(Reuters) - Japan's Hideki Matsuyama turned in his first flawless round of the WGC-HSBC Champions on Saturday to head into the final day's play with a three-shot lead over reigning champion Russell Knox.

Starting the day with a three-stroke cushion after 19 birdies over the first two rounds, Matsuyama was again in impeccable form at the Sheshan International Golf Club, carding a four-under-par 68 to end the day 17-under for the tournament.

The 24-year-old picked up just one shot in his first eight holes but birdies at the ninth, the par-five 14th and the last kept him ahead of the chasing pack at the $9.5 million event.

"The first two days, making lots of birdies, it's a lot of fun," the world number 10 said.

"But today, when you're in a position to win, playing smart and making no bogeys was very satisfying to me ... I think the key for tomorrow's round will be not making any bogeys."

Knox, who won on debut last year, also carded 68, with American Daniel Berger a shot behind him in third place on 13-under after mixing eight birdies and three bogeys in his 67.

"I'm not going to give up my title without a big fight tomorrow," said Knox.

"The way Hideki played today, he's probably going to play similarly tomorrow. He's an extremely aggressive iron player, and when he's on, he's as good as anyone. I'm going to have to be foot down, be aggressive and try and catch him."

Italy's Francesco Molinari, who won at Sheshan in 2010, started with three birdies in a row and finished with a 68 to tie for fourth place with American Bill Haas (70), five shots off the pace.

Haas put pressure on the leader with three birdies over his first six holes to cut Matsuyama's lead to a single shot but dropped a shot before and after the turn and picked up just one more birdie over the back nine.

World number three Rory McIlroy also started strongly with birdies on the second, sixth and eighth holes but lost ground with three bogeys on the back nine to end up with a 70.

The Northern Irishman has a share of eighth place on nine-under with five others, including British Open champion Henrik Stenson (67) and American Matt Kuchar, whose 68 included a hole-in-one on the shortened par-three 17th.

(Reporting by Simon Jennings in Bengaluru)