Preheat your oven to 350°F (175°C).

In a small saucepan, combine the granulated sugar and water over medium heat. Stir until the sugar dissolves, then stop stirring and allow it to boil until it turns a golden amber color. This should take about 5-7 minutes.

Quickly pour the caramel into a 9-inch round cake pan, tilting the pan to evenly coat the bottom. Set aside to cool and harden.

In a large mixing bowl, whisk together the sweetened condensed milk, evaporated milk, coconut milk, eggs, and vanilla extract until smooth.

Stir in the shredded coconut until evenly distributed.

Pour the coconut mixture over the hardened caramel in the cake pan.

Place the cake pan in a larger baking dish and fill the larger dish with hot water until it reaches halfway up the sides of the cake pan (this is a water bath).

Bake in the preheated oven for about 50-60 minutes, or until the flan is set and a knife inserted in the center comes out clean.

Remove from the oven and let it cool to room temperature. Then refrigerate for at least 4 hours or overnight.

To serve, run a knife around the edges of the flan, invert it onto a serving plate, and let the caramel sauce drizzle over the top.