Preheat oven to 350F/180C. Line a muffin pan with cupcake liners. Set aside.
In a medium bowl, sift together flour, baking powder, and salt. Set aside.
In a standing mixer fitted with the paddle attachment, beat together butter and sugar on medium speed until light and fluffy, about 3 minutes. Scrape down the sides and bottom of the bowl as necessary. On medium speed, beat in eggs, one at a time, beating well after each addition. Beat in vanilla extract. With the mixer on low speed, add half of the dry ingredients, followed by the coconut milk, and beat until combined. Add the other half of the dry ingredients and beat only until combined. Do not over mix—the less you mix, the lighter the cupcakes will be. Using a spatula, gently fold in shredded coconut.
Divide batter evenly between liners, filling them about ¾ full. Bake for 15-20 minutes, until a toothpick inserted into the center comes out clean. Allow cupcakes to cool in the pan for 10 minutes, then remove and allow to cool completely on a wire rack.
Frost cupcakes and sprinkle with sweetened shredded coconut—as much as you like!