Rinse the chestnuts and make a small incision (X-cut) on the flat side of each chestnut to prevent them from bursting during cooking and to make peeling easier.
Place the incised chestnuts in a pot and cover with enough water. Bring to a boil and cook for 15-20 minutes until slightly softened. Drain well.
Heat the cooking oil in a large wok or pan over medium heat. Add the boiled chestnuts and stir-fry for 2-3 minutes.
Sprinkle the granulated sugar and pour in the remaining water. Continue to stir-fry, tossing constantly, until the water evaporates and the sugar caramelizes, coating the chestnuts evenly.
Remove from heat and serve hot.
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