The Australian major winner had hung tough to remain firmly in the mix at the halfway mark of the opening event of the LPGA Tour's all-important Asian swing, but her chances shrunk after a disappointing third round on Saturday.
After opening with a four-under 68, followed by an even-par 72 on Friday, Kim carded a three-over 75 on Saturday to be tied for seventh, one under the card.
Kim had three bogeys on the front nine and one on the back, her only birdie of the round coming at the par-5 eighth.
Despite her position on the leaderboard, the 2025 Evian Championship winner enters the final round eight shots behind Hye-Jin Choi.
The South Korean star maintained her tournament-long lead by shooting a three-under 69 on Saturday to take a one-stroke advantage into the final round.
Choi had four front-nine birdies at Sheshan Golf Club.
She led by three strokes after the first round and by two after the second to set up a 54-hole total of nine-under 207.
Fellow South Korean Amy Yang shot 68 and was in second place, followed by Japan's Ruoning Yin (67) in third, two behind Choi.
Choi is seeking her first win on the LPGA Tour to add to her 12 victories in her native South Korea.
Defending champion Jeeno Thitikul, who won in a five-hole playoff over Minami Katsu here in 2025, shot 74 on Saturday and was at even par.
Thailand's Thitikul won the Lotte Championship in Hawaii earlier this month for her fourth LPGA victory of the season and 11th overall.
Of the other Australians in the field, Karis Davidson was in a tie for 31st place at five over.
Robyn Choi was nine over for the tournament, with Cassie Porter 10 over and Minjee Lee 11 over.
The late-season Asian Swing on the LPGA Tour continues next week in South Korea, with later tournaments in Malaysia and Japan.
- with The AP
10°C