LG Display's Q2 2025 Earnings: A Strategic Pivot to OLED and EV Markets Positions the Company as a High-Conviction Buy

In Q2 2025, LG Display delivered a financial and strategic performance that underscores its transformation into a high-margin, innovation-driven player in the global display industry. With a net profit of $619.1 million and revenue of $3.99 billion, the company not only reversed a previous quarter's loss but also outperformed analyst expectations by a wide margin. This turnaround is not a fluke—it's the result of a calculated shift toward OLED technology, disciplined cost management, and a strategic expansion into high-growth markets like electric vehicles (EVs). For investors seeking undervalued momentum plays in the tech sector, LG Display's Q2 results and long-term roadmap present a compelling case for a buy. Historically, LG Display's earnings releases have shown a positive short-term impact, with a 68.75% win rate over three days and an average return of 1.25% in that period.

The OLED Revolution: Profitability Through Premium Technology

LG Display's pivot from LCD to OLED is the cornerstone of its resurgence. OLED now accounts for 56% of total revenue, up 4 percentage points year-over-year, driven by the exit from its lower-margin LCD TV business and a focus on high-value applications. The average selling price (ASP) per square meter of OLED panels surged 32% quarter-over-quarter to $1,056, the highest since 2023. This pricing power is critical in an industry where margins are razor-thin.

The company's EBITDA margin of 19% in Q2, maintained for seven consecutive quarters, reflects its ability to balance cost discipline with innovation. A $925 million investment in new OLED technologies—such as Tandem-based P-OLED and Advanced Thin OLED (ATO)—positions LG to dominate in premium markets, including automotive displays and AI-integrated solutions. Analysts project that LG Display could return to full-year profitability in 2025, fueled by increased shipments to Apple for iPhones and iPads.

Vietnam Expansion: A Strategic Anchor in a Shifting Global Supply Chain

While LG Display's Q2 earnings report didn't explicitly detail Vietnam-specific initiatives, the broader LG Group's activities in the region signal a strategic pivot. LG Display Vietnam Hai Phong, a $1.5 billion subsidiary, requested an extension of tax incentives from the Vietnamese government in Q2 2025. This move aligns with the company's broader strategy to diversify its supply chain away from China, a critical step in mitigating geopolitical risks.

Vietnam's growing industrial base and government incentives under the “Make in Vietnam” policy make it an ideal hub for LG's OLED production. The subsidiary reported a 41.79% year-on-year revenue growth in 2024, with nearly 20,000 employees and a post-tax profit increase of 57.5%. By deepening partnerships with local enterprises, LG Display Vietnam aims to integrate Vietnam into the global value chain for high-end displays, further solidifying its role in the company's long-term growth story.

Cost Discipline and Operational Efficiency: The Unsung Drivers of Value

LG Display's Q2 results highlight its commitment to cost innovation. Despite a 17% year-over-year revenue decline, the company improved its operating loss by KRW 480.5 billion compared to the prior year, thanks to cost-cutting measures and a focus on high-margin OLED shipments. Capital expenditures in 2024 were tightly managed at KRW 2.2 trillion, prioritizing production optimization over expansion.

The company's debt-to-equity ratio dropped by 19 percentage points quarter-over-quarter, and cash reserves now stand at KRW 1,666 trillion. This financial discipline provides a buffer against macroeconomic volatility and allows LG Display to reinvest in R&D (up to 10.4% of sales in H1 2025) and strategic acquisitions.

The EV Opportunity: OLED as the Next Frontier

LG Display's strategic alignment with the EV market is a game-changer. The automotive segment now accounts for 10% of its revenue, with a 1-percentage-point sequential increase in Q2. Its OLED panels are being integrated into next-generation EVs for in-vehicle infotainment (IVI) systems, dashboards, and smart mirrors. The company's Tandem-based P-OLED technology, which offers ultra-large, high-definition displays with low power consumption, is particularly well-suited for EVs, where energy efficiency is paramount.

Collaborations with local distributors in Southeast Asia and Europe are reducing supply chain dependencies, while partnerships with automotive OEMs are expanding its footprint in the premium segment. With the global EV market projected to grow at a double-digit CAGR through 2030, LG Display's early mover advantage in automotive OLEDs could unlock significant upside.

Investment Thesis: A Buy for the Long-Term

LG Display's Q2 2025 earnings and strategic initiatives paint a picture of a company that is not only surviving but thriving in a competitive landscape. Its shift to OLED has unlocked pricing power and margin stability, while its Vietnam expansion and cost discipline ensure operational resilience. The EV market represents a $100 billion+ opportunity, and LG Display's technological edge in automotive displays positions it to capture a meaningful share.

For investors, the key risks include short-term volatility in the display sector and geopolitical tensions. However, the company's diversified supply chain, strong balance sheet, and focus on high-margin B2B markets (like automotive and AI) mitigate these concerns. At current valuations, LG Display offers a compelling risk-reward profile for those seeking exposure to the next phase of the tech revolution.

Final Verdict: LG Display is a high-conviction buy for investors who recognize the long-term value of strategic innovation and operational discipline. As the company scales its OLED and EV initiatives, it's poised to deliver outsized returns in a sector where momentum is everything.