-Jun-2019 $ 0.105 WHK Expands US Defence Contract as Cybersecurity Sector Heats Up
28-May-2019 $ 0.120 WHK Gains Access to Tens of Thousands of Small Business Customers as US-China Tech Cold War Emerges
14-May-2019 $ 0.110 WhiteHawk Expands Global Footprint with Further Catalysts to Come
03-May-2019 $ 0.100 Our Top Pick of 2019 Locks in Yet Another Major US Contract
01-May-2019 $ 0.081 REVEALED: Our Top Pick for 2019
16-Apr-2019 $ 0.110 Clock’s Ticking for WhiteHawk Catalysts: Contract Announcements Overdue