Mix yeast, ⅓ cup lukewarm water and sugar. Stir to dissolve the yeast. Cover with a clean, dark cloth for 10 minutes. After this the mix should be foamy on top, otherwise your yeast is dead and you need to get fresh yeast.
In the mixer bowl mix flour, coconut milk, salt and the yeast mixture. Knead for 10 minutes using the hook attachment. Remove the hook and cover the bowl a clean cloth until it doubles in volume (it may take 45 to 70 mins depending on a number of things, including ambient temperature and humidity).
Pour the doubled dough on a floured surface and knead lightly to remove the excess bubbles (no more than a minute). Divide the dough into 12 portions and make into balls, sprinkle flour as it becomes necessary to prevent it from sticking too much to your hands and working surface. Sprinkle some flour on a baking sheet and place the balls on it.
Let the balls rest covered with a clean cloth until they almost double in size (30 to 45 mins).
Heat oven to 300ºF [150ºC].
Make an egg wash by stirring the egg with a wire whisk. Paint the bread with the eggwash. Cover the top with the coconut flakes.
Bake bread for 20 to 25 minutes (it should be a light golden brown outside). Remove from the oven and serve warm.