In a stand mixer, combine 3 tablespoons of lukewarm water and yeast. Let it set until dissolved and starting to foam (about 5 minutes).
Meanwhile, combine 1 cup of coconut milk, the butter pieces, sugar, and salt in a medium microwave-safe bowl. Heat in the microwave for about a minute, stirring occasionally until everything melts but doesn't boil.
Lightly whisk the egg and powdered milk into the butter mixture (if the mixture is too hot, let it cool to lukewarm to prevent the eggs from curdling).
Dump the liquid ingredients into the yeast mixture. Mix for two minutes at medium speed or by hand.
Add about 3½ cups of flour and continue mixing the dough. Add additional flour as needed to make a soft dough.
Turn the dough on a lightly floured surface and knead for 8-12 minutes (longer if you want airy bread).
Place the dough in a greased bowl, turning once to coat the dough with oil. Cover loosely with a clean cloth and let rise in a warm, draft-free place for 1-2 hours or until doubled.
Punch the dough down. At this point, choose what shape you want. You can shape the dough into a loaf and put it in a greased loaf pan, seam side down. Or you can divide the dough into 12 equal pieces, shape them into balls, and place them in a greased 12-inch round pan. You can refrigerate the uncooked bread for up to 24 hours.
If making rolls, divide the dough into 12 equal pieces – a little over 2 ounces apiece. Form round balls, tucking the edges underneath the dough, then rolling it against the board or between your palms until it's round. Arrange the shaped balls in a buttered baking dish. Let it rise until doubled in size.
While the bread rises, preheat the oven to 350℉ (180℃). Pour the remaining coconut milk into the baking dish. Brush the top of the rolls with coconut milk and sprinkle with optional sugar.
Bake until the crust is golden brown and the rolls sound hollow when tapped (20-25 minutes, depending on your oven).
If making a loaf, place it in a greased loaf pan, pour the remaining coconut milk over it, sprinkle with sugar, and let it rise while the oven preheats. Bake it for 30-35 minutes (how long depends on your oven) until the loaf sounds hollow when tapped.
Remove from the baking pan and let them cool. I like to eat mine when they're still hot.