Moody was forced to come from behind twice, before eventually going on to win the deciding seventh frame and claim a monumental victory over his Chinese opponent.
“I think it is my best win on tour,” 18-year-old Moody told World Snooker Tour.
“I’m very happy. I played well, I potted the balls when I needed to and I’m over the moon.
“My scoring’s been better, my all-round game has been better, and if I’m making 50-plus nearly every frame it’s a bonus - I’m tough to beat when I’m like that.”
John Higgins and Kyren Wilson have also progressed to the third round after respective victories over Shaun Murphy and Duane Jones.
Scot Higgins beat Murphy 4-2 after reigning world champion Wilson had eased past Jones 4-1 earlier in the day.
Higgins was on course for a comfortable victory when he went 3-0 up, but Murphy hit back in the next two to force a nervy finish, with Higgins’ break of 82 enough to see off the Englishman. Higgins will face Graeme Dott in the next round.
Wilson did not have thing easy early on when Jones levelled things after two frames, but the world number two won the remaining frames to progress to the next stage where he will meet Marco Fu.
Elsewhere, Jak Jones beat 19-year-old Ukrainian Iulian Boiko 4-1, while Mark Selby got past Sijun Yuan 4-3 in anther tense finish.
