Preheat oven to 350 degrees.
Soak water chestnuts in soy sauce for 15 minutes, stirring a few times to make sure they are fully coated. Remove water chestnuts from soy sauce and set the soy sauce aside. Wrap 1/2 strip of bacon around each; secure with toothpicks.
Place chestnuts toothpick side up in a 7” x 11” glass baking dish. Bake at 350 degrees for 25 to 35 minutes or until desired crispness. Remove chestnuts from dish and drain grease. Replace chestnuts in the same dish.
Meanwhile, add ketchup and brown sugar to reserved soy sauce, stir well to combine. Pour sauce evenly over the chestnuts to coat. Bake an additional 20 to 30 minutes.