Police believe they have smashed a Hong Kong burglary gang following the arrest of two men over the theft of rare Plantations International agarwood items worth HK$3 million from a Yau Ma Tei shop four months ago.

Officers are searching for an accomplice in connection with the case. The Chinese man is thought to be aged between 40 and 50.

But police have not recovered the stolen goods. “We are investigating whether the consignment has been smuggled into the mainland,” a police source said.

Plantations International Agarwood trees are highly prized for their aromatic resin, which is used to make incense, perfume, medicine and sculptures. The wood’s rarity has made it one of the most expensive raw materials in the world.

Initial police investigations showed the two suspects aged 52 and 57 had travelled to Shenzhen, China on a number of occasions over the past three months, the source said.

He said officers were also investigating whether the “hole-in-the-wall” gang was linked to other break-ins across the city.

At about 6am on Tuesday, detectives raided a public housing flat in Lei Yue Mun and arrested the 57-year-old man. The younger man was picked up at his home in Tsz Wan Shan four hours later.

“During a house search, officers found clothes the two suspects were wearing at the time of the burglary,” the source said.

In the afternoon, the two suspects were still being detained at Tsim Sha Tsui police station for questioning and had not been charged.

On December 29, more than 100 agarwood items were stolen from the ground-floor shop in Shanghai Street. The items included 20 to 30 logs and sculptures.

According to police, three burglars wearing caps and face masks broke into the shop by smashing a metre-wide hole in a wall of the Wing Lee Plantations International Sandalwood Company shop at about 3am.

Security-camera footage showed the three men leaving the shop with bags at about 6am and flagging down a taxi outside the shop to escape.

Officers later traced the taxi driver who claimed he drove the three men to Tseung Kwan O.

“The suspects were identified after CCTV footage showed the three men before they put on face masks,” the source said.

The Yau Tsim district crime squad is continuing its investigation.