Boil mackerel until cooked. Drain and flake the meat, taking care not to include fine bones. Pound 3 shallots, finely, in mortar and pestle with black pepper. Add the fish flakes and pound together. Set aside.
Dry toast 1 sliced shallot and half of the sliced lemongrass in wok. Add the grated coconut and toast to a pale colour, stirring constantly.
Remove from heat, mix the pounded mackerel into the coconut mixture. Season with salt and sugar and mix thoroughly.
Garnish with leftover lemongrass slices, sliced onions and chillies.