CIMB has cut HTL International (H64.SG) target price to $0.73 from $1.10, based on 6x FY11 P/E vs 8x previously, to reflect FX risks given sofa maker’s exposure to EUR, according to Dow Jones.

CIMB has also lowered FY10-11 earnings estimates by 7%-19% to assume lower sales in Europe, higher production costs. Notes HTL derives more than 65% of sales from Europe, but exposure to EUR lower at about 20%-25% as most European customers billed in USD.

Keeps Outperform call. “HTL is better positioned this year to face challenging market conditions as it had strengthened its presence in major markets during the recent tough times,” says the research house. Adds HTL also more well-versed with inventory management, maintaining more appropriate level of raw leather hides to match demand.

Stock flat at $0.60.