Preheat oven to 350°F (175°C). Prepare two 9-inch round cake pans.

Whisk flour, baking powder, and salt together.

Beat butter and sugar until fluffy.

Add eggs, one at a time, mixing well after each addition.

Stir in vanilla and coconut extracts.

Alternate adding the dry ingredients and coconut milk into the mixture, mixing until just combined.

Bake for 25–30 minutes or until a toothpick comes out clean.

Let cakes cool completely.

For frosting, beat cream cheese and powdered sugar until smooth.

Whip heavy cream to stiff peaks and fold it into the cream cheese mixture.

Layer and frost the cakes.

Press shredded coconut onto the sides and top for a cloud-like finish.

Chill for 1 hour before serving.