Place milk and 1/3 cup sugar in a small saucepan; stir until sugar is dissolved. Add 1/4 cup butter; gently warm mixture until butter melts and mixture is warm but not hot—no more than 100 degrees F (40 degrees C).

Whisk 2 1/2 cups flour and yeast together until well combined; stir in milk mixture. Stir in 1 beaten egg until forms a sticky, wet dough. Turn dough out onto a well-floured surface; knead for about 10 minutes, gradually kneading in 1 cup flour, or as needed, to make a smooth, elastic dough.

Form dough into a round ball, place it into an oiled bowl, and turn to coat. Cover bowl with a cloth and let rise in a warm place until doubled in volume, about 1 hour.

Beat 1/2 cup sugar and 1/4 cup butter in a bowl until light and fluffy; stir in coconut, milk powder, and 1/2 cup flour until smooth and combined. Set filling aside. Line baking sheets with parchment paper.

Punch down dough on a floured surface; cut into 2 equal pieces. Cut each piece into 8 equal-sized pieces (16 pieces total). Form each piece into an oblong bun; flatten with a floured rolling pin. Spoon about 1 tablespoon filling in the center of 1 flattened bun. Pull and pinch edges of dough together to enclose the filling; place seam-side down onto a prepared baking sheet. Repeat with the remaining filling and flattened buns. Cover buns with a cloth and let rise in a warm place for 1 hour.

Preheat the oven to 375 degrees F (190 degrees C).

Beat 1 egg in a bowl; brush on each bun for a glossy coating. Sprinkle each bun with sesame seeds.