Yates, an Asian Tour regular looking for his first European Tour victory in this co-sanctioned event, scorched Hong Kong Golf Club for nine birdies in a bogey-free round. He stands at 11-under-par 199 for a two-shot lead over three players.
Leading for the first time after three rounds on the European Tour, Yates will face stiff competition in search of his maiden victory.
Among the 13 players within four strokes of his lead is eight-time European Tour Order of Merit winner Colin Montgomerie, who looked like he might challenge his fellow Scotsman for the lead before back-to-back bogeys on 15 and 16.
'I had three fliers today and dropped three shots...but I got myself into contention on Saturday night, which was my goal,' said Montgomerie. 'Simon Yates had a great score...I just have just got to do something low tomorrow as well.'
Montgomerie finished with a second straight 4-under 66 and shares second place at 9 under with James Kingston (64) and Martin Erlandsson (68).
Damien McGrane tied for the second best round of the day with a 7-under 63. He shares fifth place at minus-8 with overnight leader Rick Gibson, who struggled to a 71, and first-round leader Kang Wook-Soon, who shot a 68.
Maarten Lafeber also fired a 63 and leads a group of seven players tied for eighth place at 7 under.
They are all looking up at Yates, who began making his push with three straight birdies from the second before stringing together five pars to make the turn at minus-5.
The 35-year-old Thailand resident then scorched the back nine with birdies on six of his final nine holes, including four straight to end the round.
'It's a great round because you finish with four birdies,' said Yates, who set the record for the re-designed course. 'It's like you feel good with that.
'I was 7 under coming in and looking at the scoreboard there were people on 8 and 9 under. I thought if I could get it to eight or nine it would be a good achievement. So it was very nice to be even better.'
Montgomerie, who predicted this weekend's winner would need to shoot 14 under, stumbled to consecutive bogeys at 15 and 16 after errant drives on both holes led to long approach shots that sailed past the greens.
He recovered a bit with a birdie at the 17th to move into a tie for second place.
'I said 14 under would win and I am sticking to that,' said Montgomerie. 'That means I need 65 tomorrow, which is fine. I am quite capable of doing that.'
The shot of the third round belonged to Robert-Jan Derksen, who aced the 144- yard 12th hole with a nine iron to win a solid gold bar worth $15,000. Derksen is tied for 23rd place at minus-4 after a 68.
Ted Oh also carded a hole-in-one with a 4-iron at the 214-yard fifth.