BNP Paribas starts Sembcorp Industries (U96.SG) at Buy with a $5.90 sum-of-the-parts target price.

Expects the stock's performance to be driven by its unit SembMarine (S51.SG), which historically has a 90% price correlation with oil prices.

Says orders for SembMarine are likely to increase to $3.3 billion next year from the $1.25 billion trough in 2009, driven by a rig replacement cycle and better returns from its high-specification rigs.

Adds Sembcorp's core utilities business and its defensive energy arm are complemented by its offshore and marine unit.

"We expect the impending capacity expansion for both the energy and water businesses to be completed by 2012-2013, which should help create a more balanced growth profile for the group, with the extended reach potentially creating synergies between its energy, environment and industrial park operations."

The shares are +1.0% at $5.00.