Make the coconut cake: Preheat the oven to 350°F. Cream the butter and the sugar in a mixing bowl, add the 2 egg yolks, and mix well. Add the all purpose flour, baking powder, salt, coconut milk, and shredded coconut, and fold everything in. Set aside.
In another mixing bowl, beat the 2 egg whites until soft peaks form. Add the egg whites to the cake batter, and fold it.
Pour the cake batter into a lined 8 x 8” baking dish, and bake at 350°F for 35 minutes or until a toothpick inserted in the center of the cake comes out clean. Transfer the cake to a cooling rack to cool.
Make the toasted coconut flakes: Lay the shredded coconut evenly on a lined baking pan, bake at 350°F for 2-4 minutes or until they turn golden brown. Set aside to cool.
Make the coconut cream: Cream the cream cheese and butter in a mixing bowl, add the powdered sugar, and fold it in. Add the coconut milk and mix until everything’s well combined.
Assemble the cake: You can either slice the cake in half to make a 2-layer cake or leave it as 1-layer. Frost the cake with the coconut cream, sprinkle the toasted coconut flakes on top, and enjoy!
