Preheat oil to 365°F.
Whisk together the shortening, sugar and egg yolk until well combined.
In another bowl sift together the flour, baking powder, salt, and cinnamon.
Alternate adding the flour mixture and milk to the yolk mixture until a dough has just formed.
Turn the dough onto a clean surface and knead until smooth, 3 to 5 minutes.
Lightly flour the surface and roll dough until ½ inch thick.
Use a 2 to 2 ½ inch circle cutter to cut out doughnuts, then use a small ½ inch piping tip (or any small ½ inch round you have) to cut out doughnut holes.
Carefully drop 3 to 4 doughnuts at a time into the oil and fry for 1 ½ to 2 minutes, flipping the doughnuts after a minute.
Drain on paper towels and repeat until all the doughnuts have been made. (at this time you can re-roll the scraps to make more doughnuts)
For the glaze: Place powdered sugar, cream and vanilla in a bowl and stir together with a fork until smooth.
To assemble: Dip each doughnut top into the glaze and gently press into either the peanuts or coconuts until they adhere to the glaze. Serve.
For the powdered sugar: Place powdered sugar and a few doughnuts into a paper bag and shake until all the doughnuts have been fully covered. Carefully remove doughnuts from bag and repeat. Serve.