In a medium saucepan, combine coconut milk, sugar, and water. Heat over medium heat.
Stir continuously until the sugar dissolves.
Bring the mixture to a slight boil, then reduce the heat and simmer for about 5 minutes until it thickens slightly.
Remove from heat and stir in vanilla extract, shredded coconut, and a pinch of salt.
Pour the mixture into serving bowls or glasses and refrigerate until set, about 2-3 hours.
Serve chilled, garnished with cinnamon, whipped cream, or fresh fruit if desired.