Preheat the oven to 400°F (200°C). Line a baking sheet with parchment paper or lightly grease it.
Pat the chicken strips dry and place them in a bowl; drizzle with the olive oil and toss to coat evenly.
In a separate bowl, mix 1/2 teaspoon salt, 1/4 teaspoon pepper, and the coconut flakes.
Coat each oiled chicken strip in the coconut mixture, pressing gently so the coconut adheres.
Arrange the coated chicken strips in a single layer on the prepared baking sheet, leaving small gaps between pieces.
Bake for about 30 minutes, or until the chicken is cooked through and the coconut is golden brown, flipping once halfway through if desired for even browning.
While the chicken bakes, whisk together 1/2 cup ketchup, 2 tablespoons lite soy sauce, 2 tablespoons water, and 1/4 teaspoon pepper in a small bowl to make the dipping sauce.
Serve the baked coconut chicken strips immediately with the prepared sauce.