DMG downgrades HTL International (H64.SG) to Neutral from Buy; but lifts target price to $0.73 from $0.70 after rolling over valuation to blended FY10-11 8x P/E from 8x FY10 P/E, says Dow Jones.

DMG says while 2H tends to be seasonally stronger period for leather sofa maker, rising freight rates and raw leather hide prices likely to weigh on earnings.

Research house expects 2H10 core net profit to be comparable to $18.6 million achieved in 1H10. Shares off 2.7% at $0.73.